The wait is over and now approximately 80% of the markets’ participants have received the .25 point interest rate cut that they were expecting (about 20% wanted a .50 pointcut), unfortunately, the Fed also lowered their ax and served a hawkish message. Fed Chair Jerome Powell stated, “Let me be clear. What I said was, it’s not the beginning of a long series of rate cuts.” The markets sold off immediately today as it had wanted him to confirm that more cuts were in the cards going forward. Powell added Powell the US economy is “healthy,” however confirmed that there are risks “weak global growth, trade policy uncertainty and muted inflation.” This was the first cut in ten years and since the financial crisis, we are seemingly not in crisis now so it seems as though it was a bit of an insurance card that was played today.
Again the markets did not seem to like the card he played as they sold off across the board. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index, lost much of its outsized gain from yesterday closing at 1,574.61 dropping 10.99 points. The large caps, however, suffered an even worse down day across the board as the S&P 500 gave back 32.80 points or 1.09% to end the session at 2,980.38. The Dow closed at 26,864.27 down 1.23% losing 333.75 points. The tech-heavy Nasdaq closed at 8,175.42, down 1.19% losing 98.19 points.
The U.S. Dollar Index jumped .6 today closing at 98.62.
Volatility bets were on the same page again today as they skyrocketed higher. The CBOE Volatility Index (VIX) closed higher at $16.12 up another 15.64% or $2.18/share. The 2x leveraged ETF TVIX also closed significantly higher at $15.13 up 10.44% or $1.43/share and traded widely between $13.19 and $16.03 today.
The 2-yr treasury yield closed at 1.88% up .03%, and the 10-yr treasury yield climbed to 2.02% down .04%.
Oil prices added .6% move higher closing at $58.38/bbl. Dow 30 energy participants Chevron (CVX) moved lower by .99% closing at $123.11/share & Exxon (XOM) closed lower by 1.31% closing at $74.36/share. Occidental Petroleum (OXY) closed at $51.36/share dropping 2.12%.
Gold closed at $1428.64/oz. Silver closed at $16.29/oz. Hecla Mining Company (HL) closed at $1.85 down 5.13% and is due to report earnings before the market opens on Aug. 7th. First Majestic Silver (AG) closed at $9.42/share down 6.36%.
Big tech stocks results were mostly down today except for Apple (AAPL) which closed at $213.04 up 2.04% after yesterday’s expectations beat and future positive guidance & Twitter (TWTR) which closed at $42.31/share up 3.20%. Facebook (FB) closed lower at $194.23/share down 1.43%, Alphabet (GOOG) closing at $1216.68/share down .69% today. Shares of Microsoft (MSFT) closed trading at $136.27/share down 2.91%. Micron (MU) dropped 5.42% closing at $44.89/share & Intel (INTC) closed at $50.55/share off 2.22%.
Netflix (NFLX) moved lower down .90% ending at $322.99/share. NYC-based Yext (YEXT), an innovator in search giving customers control over their business information across the digital landscape, closed at $20.81/share down 2.53%. Yext has seen a 52-wk trading range of $12.90 – $27.19. 3M. (MMM) beat earnings expectations last Thursday and closed at $174.72/share losing 1.64%.
It was mostly a down day for the large financial-related stocks. Goldman Sachs (GS) closed at $220.13/share down .57%. JPMorgan Chase (JPM) closed at $116.00 up .35%. Wells Fargo (WFC) closed at $48.41/share down by .29%. Morgan Stanley (MS) closed at $44.56/share down .25%, & Bank of America (BAC) closed at $30.68/share down .68%. Visa (V) closed at $178.00/share down 1.94%.
Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $23.28/share down 2.51% or $.60/share closing off its newly minted 52-wk high of $25.49. The 52-wk range is $8.60 – $25.49. OZM sports a 4.19% cash dividend. OZM reports on Thursday, August 1st.
