It Was An Election Inspired Reversal Producing Significant Market Gains!

It was a week in the markets that many investors enjoyed as we experienced a daily rises until Friday where the exuberance finally tempered. The markets in fact substantially reversed from the ~10% correction that we had experienced in the previous two weeks to a gain ranging from 6.9% – 9% across all major indices this week. 

Overall stimulus hopes came back into the minds of investors as a balanced Senate and House situation seemed to be in play post election day which typically somewhat defuses the power of  any president no matter his affiliation.  The Fed also played ball supporting market growth as it released its FOMC policy statement leaving the fed funds rate unchanged while committing to the current pace of asset purchases.

On the macroeconomic side of the coin the schedule produced a mix of mostly positive reports as follows: On Monday, we received the ISM Manufacturing Index for October which came in at 59.3% surprisingly well above the expansion level. The total construction spending report also confirmed a move higher by .3% month/month in September while total private construction spending also jumped .9% month/month but total public construction spending decrease by 1.7%. On Tuesday, the factory orders report for manufactured goods which confirmed a rise by 1.1% month/month in September, a rise for the fifth consecutive month. On Wednesday, The ISM Non-Manufacturing Index report for October which came in at 56.6% again well above the expansion line. The trade deficit report for September came in at $63.9B as export growth was $4.4B & import growth was $1.2B. The weekly MBA Mortgage Applications Index dropped 3.8%. The ADP Employment Change report for October estimated that 365k jobs were added. On Thursday, the initial jobless claims report confirmed a drop by 7k for the week ending October 31 to 751k while the continuing claims report for the week ending October 24 confirmed a drop by 538k to 7.285M. Productivity in Q3 also rose at a seasonally adjusted annual rate of 4.9% while unit labor costs dropped by 8.9%. On Friday, the Nonfarm payrolls report confirmed a rise by 638k in October while the unemployment rate came in at 6.9% & average hourly earnings rose by .1%. The consumer credit report confirmed a rise by $16.2B in September. Wholesale inventories report confirmed a rise by .4% month/month in September.

MARKET RESULTS

All 11 sectors finished significantly in the green this week with the information technology sector leading the way ending up 9.7% (it was down 6.5% last week) while the energy sector brought up the tail end with only a .8% rise even though oil prices rose 4.% to end at $37.14/bbl.

The tech-heavy Nasdaq Composite jumped 9% week-over-week to lead the week and closed at 11,895.23 using it back up an impressive 32.6% YTD.

The highly weighted FAANG’s ended significantly higher this week as follows: Facebook (FB) closed at $293.43/share, +.01% Friday ($263.11/share a week ago), Apple (AAPL) closed up .13% on Friday at $118.53/share and up from $108.86/share a week ago. Amazon (AMZN) closed at $3,310.25/share, -5.45% Friday ($3,036.15/share a week ago), Netflix (NFLX) closed at $514.83/share, +.02% Friday, ($475.74/share a week ago), & Alphabet (GOOG) closed at $1,761.63/share, -.01% Friday, ($1,621.01/share a week ago.) 

The Dow ended the week at 28,323.40 up 6.9% but remains down .8% YTD. Around the Dow 30, Johnson & Johnson (JNJ) closed at $142.25/share up from last week’s close of $137.11. Shares of Coca-Cola (KO) closed at $49.45/share slightly lower from last Friday’s close of $50.52/share. Shares of Disney (DIS) closed at $127.46/share up again from last Friday’s close of $128.35/share. Shares of Nike (NKE) closed at $128.90/share down from $129.99/share last Friday. Intel (INTC) closed at $45.39 up from the $44.28 close last Friday.

Shares of Deere (DE) closed at $247.64/share up from last week’s close of $225.91/share. Pharmaceutical giant Merck (MRK) closed at $80.36/share closed up from last Friday’s close of $75.21/share, energy giant Chevron (CVX) closed at $71.15 up from last Friday’s close of $69.50/share, Caterpillar (CAT) closed at $161.29/share up from last Friday’s close of $157.05/share. Walmart (WMT) closed at $145.77/share up from last Friday’s close of $138.75/share. Shares of Microsoft (MSFT) closed at $223.72/share up from last Friday’s close of $202.47/share, Salesforce (CRM) closed at $269.15 up from $232.27 last Friday and will report Q3 results on Tuesday , Dec. 1 after the close. Boeing (BA) closed $157.74 up from last Friday’s close of $143.39/share.

