COVID-19 Growth & Treatment Updates, Oil Volatility, Stimulus Grip The Markets This Week

This week, we saw the number of worldwide coronavirus cases grow to more than 2.7 million while the number of worldwide deaths jumped to 191,000. The number of people that have recovered from coronavirus is up to 760,000. In the US, we now have over 905,000 cases up from 680,000 last Friday and 51,209 (jumping from 30k last week) US citizens have now past away due to COVID-19. However, we are seeing signs that containment measures and social distancing are assisting in slowing the growth. In response, we are seeing moves to reopen local economies in some parts of the world and the US. i.e. Georgia, South Carolina, Tennessee, and Texas who began opening the doors to a few more businesses this week. Another somewhat positive sign is that we saw a decline by 810k to 4.427M in job claims for the week ending April 18 but continuing claims for the week ending April 11 rose to a record to 15.976M. Even so, the world and the US economy have been brought essentially to a halt. In the US, the House also approved another $484B measure which offers more funds for the Paycheck Protection Program adding $320B to revive the program, which offers loans to small businesses, after the first round was exhausted last week. There will probably be another round of stimulus on its way as this 2nd round will get exhausted in short order & the balance of the country is still sitting on the sidelines with no clear path to getting back to work as no treatments or vaccines have been produced to address all affected.

TREATMENT UPDATES

On the world’s mission to discover effective treatments or prevention of COVID-19, we now have seen a number of companies advancing their work, but not without a couple of negative reports surfacing too. A negative report on hydroxychloroquine surfaced from China and another where the WHO accidentally posted a summary of study results finding that a leading experimental coronavirus treatment, Gilead’s (GILD) remdesiv, did not help a group of COVID-19 patients with severe cases. Hopefully, further help is on the way, as many companies are either in the clinic or moving into the clinic as the FDA is expediting the process in order to find a remedy in relatively short order. One of those companies, Atossa Therapeutics (ATOS), which hit intraday high of $3.11/share (up from a recent low of $.76/share) recently prior to closing at $2.18 on Friday, after it announced a new drug development program called COVID-19 HOPE. (HOPE is an acronym for AT-H201in COVID-19 patients for Pulmonary Evaluation.) The program uses a novel combination of two drugs that have been previously approved by the FDA for other diseases. The intended primary function of the drug combination AT-H201 is to essentially mimic the function of the antibodies formed from a vaccine by blocking the ability of the virus to enter the target cells; a vaccine that may not be available for more than a year. Atossa has filed comprehensive provisional patent applications related to AT-H201 and intends to apply to the FDA under its Coronavirus Treatment Acceleration Program for approval to commence a clinical study. You can learn more by watching a KIRO-7 News interview of Atossa’s CEO Steven Quay M.D. Ph.D. Watch It Now! Finger crossed that they will get the green light soon to move into the clinic as early as next week.

On Friday, shares of Mesoblast Limited (Nasdaq: MESO; ASX: MSB) skyrocketed +139.53% closing at $15.45/share ($1.59B) as they announced 83% survival in ventilator-dependent COVID-19 patients (10/12) with moderate/severe acute respiratory distress syndrome (ARDS) treated during the period March-April 2020 with two intravenous infusions of Mesoblast’s allogeneic mesenchymal stem cell product candidate remestemcel-L within the first five days. 75% (9/12) have successfully come off ventilator support at a median of 10 days. At this time, seven have been discharged from the hospital. Patients received a variety of experimental agents prior to remestemcel-L. All patients were treated under an emergency Investigational New Drug (IND) application or expanded access protocol at New York City’s Mt Sinai hospital. In contrast, only 9% (38/445) of ventilator-dependent COVID-19 patients at a major referral hospital network in New York City were able to come off ventilator support when treated with standard of care during March/April 2020. Moreover, there was 88% mortality with only 12% survival (38/320) among ventilator-dependent COVID-19 patients at a second major referral hospital network in New York City during the same period.2 These poor outcomes are consistent with earlier published data from China where mortality rates of over 80% were reported in patients with COVID-19 and moderate/severe ARDS.

VACCINES

Johnson & Johnson (JNJ) & Moderna (MRNA) & a few others continue to press forward with vaccines that reportedly could be brought to the market in 2021.

MARKETS

With all of this in mind, the coronavirus’ grip on the markets this week was fairly tight across the board as we ended relatively flat and the sharp 10% swings in the market were absent. 

• The Dow ended the week at 23,775.27 representing a weekly decline of -1.9% and is now down -16.7% YTD
• The S&P 500 closed at 2836.74 for a weekly loss of -1.3% and is now down -12.2%
• The Nasdaq Composite closed at 8,634.52 on Friday, representing a weekly -.2% downward move and is now down -3.8% YTD
• The Russell 2000 closed at 1,233.05 representing a weekly +.3% increase and is now down a -26.1% YTD. The smalls are trailing but it was good to see an upward swing this week.

