“To Be Or Not To Be…” Vista Partners Daily Market Recap 11/7/19

By John Heerdink LinkedIn

Thursday, November 7th the markets reacted positively to stories swirling that China’s Commerce Ministry stated that China had reached an agreement with the U.S. where both sides were going to phase out tariffs over time which got somewhat countered when other stories took off that there may be some disagreement amongst the White House on how this might proceed. Nevertheless, the day was a positive one overall for the markets. The S&P 500 ended today’s session +8.4 points or +.27% as it closed at 3,085.18. The energy sector led the way today moving up +1.6% while the utilities sector retreated -1.4%.  The Dow also moved up +182.24 points closing at 27,647.80 +.66%.  The tech-heavy Nasdaq Composite closed at 8,434.52 +.28% or +23.89 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index also moved up +4.45 points +.28% and it ended trading at 1,593.99 and in shouting distance of its 52-wk high of 1,618.37. The U.S. Dollar Index rose +.2% to end at 98.13.

Treasury yields ended down today.  The 2-yr Treasury yield closed at 1.67% & the 10-yr yield finished higher at 1.93%.

Oil prices reversed again and ended up +1.4% today closing at $57.11/bbl. Chevron (CVX) closed at $121.89/share jumping +1.66%, Exxon (XOM) closed at $73.01/share +2.13%. Chevron reported earnings late last week of $.75, beating estimates of $.681 per share. Exxon Mobil (XOM) reported earnings recently of $1.36, missing estimates of $1.564 per share.

Gold prices closed down at $1,469.40/oz. Silver closed at $17.09/oz +$.50/oz. Hecla Mining Company (HL) closed at $2.23/share +-5.91% after reporting its Q3 2019 earnings which highlighted their Adjusted EBITDA of $69.8 million, approximately 40% lower cash cost per silver ounce and all-in sustaining cost (“AISC”) per silver ounce, in each case net of by-product credits compared to the third quarter of 2018, free cash flow of $28.8 million generated and a tentative agreement for their Lucky Strike Mine. (See complete story). First Majestic Silver (AG) closed higher at $9.69/share -4.81% after report their Q3 2019 earnings where their CEO Keith Neumeyer highlighted that they added $21.4 M to their treasury during the quarter as a result of strong production from San Dimas and Santa Elana mines.

Volatility bets results were mixed today.  The CBOE Volatility Index (VIX) closed at $12.73/share +.87% or +$.11/share. The 2x leveraged ETF (TVIX)  closed at $8.53/share -2.18% or -$.19/share and traded between $8.34 and $8.66 today.

Economic Reports

  • Monday offered the Factory Orders report for September that went down by -.6%.
  • On Tuesday, the ISM Non-Manufacturing Index for October moved higher to 54.7%. The U.S trade deficit trimmed in September to $52.5B. The September Job Openings & Labor Turnover Survey confirmed that job openings went down to 7.024M.
  • On Wednesday, the Nonfarm business sector labor productivity report showed that it had gone down -.3% in Q3. Unit labor costs rose +3.6%. The weekly MBA Mortgage Applications Index report decreased by -.1% w/w.
  • On Thursday, the initial jobless claims report for the week ending November 2nd confirmed that claims have gone down by 8k to 211k, while continuing jobless claims for the week ending October 26 fell by 3k to 1.689M. The Consumer Credit report for September confirmed a rise of $9.5B and that August credit growth remains at $17.9B.

Big Movers

San Diego-based DexCom, Inc. (DXCM), which develops and markets continuous monitoring systems for use by people with diabetes and healthcare providers, reported their Q3 2019 earnings highlighted by revenues of $396.3M representing between 49% growth. Shares of DXCM jumped 27.16% closing at $194.70 with a market cap of $17.75B.

Healthcare

The S&P 500 healthcare sector closed at 1091.46 +14%. UnitedHealth Group (UNH) closed at $256.46/share +2.37% after a recent Q3 earnings beat on 10/15/19, Walgreens Boots Alliance (WBA) closed at $58.67/share -1.38%, Walgreens reported earnings on 10/28/2019 of $1.43/share, missing estimates calling for $1.451 per share, and is reportedly considering a take-private initiative with private equity firms. Cigna (CI) closed up +1.21% closing at $185.34/share.

Worldwide, the fertility treatment market is severely underserved. Currently, only 1% to 2% of the 150 million infertile couples worldwide are treated, with the primary prohibiting factor being cost and access to treatment. INVO Bioscience’s (IVOB) INVOcell system is a novel fertility treatment that uses a woman’s own body as a natural incubator for the incubation of eggs and sperm during fertilization and early embryo development. This cost-effective process has shown comparable pregnancy rates to IVF and in their opinion has the ability to significantly increase patient access. The INVOcell system can eliminate the need for costly infrastructure and overhead associated with IVF, one of the primary hindering factors to fertility treatment in many areas of the continent. Additionally, INVO Bioscience believes the unique in vivo fertilization process is a powerful motivator for many patients and in their opinion the only acceptable option available to some patients for religious and cultural reasons.