Around the financial sector horn we saw the shares of Goldman Sachs (GS) close trading at $201.26/share down again from last Friday’s close of $205.04/share, American Express (AXP) closed at $96.69/share down from the $100.98/share close last Friday, Visa (V) closed trading at $198.47/share bumping up from the $198.01/share last Friday & shares of Morgan Stanley (MS) closed at $51.70/share ticking lower from last Friday’s close of $51.87/share. JPMorgan Chase (JPM) closed at $102.96 down from $103.81/share last Friday & Citigroup (C) $42.71/share down from $43.95/share last week. PayPal Holdings (PYPL) closed at $202.73/share and Square (SQ) closed at $198.08 up substantially from last week’s close of $176.77/share. 

The S&P 500 closed at 3,509.44 gaining 7.3% wk/wk and is up 8.6% YTD. 

Elon Musk’s EV company Tesla (TSLA) closed at $429.95/share bouncing back up from $388.04/share last Friday.  Chinese EV company Nio Limited (NIO) carried forward its recent momentum this week established a new all-time of $43.30 prior to closing at $41.83 but substantially higher than the $30.58/share close last Friday.

The little guys on the Russell 2000 closed at 1644.16 (+6.9%) but remain down 1.4% YTD. 

Shares of freelance work facilitator Upwork (NASDAQ: UPWK) jumped 43.57% to close at $29.03/share on Thursday as they reported that revenue had grown 24% year-over-year to $96.7 million, exceeding guidance. Marketplace revenue grew 26% year-over-year to $88.0 million & marketplace take rate improved from 13.3% to 13.6% year-over-year. UPWK closed at $29.26/share on Friday up another .79%.

COMMODITY MOVES

Gold prices closed at $1,952/oz. up nicely from $1,881/0z. last Friday & silver prices closed at $25.71/oz. up from $23.71/oz. last Friday. North American silver and gold producer Hecla Mining Company (HL) ended the week at $5.59/share up from last Friday’s close of $4.58/share after recently establishing a new 52-week high of $6.79.  President and CEO Phillips S. Baker, Jr. also recently delivered a presentation titled“Hecla – A Uniquely Scarce Investment” at the Tribe Youtube Channel. Hecla will issue a news release reporting its third quarter 2020 financial results before market open on Monday, November 9, 2020.

MONEY UPDATE

The U.S. Dollar Index weakened to end the week at 92.26 down 1.9%.

The 2-yr Treasury yield closed flat w/w closing at .16%, the 10-yr yield dropped 2 basis points ending at .82% while the 30-yr yield ended at 1.607% down from 1.643% last Friday.

NEXT WEEK

We will be back with another full week of trading. Veteran’s Day lands on Wednesday, Nov. 11th in the US as banks, SEC and government agencies will be closed for the holiday. 

NEXT WEEK’S KEY MACROECONOMIC DATA

The macroeconomic schedule will deliver the Unemployment Rate report, the Fed’s upper bound key interest rate, and various PMI series.

STOCKS IN VIEW NEXT WEEK

• Shares of Atossa Therapeutics (ATOS) closed at $1.56/share up from $1.48 last Friday. 

• • Atossa Therapeutics is a clinical-stage biopharmaceutical company seeking to discover and develop innovative medicines in areas of significant unmet medical need with a current focus on breast cancer and COVID-19.

  • On October 13, Atossa’s CEO and CFO presented at the Tribe Public Presentation & Q&A event titled “Atossa Therapeutics: Tackling our Greatest Health Challenges – COVID-19 and Breast Cancer” which now can be viewed at the Tribe Public YouTube Channel.

• • Atossa recently announced it has now completed enrollment in its Phase 1 clinical study using Atossa’s proprietary drug candidate AT-301 administered by nasal spray.“Completing enrollment is a significant milestone and comes at a time when we are seeing a new wave if infections in certain geographies and an increased focus on developing therapies to treat COVID-19,” commented Steven Quay, M.D., Ph.D., Atossa’s President and CEO. “While the virus presents significant danger overall, the vast majority of people testing positive for COVID-19 do not require hospitalization and instead quarantine at home while they manage their symptoms and attempt not to infect those around them. As there are no currently FDA-approved treatments to help these patients, we are developing AT-301 for at home use so that they can recover faster.”

• • The Maxim Group’s Analyst Jason McCarthy, Ph.D. updated his research on Atossa Therapeutics stating “Factoring in COVID-19 Candidates, awaiting HOPE Study Initiation as Pandemic Continues – Raising His Price Target to $8 from $4. 

