“Drifting Into The Close” Vista Partners Daily Market Recap 7/19/19

By John Heerdink LinkedIn

After our “Red Wednesday” & “Green Thursday” this week (see the last 2 days of recaps), we seemed to drift and/or selloff across all markets into the close today. The Dow lost 68.77 points today closing down .25% closing at 27,154.20. The S&P 500  gave back 18.50 points or .62% closing at 2976.61. The tech-heavy Nasdaq closed at 8,146.49 down .74% while losing 60.75 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index also experienced a down day lowering 7.73 points while closing at 1,547.90 down .50%.

The somber close was triggered by corrective statements out of the St. Louis Fed President James Bullard where he confirmed that he favored a quarter-point interest rate cut at the July 31 FOMC meeting, not the half-point that some manner of the market had anticipated.

After yesterday’s shot of adrenaline from a few earnings reports that surprised and beat analyst expectations out fo the likes of Union Pacific (UNP), Philip Morris International (PM), IBM (IBM), Morgan Stanley (MS), Honeywell (HON), we got a another couple of beats from Microsoft (MSFT) which closed at $136.62 up .2% & American Express (AXP) which closed at $124.82 down -2.8%. The reaction though seemed to be a bit subdued.
Oil prices turned up by .9% closing at $55.66/bbl. The reports of the U.S. Navy shooting down one of Iran’s drones and the subsequent reports that Iran’s Revolutionary Guard had seized one or two UK-operated tanker(s) most likely led to the reversal of the six-day decline. Dow 30 energy participants Chevron (CVX) moved higher by .29% closing at $125.04 & Exxon (XOM) closed higher by .20% closing at $74.99.
Volatility bets were on the same page today as they moved moderately lower. The CBOE Volatility Index (VIX) closed significantly higher at $14.45 up by 6.80% or $.92/share. The 2x leveraged ETF TVIX also closed higher at $15.00 up 1.69% or $.25/share and traded tightly between $14.12 and $15.12 today.
The U.S. Dollar Index moved back up .4% closing at 97.15. The 2-yr treasury yield rose to 1.82% up .04%, and the 10-yr treasury yield climbed to 2.05% down .01%.  Gold closed lower at $1425.00/oz. Silver closed higher at $16.31/oz.

Financials/Money management

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $22.81/share down .83% or $.19/share closing off its recently minted 52-wk high of $25.49. The 52-wk range is $8.60 – $25.49. OZM sports a 4.30% cash dividend.

Los Angeles-based Colony Capital (CLNY) a leading global investment management firm with assets under management of $43 billion closed at $5.02 down .79% after hitting an intraday high of $5.18. CLNY pays an 8.59% cash dividend. The will report earnings on Friday, Aug. 9th before the market opens.

Healthcare

The healthcare sector moved lower today. The S&P 500 healthcare sector closed at 1061.01 down 1.06%. UnitedHealth (UNH) closed lower down 1.52% closing at $256.65, Walgreens Boots Alliance (WBA) closed at $54.44 off .69% & Cigna (CI) lost 1.84% closing at $173.69.

Johnson & Johnson (JNJ) reported earnings today beating analyst expectations as they confirmed a +40% increase in Q2 net income year over year. JNJ shares closed at $130.31 down 1.33% as they are still dealing with the overhang of the opioid & mesothelioma related issues they are deeply involved with currently.

INVO Bioscience, Inc. (IVOB) ended the day at $.3145/share on the trading of 316,746 shares as daily trading volume continues to rise in concert with their announcing progress after their exclusive U.S. partnership with Ferring Pharmaceuticals, a leader in the reproductive health industry was announced in Q1-2019. Ferring has committed to providing the necessary sales and marketing resources to more fully develop the market in the United States. There are countless couples not able to receive reproductive treatments today, and Ferring can be instrumental in addressing the unmet needs of this cohort. Ferring has the industry experience, relationships and the marketing capabilities to successfully embed the INVOcell in clinics throughout the country.  IVOB is a medical device company, headquartered in Sarasota, FL focused on creating simplified, lower-cost treatment options for patients diagnosed with infertility. The company’s lead product, the INVOcell, is a novel medical device used in infertility treatment that is FDA cleared and that enables egg fertilization and early embryo development in the woman’s vaginal cavity. IVOB also announced last week news of their recent appointment of Pressly Ahammed as the new Director of International Business Development and he will be responsible for the Company’s international distribution channels in Europe, Middle East, Africa & parts of Asia. Ahammed joined IVOB from Cooper Surgical where he held a similar position. See complete story.