The FAANG’s results ended the week up across the board.  Facebook (FB) closed at $190.07/share, +2.67% Friday, ($179.24/share a week ago), Amazon (AMZN) closed at $2,410.22/share, +.45% Friday, ($2,375/share a week ago), Apple, Inc. (AAPL) closed at $282.97/share, +2.89% Friday, ($282.80/share a week ago), Netflix (NFLX) closed at $424.99/share, -.40% Friday, ($422.96/share a week ago) & Alphabet (GOOG) closed at $1,279.31/share, +.24%, ($1,283.25/share a week ago.)

COMMODITIES

Oil prices were all over the place this week & even went negative early on due to technical selling pressure with regard to contract expirations, but ended popping back this week to end at $17.03/bbl which is still down from last week’s close of $18.20/bbl. Global growth concerns and the lack of need for many of us at the pump resulting supply glut continues to plague prices. In contrast, the energy sector closed in positive territory this week up +1.7%. Chevron (CVX) & Exxon (XOM) moved very little this week to close respectively at $87.01/share ($87.17, last wk) and $43.73/share ($43.22, last wk.).

Gold prices closed at $1,735/0z. up nicely from $1,695/oz & silver prices closed basically flat at $15.27/oz down marginally from $15.30/oz last Friday. 

DOLLAR & YIELD

The U.S. Dollar Index strengthened to end the week at 100.24 up from 99.5 last week.  US Treasury yields were mixed week over week. The 2-yr Treasury yield closed at the same mark at .2o%, the 10-yr yield closed at .6o% down from .65%, & the 30-yr yield ended at 1.177% down from 1.265%.  

ECONOMIC REPORTS

Here’s a summary of this week’s economic reports: On Monday, we did receive any significant economic reports. On Tuesday, we received the existing home sales report which confirmed a drop by -8.5% month/month in March while total sales increased by +.8% year-over-year. On Wednesday, a couple of economic reports surfaced today. The FHFA Housing Price Index for April confirmed a move higher by +.7% & the weekly MBA Mortgage Applications Index confirmed a drop by -.3%. On Thursday, we received the initial claims report for the week ending April 18 which confirmed a decline by 810k to 4.427M, while continuing claims for the week ending April 11 rose a record to 15.976M. We also learned that new home sales declined by  15.4% month/month in March and on a year/year basis it was down by 9.5% On Friday, we received the durable goods orders report which confirmed a drop by -14.4% month/month in March while durable goods orders, excluding transportation, showed a drop by -.2%. The final reading for the University of Michigan Index of Consumer Sentiment for March was 89.1.

NEXT WEEK

The Fed is due to reduce its Treasury purchases to $10B/day next week from $15B/day. Hopefully, this will not be too disorderly as they back off.

We are due to receive the following significant economic data next week:

• The earnings season continues this week with about one-third of the companies in the S&P 500 reporting Q1 results
• The Q1 GDP estimate and the Federal Reserve rate announcement on Wednesday
• The manufacturing Purchasing Managers’ Index (PMI) on Friday

STOCKS IN VIEW

•  Atossa Therapeutics’ (ATOS) founder, Chairman, and CEO, Steven Quay, M.D., PhD., was recently interviewed by Fox News before the market opened regarding his COVID-19 Hope Trial where he is seeking to study the use of two approved drugs to rapidly find a viable coronavirus treatment. Here’s the link to the interview in case you missed it: https://video.foxnews.com/v/6147410883001#sp=show-clips. On Thursday this week, ATOS announced a new drug development program called COVID-19 HOPE. HOPE is an acronym for AT-H201in COVID-19 patients for Pulmonary Evaluation. Learn more here. 

• Shares of plant-based meat company Beyond Meat, Inc. (BYND) flew higher this week and again today up by +9.02% and closed at $108.78/share after recent reports confirming that they were moving into China with the aid of Starbucks (SBUX).