• Shares of INVO Bioscience (INVO) closed at $3.56/share down from the $3.73/share close last Friday.
  • INVO Bioscience, Inc. (INVO), the developers of INVOcell®, the world’s only in vivo Intravaginal Culture System, has a mission to increase access to care and expand infertility treatment across the globe with a goal of improving patient affordability and industry capacity. Industry forecasts suggest that only 1% to 2% of the estimated 150 million infertile couples worldwide are currently being treated which presents and interesting opportunity. 

• • INVO recently announced a new joint venture as it has teamed up with Dr. Francisco Arredondo, MD, a respected and experienced board certified reproductive endocrinologist, and Dr. Ramiro Ramirez, MD, a physician and owner of several successful enterprises in Mexico, to establish a joint venture through its wholly-owned subsidiary INVO Centers, LLC, a Delaware limited liability company (“INVO Centers”), focusing on developing the Mexico market for INVOcell. The new jointly-owned operation, named Positib Fertility, S.A. de C.V. (“Positib Fertility”), is a Mexico registered company that will focus on establishing fertility centers dedicated to offering INVOcell, with the initial center to be located in the city of Monterrey, Mexico.

• North American silver and gold producer Hecla Mining Company (HL) ended the week at $5.59 up from $4.58/share last Friday.

• • Hecla Mining Company (NYSE:HL) announced it will issue a news release reporting its third quarter 2020 financial results before market open on Monday, November 9, 2020. A conference call and webcast will be held Monday, November 9, at 10:00 a.m. Eastern Time to discuss third quarter 2020 financial results. You may join the conference call by dialing toll-free 1-833-350-1380 or for international by dialing 1-647-689-6934. The Conference ID is 6996406.

• • A Presentation & Q&A event video with North American Silver & Gold Producer Hecla Mining Company’s (NYSE: HL) President and CEO Phillips S. Baker, Jr. titled “Hecla – A Uniquely Scarce Investment”  is now available to view at the Tribe Youtube Channel.

• Shares of Fate Therapeutics (FATE) closed at $48.28/share up from last Friday’s close of  $44.40 after hitting a new all-time high  of $51.15 this week.
  
  • Fate is a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders.

• • This week, Fate reported their business highlights and financial results for the third quarter ended September 30, 2020. Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics stated, “The clinical data across our iPSC product platform continue to solidify our conviction that multiple doses of iPSC-derived NK cells can be administered off-the-shelf in the outpatient setting, are well-tolerated, and can drive anti-tumor activity, including in combination with monoclonal antibody therapy. We have now expanded the scope of clinical investigation for FT516 to solid tumors as well as for FT596 to chronic lymphocytic leukemia after observing clinical activity in diffuse large B-cell lymphoma at the first dose level. In addition, we have initiated first-in-human investigation of the first-ever CRISPR-edited, iPSC-derived cell therapy FT538, which incorporates three engineered elements to enhance multiple mechanisms of innate immunity, in acute myeloid leukemia and multiple myeloma.”

• Shares of NeuBase Therapeutics (NBSE) closed trading at $7.84/share which is the exact same close last Friday. 

• • NeuBase is developing the next generation of gene silencing therapies with its flexible, highly specific synthetic antisense oligonucleotides. The proprietary NeuBase peptide-nucleic acid (PNA) antisense oligonucleotide (PATrOL™) platform allows for the rapid development of targeted drugs, increasing the treatment opportunities for the hundreds of millions of people affected by rare genetic diseases, including those that can only be treated through accessing of secondary RNA structures. Using PATrOL technology, NeuBase aims to first tackle rare, genetic neurological disorders. NeuBase is continuing its progress towards developing treatment candidates in Huntington’s Disease (HD) and Myotonic Dystrophy (DM1.)

• • NeuBase’s CEO Dietrich A. Stephan, Ph.D. delivered his October 28th Tribe Public Webinar Event presentation titled “Manufacturing Heat Seeking Missiles Against Misbehaving Genes.” You may view the presentation the Tribe Public Youtube Channel here. 

• • Recently, NeuBase announced the addition of Peter Nielsen, Ph.D. to its scientific advisory board. Dr. Nielsen, the primary inventor of peptide nucleic acid (PNA) technology, brings extensive experience in genetic medicine to NeuBase as the Company optimizes its PATrOL™ therapies and moves them towards the clinic. Dr. Peter Nielsen is a leading expert in gene targeting, RNA interference and chemical replication and translation and was one of the inventors of PNAs in 1991. He is currently a professor at the University of Copenhagen where his lab focuses on PNAs in regard to drug discovery, gene targeting, antisense principles, cellular and in vivo delivery and administration of biopharmaceuticals. He is the co-author of more than 400 scientific papers and reviews as well as over 20 patents and patent applications, and he serves on the advisory board of four scientific journals. In addition to his esteemed academic career, Dr. Nielsen is the co-founder of two biotech companies in Denmark and is a member of EMBO and the Danish Academy of Technical Sciences. He received his Ph.D. in 1980 from University of Copenhagen.

