“Uncomfortable Tech Drag” Vista Partners Daily Market Recap 5/20/19

By John Heerdink LinkedIn

The technology sector as it specifically relates to the US-China trade war dragged us down again today.  Headlines and actions out of large chipmakers like Intel to Qualcomm were flying as they were complying with the US’s new tech ban.  This ban is forcing them to proceed to cut off the supply of American components to Chinese technology giant Huawei’s mobile phones and networks as the trade wars escalate. Google has now added further weight as they began reportedly limiting software services that they provide to Huawei. Note that Huawei phones are preloaded with Google’s apps and more importantly Google’s software powers them. The fear in the markets is that this situation is at best a disruptive move that will hurt the involved companies collective bottom lines and that the markets will trade sideways or down for some time. Others fear that this has essentially set up a technological “Cold War” and an Iron Curtain of sorts between the US and China that is and will continue casting shadows and possibly creating tech-like storms across the world including Europe. What seems clear is that fear of the unknown and the associated uncertainty surrounding the current tech & trade war situation is making the markets quite uncomfortable and dragging it down.

As a result, the S&P 500 moved lower today ending the session down .67% at 2840.23. The Dow gave back 84.10 points and ended down .33% closing at 25,679.90 while the Nasdaq legged down 1.46% closing at 7702.35 and the Russell 2000 lost .7%.

With fear rising again today, so did the CBOE Volatility Index (VIX) which closed up 2.19% ending at $16.31 and traded between $15.46 – $17.63. The 2x leverage ETF TVIX also closed higher at $23.55 up 2.44% and traded between $22.81 and $24.97 today.

We also saw today that Canada and Mexico removed tariffs on US steel, aluminum, whiskey, &  beef which came after U.S. tariffs were lifted on their steel &  aluminum imports.

Oil prices pushed higher with the aid of US-Iran tensions & OPEC etc. playing their games letting us know that ongoing “production cuts” could be here for the balance of 2019. Oil rose .9% closing at $63.30/bb. Convenient timing for a rise as we get close to the Memorial Day/Summer travels in the US and need to fill our tanks for our family vacations, etc…  Chevron (CVX) moved higher .27% ending the day at $120.84. Exxon (XOM) closed slightly down at $75.90 down .01%.

Dow 30 components Caterpillar (CAT) continued its recent declining ways closing at $122.76 down .27% and pharmaceutical giant Merck & Co, Inc. (MRK) bumped up .20% closing at $78.88.

Intel (INTC) was down 12.96% closing at $44.89/share. Shares of Microsoft (MSFT) closed down by 1.44% closing at $126.22.  Apple (AAPL) dropped a solid 3.13% closing at $183.09/share. Uber Technologies (UBER), the ride-sharing company who priced its IPO at $45 per share last week and raised a whopping $8.1 billion lost again today down .76% as it closed at $41.59.

Disney (DIS) also was dragged down to $133.91 down .84% as it saw its megahit “Avengers Endgame” upended over the weekend by Lionsgate’s debut of “John Wick: Chapter 3 – Parabellum” a threequel led by Keanu Reeve.

One of the largest publicly traded hospital companies in the US and a leading operator of acute care hospitals in communities across the country, Community Health Systems, Inc (CYH) hit an intraday high of $3.29/share & a low of $3.115 today and closed the day at $3.28 up nicely 3.14% on 1.23 million shares of trading.  Chairman & CEO Wayne T. Smith bought more CYH stock recently bringing his total purchases to a number north of $3mm.  See SEC form 4 filing. More Insider Buying purchases came from CYH director Ely S. James as a  Form 4 today reveals a 50,000 CYH share purchase at $3.25/share on Friday, May 17th, 2019 and another 50,000 CYH share purchase at 3.15/share Monday, May 20th, 2019 for a total investment of $320,00.  It is worth noting that CYH Management is continuing to push forward with their strategy to delever their balance sheet & sell off underperforming hospitals assets in order to improve cash flow. They seem to be making progress in these efforts, although early, evidenced by their recently published financial and operating results for the three months ended March 31, 2019.

The Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions Atossa Genetics (ATOS) saw its shares move higher by .39% closing at $2.55 per share today. Last week Atossa offered the following Q1 2019 Corporate Developments & Q1 2019 Financial Results. See Complete Story. The Maxim’s Group’s biotech analyst, Jason McCarthy, Ph.D., reiterated his ATOS buy rating yesterday with a $9/share 12-Month Target Price. See his update report which is called “Reports the Quarter, Endoxifen Programs Progressing, Data Updates Expected Over 2019.”

San Diego-based biotech dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, Fate Therapeutics (NASDAQ: FATE) closed at $18.44 down 1.60% post hitting a recent new all-time intraday high of $20. The 52-week range is $8.64 – $20.

INVO Bioscience, Inc. (IVOB) ended the day up for the second straight day up 2.09%. IVOB is a medical device company, headquartered in Medford, Massachusetts, 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 enables egg fertilization and early embryo development in the woman’s vaginal cavity. IVOB reported progress yesterday after the markets close as it released its Q1 2019 numbers including revenues for Q1 2019 increasing by 82% and gave us a look into the progress expected in Q2 2019. Katie Karloff, Chair and Chief Executive Officer of INVO Bioscience, commented, “We expect 2019 to be a pivotal year in the history of INVO Bioscience.”

The US Dollar Index moved lower today by .1% closing at 97.95.

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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