Los Angeles-based Colony Capital (CLNY) a leading global investment management firm with assets under management of $43 billion had a interesting last few days as it announced last Thursday that it had acquired Digital Bridge Holdings LLC (“Digital Bridge”) for $325 million as part of Colony’s strategic evolution into the leading owner and investment manager of assets, businesses, and investment management products in which the digital and real estate frontiers intersect. The Digital Bridge acquisition follows the May 2019 final closing of Digital Colony Partners, a $4.05 billion fund sponsored by Colony and Digital Bridge. Digital Colony Partners is dedicated to global opportunities in digital infrastructure and is the largest first-time institutional fund of this type. This transaction seems to be bringing the world-class team of Digital Bridge investment professionals and management of the Digital Bridge portfolio of high performing assets under the Colony franchise. This acquisition continues Colony’s strategy of building leading investment management platforms, adding a powerful focus on assets and businesses that benefit from the increasingly digital world, including communications infrastructure, quant-driven listed securities products, artificial intelligence, digital credit products, smart logistics industrial, private equity and emerging markets infrastructure and growth equity strategies. Digital Bridge manages nearly $20 billion of digital infrastructure globally, directly and through Digital Colony Partners, and pro forma for Digital Colony Partners’ pending Zayo Group Holdings, Inc. transaction. Combining this portfolio with Colony’s footprint, the merged firm will manage approximately $60 billion of assets. The Company believes this concentration on digital infrastructure and related, digitally-driven investment management businesses will be a highly compelling strategy to generate substantial and sustainable value for shareholders and is very complementary to recent initiatives in other growth areas such as emerging markets, energy, and listed securities, often with a “new economy” emphasis. The combination of the two companies also paves the way for Colony’s leadership succession plans, which will be implemented over approximately 18 to 24 months. Following a transition period, Marc C. Ganzi, a founder and Chief Executive Officer of Digital Bridge, and a Managing Partner and an Investment Committee Member at Digital Colony, will become the CEO of Colony, succeeding Thomas J. Barrack, Jr., who will return to the position of Executive Chairman. Mr. Ganzi will focus with Mr. Barrack and the Colony board and executive team to continue Colony’s strategic plan of selling non-core assets, reducing G&A, growing investment management, generating liquidity and de-risking, and maintaining REIT status and a dividend – the further details of which will be announced before year-end. Read Complete Story. CLNY shares closed at $5.65/share down .53% after hitting an intraday high of $5.73. CLNY pays a 7.68% cash dividend. The 52-wk range is $4.55 – $6.28. CLNY reports earnings on Friday, Aug. 9th.
Consumer Goods & Entertainment
It was an off day for most of the bigs in the consumer goods and entertainment sectors.
The Home Depot (HD) closed at $213.69/share off 1.69%.
The Walt Disney Company (DIS) closed trading down 1.32% at $143.01/share.
Nike (NKE) closed down 1.34% at $86.03/share. Nike recently missed analyst earnings estimates but maintained full-year guidance.
McDonald’s (MCD) closed at $210.72/share closing off .76%.
Walmart (WMT) closed at $110.38/share losing 1.50%.
The healthcare sector moved lower today. The S&P 500 healthcare sector closed at 1054.04 dropping .99%. UnitedHealth (UNH) closed lower down 2.32% closing at $249.01/share, Walgreens Boots Alliance (WBA) closed at $54.49/share down 1.64% & Cigna (CI) lost 1.35% closing at $169.92/share.
Johnson & Johnson (JNJ) recently reported earnings beating analyst expectations as they confirmed a +40% increase in Q2 net income year over year. JNJ shares closed at $130.22/share down 1.41% & continue to deal with the overhang of the opioid & mesothelioma related issues.
INVO Bioscience, Inc. (IVOB) ended the day at $.3499/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 $2.53/share down 3.07% after hitting an intraday high of $2.67/share and a low of $2.50/share and the 52-week trading range is $.78- $3.49/share. Corindus is due to report earnings before the open on Thursday, Aug. 8th.
