Markets Rise With Expansion Data, Nasdaq, FAANG’s, Tesla & Gilead Leading Way This Week

Overall the markets ended in positive territory again this week aided by the ongoing low-interest-rate environment & the monetary and fiscal stimulus that has continued to be pumped in during the Covid-19 pandemic. This week we received overall positive macroeconomic reports showing expansion, a couple of records on the Nasdaq which were boosted by a number of the FAANG’s flying to new record highs, a Tesla (TSLA) investor “Robinhood” like frenzy buying spree that pushed it to new all-time highs, and a positive Giliead (GILD) report on Friday that stated that the company’s new remdesivir data is showing an improvement in clinical recovery for severely-ill COVID-19 patients, as well as, a 62% reduction in the risk of mortality when comparing it to the standard of care. The positive move in the markets was realized again in the face of the troubling reports that COVID-19 cases, hospitalizations, slowing, or delays of reopening steps in states continues to increase.  Worldwide coronavirus cases indeed proceeded to move up from 10.69M a week ago to 12.4M while we have now seen 557k deaths up from 516k deaths. In the U.S. we are at 3.22M up from 2.74M reported cases and now +136K deaths have been reported up from +130k last week.

The macroeconomic schedule brought forth the following reports this week that showed signs of reopening measures that were having a positive effect in its early going. On Monday, we received the ISM Non-Manufacturing Index report for June which confirmed that the US is now back in expansion mode as it came in at 57.1% well past the Mendoza line. On Tuesday, we learned that the Job Openings report (JOLTS) confirmed that job openings rose to 5.397M in May further reflecting the reopening measures were at work.  On Wednesday, we learned that consumer credit pulled back by $18.2B in May as lenders are further tightening. The weekly MBA Mortgage Applications Index Report also showed a rise of 2.2%. On Thursday, the initial claims report confirmed a drop by 99k for the week ending July 4 to 1.314M while continuing claims for the week ending June 27 fell significantly by 698k to 18.062M. The Wholesale inventories report also confirmed a drop of 1.2% in May. On Friday, the Producer Price Index for final demand dropped by.2% month/month and when you exclude food & energy, the index for final demand dropped by .3% month/month.

MARKET RESULTS & MARKET LEADERS

The consumer discretionary sector up 4.8%, the communication services sector up 4.7%, & the information technology sector up 2.7% led the markets this week while the energy sector which dropped 4.6% provided some drag.

The Dow ended the week at 26,075.30 representing a weekly gain of 1% and is now down 8.6% YTD. The Russell 2000 closed at 1,422.68 representing a weekly drop of .6% and is now down 14.7% YTD. The S&P 500 closed at 3,185.04 gaining 1.8% and is now down 1.4% YTD. The Nasdaq Composite closed at a new record high at 10,617.44 on Friday representing a weekly 4% upward move & is now up 18.3% YTD. 

From the financials sector, this week we saw shares of Goldman Sachs (GS) closed trading at $205.56/share up from the $197.40/share last Friday, American Express (AXP) closed at $93.23/share down from the $94.33/share last Friday, Visa (V) closed trading at $192.55/share down from the $195.67/share last Friday & shares of Morgan Stanley (MS) closed at $49.80/share up from last Friday’s close of $47.79/share.

The FAANG’s experienced a great week with Amazon and Netflix outperfroming ending as follows: Facebook (FB) closed at $245.07/share, +.23% Friday ($233.42/share a week ago), Apple (AAPL) closed at $383.68/share, +.25 on Friday,($364.11/share a week ago), Amazon (AMZN) closed at $3,200/share, +.55% Friday ($2,890.30/share a week ago), Netflix (NFLX) closed at $548.73/share, +8.07% Friday, ($476.89/share a week ago), & Alphabet (GOOG) closed at $1,541.74/share, +2.04% Friday, ($1,464.70/share a week ago.)

COMMODITY MOVES

Gold prices closed at $1,799/oz. up from $1,782/0z. last Friday & silver prices closed at $19.03/oz. up sharply from $18.20/oz. last week. North American silver and gold producer Hecla Mining Company (HL) ended the week at $4.02/share up from last Friday’s close of $3.19/share while establishing a new 52-week high on Friday of $4.03. On Friday, Hecla announced that they are experiencing “Strong Production and Cash Generation.” 

Oil prices gained .4% to end above $40 again at $40.57/bbl. Energy giant Chevron (CVX) moved lower this week to close at $85.23/share ($88.31, last wk) and Exxon (XOM) moved down closing at $42.65/share ($44.08, last wk.) Occidental Petroleum Corporation (OXY) closed at $16.71 down from $17.78/share last Friday. Midstream player, Enterprise Products Partners (EPD), closed trading at $17.25 down from $17.85/share last Friday and currently sports at an attractive $1.78/share dividend or 10.32%. 