• Shares of INVO Bioscience (INVO) closed higher again today up another .25%. This week was National Infertility Awareness week and Vios Fertility Institute of Chicago showcased INVO Bioscience’s INVOCELL, a cost-effective infertility treatment that uses the woman’s body to naturally incubate the eggs, sperm & early embryo development in their interview on WTMJ-TV Milwaukee’s show The Morning Blend that you may watch here. INVO recently announced its financial results for the year ended December 31, 2019, which was highlighted by a 199% increase in their topline revenues in 2019. Learn more

• Shares of Neubase Therapeutics (NASDAQ: NBSE) closed this week at $8.17/share up +5.17% after hitting a new all-time high of $8.64/share this week. Investment banks BTIG, HCW, Oppenheimer & Guggenheim maintain analyst coverage with BUY ratings on NBSE that include a price target that ranges in a $13-$15/share target price range. NBSE recently announced positive preclinical data from its pharmacokinetics studies in non-human primates (“NHPs”) and in vitro pharmacodynamics data in patient-derived cell lines. NeuBase believes these data validate the key advantages of the proprietary NeuBase peptide-nucleic acid (“PNA”) antisense oligonucleotide (PATrOL™) platform and support the Company’s decision to advance the development of its Huntington’s disease (“HD”) and myotonic dystrophy type 1 (“DM1”) programs, as well as the potential expansion of its therapeutic pipeline into other indications. Dr. George Church, professor of genetics at Harvard Medical School and member of the National Academy of Sciences, stated, “Given the activity and broad biodistribution observed in these studies and the potential for easier target definition, I believe the PATrOL™ technology may have a potent impact on the future of drug development and treatment of genetic diseases.” 

In the meantime, I believe that we will continue to see volatility in the markets that will continue to produce opportunities, but with the recent widespread move one will have to be a bit more selective again. The markets are indeed rebounded significantly and the 10% swings have subsided and understanding around the coronavirus situation seems to be trending in a positive way. We are also due to receive the following significant economic data reports next week:

Please enjoy the weekend at home with the family, appreciate what you have, stay flexible in the markets to strike when the opportunity appears attractive, and plan and dream of what life may bring all of us in we can move forward safely through this period together.

Please also enjoy the balance of the weekly newsletter’s videos, quotes, updates, and keep up the great work in helping our nation and world recover from the coronavirus epidemic.

Economic Reports

• On Monday, we did receive any significant economic reports.
• On Tuesday, we received the existing home sales report which confirmed a drop by -8.5% month/month in March while total sales increased by +.8% year-over-year.
• On Wednesday, a couple of economic reports surfaced today. The FHFA Housing Price Index for April confirmed a move higher by +.7% & the weekly MBA Mortgage Applications Index confirmed a drop by -.3%.
• On Thursday, we received the initial claims report for the week ending April 18 which confirmed a decline by 810k to 4.427M, while continuing claims for the week ending April 11 rose a record to 15.976M. We also learned that new home sales declined by  15.4% month/month in March and on a year/year basis it was down by 9.5%
• On Friday, we received the durable goods orders report which confirmed a drop by -14.4% month/month in March while durable goods orders, excluding transportation, showed a drop by -.2%. The final reading for the University of Michigan Index of Consumer Sentiment for March was 89.1.

Investing & Inspiration

“An investment in knowledge pays the best interest.” – Benjamin Franklin.

“I believe the returns on investment in the poor are just as exciting as successes achieved in the business arena, and they are even more meaningful!” -Bill Gates

“Every portfolio benefits from bonds; they provide a cushion when the stock market hits a rough patch. But avoiding stocks completely could mean your investment won’t grow any faster than the rate of inflation.” – Suze Orman

“The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital… the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.” – John F. Kennedy

“If all the economists were laid end to end, they’d never reach a conclusion.
-George Bernard Shaw

“The riskiest thing we can do is just maintain the status quo. I get up at 4:30 in the morning, seven days a week, no matter where I am in the world. I think it is important for people who are given leadership roles to assume that role immediately. What I’ve really learned over time is that optimism is a very, very important part of leadership.” – Bob Iger, Former Ceo of Disney

“In the short run, the market is a voting machine. But in the long run, it is a weighing machine.” – Ben Graham

“In investing, what is comfortable is rarely profitable.” -Robert Arnott

“The fundamental law of investing is the uncertainty of the future.” -Peter Bernstein

“How many millionaires do you know who have become wealthy by investing in savings accounts?” -Robert G Allen

“Greed is all right, by the way. I think greed is healthy. You can be greedy and still feel good about yourself.”-Ivan Boesky

“Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” -Bruce Kovner

“The policy of being too cautious is the greatest risk of all.” -Jawaharlal Nehru

“I talk about macro themes a lot because they are fun to talk about, but it is the risk management that is the most important thing. The risk control is all bottom-up. I structured the business right from the get-go so that we would have lots of diversification.” -Michael Platt

“Blaming speculators as a response to financial crisis goes back at least to the Greeks. It’s almost always the wrong response.” -Larry Summers

Tomorrow

We are due to receive the following significant economic data next week:

• The earnings season continues this week with about one-third of the companies in the S&P 500 reporting Q1 results
• The Q1 GDP estimate and the Federal Reserve rate announcement on Wednesday
• The manufacturing Purchasing Managers’ Index (PMI) on Friday