The Ishares Nasdaq Biotechnology ETF (IBB) lost .66% closing at $105.66. 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) close a bit higher at $38.84/share up .13%. They recently announced Q2 earnings and beat analyst expectations while simultaneously sharing that they will be merging its generic drug business Upjohn with Mylan (MYL) and then will seek to spinoff off the new combination into a separate publicly-traded company. Pfizer also recently announced the 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 $82.99/share down .34% on the day as it recently received positive EU CHMP Opinion for ZERBAXA 3g Dose for the treatment of adults with hospital-acquired pneumonia (HAP), including ventilator-associated Pneumonia (VAP.)
Pieris Pharmaceuticals (PIRS) closed today’s trading at $5.50/share down 5.34% on 1.01 million shares of trading after hitting an intraday high of $5.89. Recently, the company received news that the European Respiratory Society (ERS) had accepted its PRS-060 regarding an early-stage study of asthma. PIRS will report on Thursday, Aug. 1.
Atossa Genetics (ATOS), a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $2.08/share up 2.46% today. The average daily trading volume is 446,112 shares per day. This week, Atossa announced that recently the online launch of company CEO Steven Quay’s Tedx UofW Talk, “How to Be Smart When You’re Dense: Preventing Breast Cancer by 2030.” The talk has been posted online at https://www.youtube.com/watch?v=hK4PlbYE_5M&list=PLsRNoUx8w3rNCo4uCVXiNDFZLiKrIOQ1J&index=5 and can also be accessed via the company’s website at www.atossagenetics.com. In the Tedx UofW talk, Steven Quay, M.D., Ph.D., Atossa’s Chief Executive Officer outlines the journey of Atossa Genetics in identifying improved ways to identify women at high risk of breast cancer, using mammography to identify dense breast tissue. Dr. Quay also details his experience with triumph, failure, and perseverance while trying to prevent one of the world’s most common diseases: breast cancer. He emphasizes the need for unshaken efforts to solve such complex problems and ways that he and his team are doing so in breast cancer research. Also, recently 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.”
San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, closed at $22.05/share down 1.96% on 631,638 shares of trading after recently establishing a new all-time intraday high of $22.82 last week! The 52-week range is $8.64 – $22.82. FATE announced that the Company will host a conference call and live audio webcast on Tuesday, August 6, 2019, at 5:00 p.m. ET to report its second-quarter 2019 financial results and provide a corporate update. In order to participate in the conference call, please dial 877-303-6235 (domestic) or 631-291-4837 (international) and refer to conference ID 3898842. Cantor Fitzgerald initiated coverage on FATE on July 22nd with an overweight rating. Oppenheimer initiated coverage on Friday, July 12th with an Outperform Rating. Guggenheim Securities initiated coverage on FATE recently with a “Buy Rating” and a $25/share price target. Mizuho initiated coverage with a price target of $27/share within the last 30 days.
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 $24.64/share up 1.11%. See complete story.
Xeris Pharmacueticals, Inc. (XERS) closed down 4.02% closing at $11.70/share. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations.
Elsewhere on the recent IPO front-most had a not-so-good day, Zoom Video Communications (ZM) moved higher by .02% closing at $95.51/share & Uber Technologies (UBER), the ride-sharing company closed lower by 1.06% at $42.14/share & still below its recent IPO price of $45. Plant-based burger maker Beyond Meat (BYND) closed higher at $196.51/share up .90% after establishing a new all-time high of $239.71/share last Friday. Their meat is made of four main ingredients: water, pea protein isolate, canola oil & refined coconut oil and is meant to taste like “meat” and this rise feels euphoric. Slack Technologies (WORK) which jumped into the public markets with their IPO recently flying up 48.5% from their offering price of $26/share & closed today at $33.42/share up 2.58%. 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.
Outside of the Fed’s interest rate and hawkish tone we received the ADP Employment Change report which confirmed an estimated 156,000 positions were added to private-sector payrolls in July. The second-quarter employment cost index showed an increase of .6% seasonally adjusted. Wages and salaries moved higher by .7% & benefit costs rose .5%. The July Chicago PMI was 44.4. The weekly MBA Mortgage Applications Index dropped 1.4%.
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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