Corindus Vascular Robotics, Inc. (NYSE American: CVRS), a leading developer of precision vascular robotics, announced recently that Albert Einstein Jewish Hospital (Hospital Israelita Albert Einstein) in São Paulo, Brazil has become the first hospital in the Southern Hemisphere to implement Corindus’ CorPath GRX System. Ranked as the best hospital in Latin America for 10 years in a row, Albert Einstein Jewish Hospital will continue to uphold its standing by leveraging the Company’s technology in its health system’s leading research facilities. The Company’s CorPath® platform is the first FDA-cleared medical device to bring robotic precision to percutaneous coronary and vascular procedures. CorPath GRX is the second generation robotic-assisted technology offering enhancements to the platform by adding important key upgrades that increase precision, improve workflow, and extend the capabilities and range of procedures that can be performed robotically. For additional information, visit www.corindus.com CVRS shares closed at $2.67/share and the 52-week trading range is $.78- $3.49/share. Corindus is due to report earnings in the August 6th time frame.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) gave back 1.47% closing at $104.88. This sector has been on a more than healthy run over the last 30 days but certainly pulled back today. The 52-wk range is $89.01 – $122.97.

Pfizer (PFE) closed lower at $42.77 down .67% after the recent announcement regarding their acquisition of Array BioPharma (ARRY) for ~$11.4 billion or $48/share in cash.  See complete story. The pharmaceutical giant and Dow component Merck & Co, Inc. (MRK) that recently announced the acquisition of Tilos Therapeutics for a consideration of up to $773 million closed at $81.39 down by 1.57%.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $2.04 down 2.86%. The average daily trading volume is 820,104 shares per day.  Atossa announced recently that is developing a new proprietary modified-release oral tablet form of its Endoxifen, which is the form of the drug that the company intends for future clinical studies and commercialization. This is the next generation of oral Endoxifen following the successful clinical studies of the capsule form of the company’s oral Endoxifen. A patent application covering the new table has also been filed with the U.S. Patent and Trademark Office. As part of the development of this new oral tablet, Atossa has commenced a Phase 1 study in Australia to ascertain the pharmacokinetics of the tablet. The study is randomized, double-blinded and placebo-controlled with both single and multiple-doses in 2 groups with a total of 24 healthy female volunteers who will be dosed for 14 days. Atossa’s oral Endoxifen capsule, which has been used in previous clinical studies, will serve as the comparator. The first group of the study has now been enrolled and dosed. Steven C. Quay, Ph.D., M.D., CEO, and president of Atossa, commented: “We are excited to take this next step in our oral Endoxifen product development. Based on the abundance of information from our previous clinical studies, we strongly believe in the potential efficacy of oral dosing and intend for this modified-release tablet to be the commercial form of our oral Endoxifen. The goal of the modified-release aspect of the drug is to create more even uptake of the drug which we believe may reduce side effects and improve efficacy. This new study builds on the success of our Phase 1 studies of the oral capsule and topical forms of our Endoxifen, our recent successful Phase 2 study of topical Endoxifen, which demonstrated significant efficacy in reducing breast density, and our single-patient compassionate use study of oral Endoxifen. Following the completion of this Phase 1 trial, we will continue to use this proprietary modified-release formulation for future clinical studies — including a Phase 2 trial that we have already indicated is in development — and ultimately regulatory approval. We look forward to completing the study in the next quarter.”

Biohaven Pharmaceutical Holding Company Ltd., (BHVN), a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting migraine and neurological diseases, including rare disorders, announced recently the pricing of an underwritten public offering of 6,976,745 of its common shares at a price of $43.00/share. The gross proceeds of the offering are expected to be $300 million.  Shares of BHVN closed at $44.10 today down 1.43% after hitting an intraday high of $45.18/share on 486,198 shares of trading. The 52-wk range $29.17 to $67.86. This week Biohaven announced that positive results from a Phase 3 pivotal clinical trial of rimegepant, Biohaven’s small molecule calcitonin gene-related peptide (CGRP) receptor antagonist, for the acute treatment of migraine, were published in the July 12, 2019 issue of the New England Journal of Medicine (NEJM). The data were reported to show that, compared to placebo, patients treated with a single dose of oral rimegepant 75mg experienced superior, rapid pain freedom and freedom from the most bothersome migraine-associated symptom. Approximately 40 million people in the U.S. suffer from migraine and there has been minimal improvement in the standard of care acute treatment of migraine since the 1990s. Rimegepant is an oral calcitonin gene-related peptide (CGRP) antagonist being developed for the acute and preventive treatment of migraines. See Complete Story.

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed at $21.37/share down 5.02% on 518,913 shares of trading after establishing a new all-time intraday high of $22.82 recently! The 52-week range is $8.64 – $22.82. Oppenheimer initiated coverage on Friday, July 12th with an Outperform Rating. Guggenheim Securities initiated coverage on FATE last week with a “Buy Rating” and a $25/share price target.  Mizuho initiated coverage with a price target of $27/share recently.

Xeris Pharmacueticals, Inc. (XERS) closed up 2.68% at $12.28. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations.

Economy

The preliminary University of Michigan Consumer Sentiment Index for July was 98.4 almost the same as June’s reading of 98.2.

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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