“Little Russell Tags In” Vista Partners Daily Market Recap 7/16/19

By John Heerdink LinkedIn

The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index tagged in today & gained a weak .17 points closing at 1,562.00 up .01% but did manage to outperform the remaining indices even though there were a number of earnings beats in large cap land. The Dow gave back 23.53 points today closing down .09% closing at 27,335.63 after hitting a new-all-time high of 27,298.68 in traday trading. The S&P 500 lost 10.26 points or .34% closing at 3004.04. The tech-heavy Nasdaq closed at 8,222.80 down .43% losing 35.39 points.

The markets somewhat lackluster perfomance today seemed to be as a result of the conflict between the bullish belief that the Fed will be reducing interest rates by a quarter point on July 31st, the earnings season that is revving up but brings with it the overwhelming bias that this will not be a good quarter because of tariffs & the rising US dollar (Goldman Sachs forecasts a 2% y-o-y decline in aggregate S&P 500 EPS this quarter), & President Trump casting doubt on the China Trade War situation stating today that it still had “long way to go.”

Volatility bets were on the same page as they moved higher but the trading range remained relatively tight. The CBOE Volatility Index (VIX) closed lower at $12.86 up by 1.42% or $.18/share. It traded between $12.28 – $13.14. The 2x leveraged ETF TVIX also closed higher at $14.45 up .42% or $.06/share and traded between $13.86 and $14.59 today.

The US Dollar Index rose again today ending at 97.38 up .05%.

The 2-yr treasury yield ended at 1.86% up .03%  & the 10-year Treasury note closed equally up .03% at 2.12%.

 Oil prices continued yesterday’s decline falling another 3.2% to close at $57.61 /bbl.  Dow 30 energy participants Chevron (CVX) moved lower by .76% closing at $124.76 & Exxon (XOM) closed lower by 1.49% closing at $75.93.

Gold closed lower at $1406.20/oz.

Tech

Big tech stocks results were mostly up today.  Apple (AAPL) was down .35% closing at $204.50/share & Amazon (AMZN) lost .55% closing at 2,009.90. Alphabet (GOOG) clipped forward .28% closing at $1,153.08  & Facebook (FB) dipped into the close at $203.84 off .03%. Shares of Microsoft (MSFT) closed trading at $137.90 down 1.31%. Chipmaker Intel (INTC) moved sharply lower off 1.90% closing at $49.17/share & Micron (MU) lost a whopping 3.02% closing at $43.06/share. Netflix (NFLX) notched lower .17% ending at $365.99/share. NYC-based Yext (YEXT), an innovator in search giving customers control over their business information across the digital landscape, closed at $20.55/share down 2.51% & has a 52-wk trading range of $12.90 – $27.19.

Financials/Money management

Goldman Sachs (GS), JPMorgan Chase (JPM) & Wells Fargo (WFC) all reported earnings today and beat ananlyst expectations. We will recieve earings reports from Morgan Stanley (MS) and Bank of America (BAC) tomorrow.

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $22.90/share down 1.63% or $.38/share closing off its newly 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 $5.10 up .58% after hitting an intraday high of $5.15. CLNY pays an 8.58% cash dividend.

Consumer Goods & Entertainment

The Home Depot (HD) closed ar $217.26/share losing .66%.

The Walt Disney Company (DIS) closed trading off .52% at $144.30/share.

Nike (NKE) closed at $88.60 off .98%. Nike recently missed analyst earnings estimates but maintained full-year guidance.

Walmart (WMT) closed at $114.76 down .19%.

Healthcare

The healthcare sector moved lower today. The S&P 500 healthcare sector closed at 1066.40 down .50%. UnitedHealth (UNH) closed lower down .49% closing at $264.66, Walgreens Boots Alliance (WBA) closed at $55.81 off slighty .14% & Cigna (CI) jumped 1.66% closing at $179.96.

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 $132.50 down 1.64% as they are still dealing with the overhang of the opioid & mesothelioma related issues they are deeply involoved with currently.

INVO Bioscience, Inc. (IVOB) ended the day at $.3679/share 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 $2.62/share and the 52-week trading range is $.78- $3.49/share. Corindus is due to repeort earnings in the August 6th time frame.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) gave back .58% closing at $105.47. This sector has been on a more than healthy run over the last 30 days. The 52-wk range is $89.01 – $122.97.

Pfizer (PFE) closed higher at $42.85 up .23% 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 $81.59 up by .78%.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $2.07 down 2.36%. The average daily trading volume is 833,153 shares per day.  yesterday’s positive move came on the back of news that Atossa 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 $45.30 today down .92% after hitting an intraday high of $46.30/share on 966,395 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 up at $22.46/share up 1.45% on 660,267 shares of trading after establishing a new all-time intraday high of $22.75! The 52-week range is $8.64 – $22.75. 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.

Bedford, Massachusetts-based Stoke Therapeutics is a biotechnology company pioneering a new way to treat the underlying cause of severe genetic diseases by precisely upregulating protein expression. Recently Stoke Therapeutics announced the pricing of its initial public offering (IPO) of 7,891,110 shares of its common stock at a price to the public of $18.00 per share. The shares are now trading on The Nasdaq Global Select Market as of June 19, 20,19 under the symbol “STOK.” Stoke’s stock traded as high as $31.76 recently a new all-time high prior to closing trading at $26.38/shareup .61% today. See complete story.  

Xeris Pharmacueticals, Inc. (XERS) closed up 3.17% at $12.35. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations.

IPO

Elsewhere on the recent IPO front, Zoom Video Communications (ZM) moved lower by 2.71% closing at $97.10 & Uber Technologies (UBER), the ride-sharing company closed lower by .90% at $44.13/share & still below its recent IPO price of $45. Plant-based burger maker Beyond Meat (BYND) closed sharply higher at $172.59 up 3.64%. Their meat is made of four main ingredients: water, pea protein isolate, canola oil & refined coconut oil and is meant to taste like “meat.  Slack Technologies (WORK) which jumped into the public markets with their IPO last week flying up 48.5% from their offering price of $26/share & closed today at $34.40 down 1.01%. Slack is a provider of a cloud-based workplace messaging app and went public via a direct listing avoiding paying fees to the relevant banks.

Economy

We recieved the following data points today:

  • Total retail sales were up 0.4% month-over-month in June.
  • Retail sales, excluding autos, were aup 0.4%
  • Core retail sales, excluding motor vehicle, gasoline station, building materials, & food services & drinking places sales, jumped 0.7% month-over-month.
  • Import prices declined 0.9% month-over-month.
  • Export prices declined by 0.7% month-over-month.
  • Industrial production was unchanged in June.
  • The total industry capacity utilization rate fell to 77.9%.
  • Business inventories increased by 0.3% in May
  • Business sales increased by 0.2%.
  • The NAHB Housing Market Index for July came in at 65 up form 64 in June.

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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