• • RBC Capital Markets recently initiated coverage of NBSE today with an Outperform, Speculative Risk rating & a $16 price target. 

• We continue to like clean hydrogen solution provider Plug Power (PLUG) which closed at $18.86 up from  $14/share last Friday. Shares of PLUG are up significantly since we brought PLUG to your attention after they closed the $300M equity offering at $10.25 over the last couple of months and market pontificators like Jim Kramer are firmly in its corner. 

• Buyout rumors are still surfacing around Sonos (SNOS) which recently lost sponsorship from Apple (AAPL) & who is thought to be entering the market with their own products. The stock ended the week at $16.07 up from $14.60/share a week ago when we highlighted this situation. They report Q4 and fiscal 2020 results after the market close on Nov. 18th.

Thanks again for your attention this week. Please continue to share your thoughts, questions, & ideas as we move forward. 

In the meantime, please enjoy the balance of the weekly newsletter’s videos, quotes, updates. 

As always, I will leave you with an insightful quote to help form your investment thesis this week:

Economic Reports

On the macroeconomic side of the coin the schedule produced a mix of mostly positive reports as follows:On Monday we received the ISM Manufacturing Index for October which came in at 59.3% surprisingly well above the expansion level. The total construction spending report also confirmed a move higher by .3% month/month in September while total private construction spending also jumped .9% month/month but total public construction spending decrease by 1.7%. On Tuesday, the factory orders report for manufactured goods which confirmed a rise by 1.1% month/month in September, a rise for the fifth consecutive month. On Wednesday, The ISM Non-Manufacturing Index report for October which came in at 56.6% again well above the expansion line. The trade deficit report for September came in at $63.9B as export growth was $4.4B & import growth was $1.2B. The weekly MBA Mortgage Applications Index dropped 3.8%. The ADP Employment Change report for October estimated that 365k jobs were added. On Thursday, the initial jobless claims report confirmed a drop by 7k for the week ending October 31 to 751k while the continuing claims report for the week ending October 24 confirmed a drop by 538k to 7.285M. Productivity in Q3 also rose at a seasonally adjusted annual rate of 4.9% while unit labor costs dropped by 8.9%. On Friday, the Nonfarm payrolls report confirmed a rise by 638k in October while the unemployment rate came in at 6.9% & average hourly earnings rose by .1%. The consumer credit report confirmed a rise by $16.2B in September. Wholesale inventories report confirmed a rise by .4% month/month in September.

Investing & Inspiration

“The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett

“Thousands of experts study overbought indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply…and they can’t predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.” – Peter Lynch

“Investing puts money to work. The only reason to save money is to invest it.” – Grant Cardone

“Formal education will make you a living; self-education will make you a fortune.” – Jim Rohn

“You cannot save time for your future use however you can invest time for your future.” – John F. Heerdink, Jr. 

“We always live in an uncertain world. What is certain is that the United States will go forward over time.” – Warren Buffett

“Never test the depth of the river with both of your feet.” – Warren Buffet

“Know what you own, and know why you own it.” – Peter Lynch

“Liquidity is only there when you don’t need it.” -Old Proverb

“There is no such thing as no risk. There’s only this choice of what to risk, and when to risk it.” – Nick Murray

“If you want to be a millionaire, start with a billion dollars and launch a new airline.” – Richard Branson

“Fear incites human action far more urgently than does the impressive weight of historical evidence.” – Jeremy Siegel

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

“Spend each day trying to be a little wiser than you were when you woke up.” – Charlie Munger

“The entrance strategy is actually more important than the exit strategy.” – Edward Lampert

“The rivers don’t drink their own water; Trees don’t eat their own fruits. The sun does not shine for itself, And flowers do not spread their fragrance For themselves. Living for others is a rule of nature” – PopeFrancis

“It is impossible to produce superior performance unless you do something different from the majority.” – John Templeton

“Inaction and patience are almost always the wisest options for investors in the stock market.” – Guy Spier

“Remember that the stock market is a manic depressive.”  – Warren Buffett

“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