Today, INVO Bioscience, Inc. (IVOB), a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of INVOcell®, the world’s only in vivo Intravaginal Culture System (pictured above), today announced that it has entered into commercialization agreements in the continent of Africa, covering Nigeria, Uganda, Sudan, and Ethiopia, to distribute the revolutionary INVOcell system. The agreements represent INVO Bioscience’s initial entry into the highly populated infertility markets in Africa. According to research, approximately 31% of Nigerian couples fail to conceive a child after 12 months of unprotected sex—a rate at least as high as in the West. Across the continent, infertility is on the rise. Infertility comes with devastating social, cultural, emotional and economic consequences for young couples in Africa. However, access to assisted reproductive services remains a big challenge as traditional IVF treatment is limited in many areas of Africa. (READ complete story)

The African commercialization agreements seem to further support INVO Bioscience’s planned worldwide expansion of INVOcell and follow the recent agreement with Ferring Pharmaceuticals to distribute INVOcell in the United States.INVO Bioscience has entered into distribution agreements with G-Systems covering Nigeria, and Quality Medicine covering Uganda, Sudan, and Ethiopia. Following standard administrative requirements by each company to begin supplying INVOcell in the country, the Company believes distribution will commence in 2020. Each agreement includes minimum annual purchase requirements. Full terms of the agreement were not disclosed.

To learn more about INVO Bioscience (IVOB) and to track its progress daily, please visit the INVO Bioscience Dedicated Research Page by clicking here.

IVOB closed trading at $.31/share. The 52-wk range is $.25 – $.63.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved +.04% closing at $108.35 & the NYSE Arca Biotech Index (^BTK) closed at 4,460.96 -.09%.

Johnson & Johnson (JNJ) closed at $131.43/share +.36%, Merck & Co (MRK) closed at $82.88/share -.44%, Pfizer (PFE) closed at $36.91/share -.91%. Merck (MRK) reported earnings on 10/29/2019 of $1.51, beating estimates of $1.28 per share. Pfizer (PFE) reported earnings on 10/29/2019 of $.75, beating estimates of $.644 per share.

Atossa Genetics (ATOS) closed trading at $1.59/share. Recently, Atossa and The Dr. Susan Love Research Foundation announced that the Institutional Review Board (IRB) has approved a Phase 2 clinical study of Atossa’s intraductal microcatheter technology for the administration of fulvestrant in patients with early-stage breast cancer or ductal carcinoma in situ (DCIS). Susan Love, M.D., inventor of the technology, will advise Atossa as it conducts the trial. Atossa also entered into a clinical trial agreement with a major research university named in the 8k filing that Atossa filed on 10-14-2019 to conduct their Phase 2 clinical study of Atossa’s intraductal microcatheter technology for the administration of fulvestrant in patients with early-stage breast cancer or ductal carcinoma in situ (DCIS). Atossa Genetics is the owner of issued patents, pending patent applications, and medical device FDA 510(k) premarket notifications related to the treatment of breast conditions, including breast cancer and DCIS.

“We have contracted with a world-class teaching, research, and healthcare organization based in the United States to conduct this study,” commented Steven C. Quay, Ph.D., M.D., CEO and President of Atossa. “Atossa’s intraductal technology was invented by Dr. Love and subsequently acquired by Atossa. We are honored that Dr. Love has agreed to work with us on this important new study. This work begins as Atossa increases its corporate focus on its proprietary Endoxifen for the reduction of mammographic breast density.” READ the complete story here.

Tech & Entertainment

Apple (AAPL) closed at $259.43/share +1.15% as optimism continues to grow with regard to the new iPhone models and new streaming entertainment offering, Alphabet (GOOG) closed at $1308.86/share +1.32%, Facebook (FB) closed at $190.42/share -.59%, Microsoft (MSFT) closed at $144.26/share +.14%, NVIDIA (NVDA) closed at $208.34/share +.34%. Bank of America/Merrill Lynch recently raised its NVDA price target to $250 from $225. IBM closed at $137.69/share +.39% as it recently missed wall street Q3 expectations while Cisco Systems (CSCO) gained +.31% finishing at $48.42/share. Goldman Sachs (GS) ($223.29/share +2.23%) recently downgraded CSCO as it views that corporate spending on technology has weakened.

Disney (DIS) closed at $132.96/share +1.29% as it recently announced that it was teaming with Verizon (VZ) ($60.53/share, +.67%) and its new streaming service Disney+ will now be given to all new customers of Verizon for a year, and Netflix (NFLX) closed at $289.57/share +.34%. Amazon (AMZN) closed at $1,788.20/share -.42%. Disney (DIS) after the market closed reported earnings for its fourth quarter and fiscal year ended September 28, 2019. Diluted earnings per share (EPS) from continuing operations for the fourth quarter decreased by 72% to $0.43 from $1.55 in the prior-year quarter. Excluding certain items affecting comparability(1), diluted EPS for the quarter decreased by 28% to $1.07 from $1.48 in the prior-year quarter. Diluted EPS from continuing operations for the year decreased by 25% to $6.27 from $8.36 in the prior year. Excluding certain items affecting comparability(1), diluted EPS from continuing operations for the year decreased by 19% to $5.77 from $7.08 in the prior year. DIS shares are trading 139.83 +5.17%.

Streaming device maker Roku (ROKU) closed at $118.46/share -.16.02% today after they recently reported earnings beating both top and bottom Wall Street expectations but also reducing its profitability outlook for 2019 as a whole. adjusting it from $30M from $35M reflecting continued investing in the business and Q4 dataxu operations and acquisition expenses.

Boeing (BA) closed at $357.31/share +1.47% after their CEO’s recent testimony to the Senate.

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