MONEY UPDATE

The U.S. Dollar Index weakened again to end the week at 96.63 down from 97.22 last week.

The 2-yr Treasury yield closed at .16% 1 basis point lower from the .15% mark last Friday, the 10-yr yield closed at .63% up 5 basis points from .68% while the 30-yr yield ended at 1.335% down slightly from 1.433% last Friday.  

NEXT WEEK

We will be back to a full week of trading sessions again next week with 8% of S&P 500 companies reporting Q2 earnings kicking this go earnings season.  We will be seeking the following macroeconomic reports and stocks in view throughout the week:

MACROECONOMIC DATA

• The inflation report on Tuesday
• The retail sales report on Thursday
• The housing starts report on Friday

STOCKS IN VIEW

• Shares of Atossa Therapeutics (ATOS) closed at $3.69 on Friday. 

  • Interest continues to swell around their breast cancer treatment programs and their COVID-19 drug candidates the trading volatility to the upside this year up from $.76/share.

  • This week ATOS announced that it has hired key personnel in clinical, regulatory, and chemistry manufacturing and controls (CMC). The new hires include Heather Fraser, Ph.D., as vice president of clinical, regulatory, and CMC; Natalie Farris, MS, as senior director of CMC; and Devon Payne as director of clinical operations. “Hiring of these talented and accomplished individuals will help accelerate the advancement of our development pipeline, which includes programs in breast cancer and COVID-19. We welcome Heather, Natalie, and Devon to Atossa and look forward to their important contributions as we execute on our value-creation strategy,” commented Steven Quay, M.D., Ph.D., president, and CEO of Atossa.  
  • Dr. Quay was recently interviewed on FOX 26 Houston this week and the show was titled “Company developing nasal spray to treat COVID-19.” Again as I mentioned yesterday, I believe it is worth the time for all to view this story here as it sheds a great deal of light on the 4 stages of COVID-19 and their potential treatments.
  • He has also recently published the following book “Your COVID-19 Survival Manual: A Physician’s Guide to Keep You and Your Family Healthy During the Pandemic and Beyond,” in paperback and eBook format on his website, www.DrQuay.com. Proceeds from the book will go to military veterans performing COVID-19 relief work in their communities.  You may order it here.
  • I would expect to get some form of clinical progress update from ATOS as soon as this coming week.

• Shares of INVO Bioscience (INVO) closed at $3.50/share with only 7.89 million shares outstanding and approximately 15% insider ownership the share float is tight. 

• • Industry forecasts suggest that only 1% to 2% of the estimated 150 million infertile couples worldwide are currently being treated
  • INVO’s mission is to increase access to care and expand infertility treatment across the globe with a goal of improving patient affordability and industry capacity. 
  • Recently, a spotlight report was published by Birmingham, Alabama-based America Institute of Reproductive Medicine (AIRM) highlighting the success achieved in their practice utilizing INVOcell. INVO’s INVOcell® is the world’s only in vivo Intravaginal Culture System. “The AIRM clinic became an early adopter and advocate for the use of INVOcell shortly after we received FDA-clearance. We appreciate their willingness to share their story of that successful implementation of INVOcell within their clinical practice, which highlights important aspects of our INVOcell technology solution,” stated Steve Shum, CEO of INVO Bioscience. You can review the report here. 
  • I am expecting to see the company begin to push forward with new marketing and market supportive initiatives since they have recently been fueled up by financing that may result in further adoption in the US clinics and establishing new joint ventures, partners, and distributors throughout the world.

• North American silver and gold producer Hecla Mining Company (HL) ended the week at $4.02/share up from last Friday’s close of $3.19/share while establishing a new 52-week high on Friday of $4.03.]

• • On Friday, Hecla announced that they are experiencing “Strong Production and Cash Generation.” If silver continues to hold above $19/oz or move higher it, not to mention if Gold continues to move higher, then it would seem that Hecla could become break out stock this year. 

• Shares of Fate Therapeutics (FATE) closed at 36.21/share last Friday and this Friday closed higher at $35.26. Its new all-time & 52-week high is $38.52 and its 52-week low of $12.59.   

• • On June 11th, FATE announced that it closed an underwritten public offering of 7,108,796 shares of its common stock, which included 927,324 shares that were issued pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $28.31 per share. Aggregate gross proceeds from this offering, including the exercise of the option, were approximately $201.3 million, prior to deducting underwriting discounts and commissions and estimated offering expenses. Fate Therapeutics, Inc. (FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders. Are you still invested in Fate after meeting them via this newsletter and attending meetings over the last couple of years when it was in the $3-4 range?… Recently, Fate announced that the U.S. Food and Drug Administration (FDA) has cleared the Company’s Investigational New Drug (IND) application for FT538, the first CRISPR-edited, iPSC-derived cell therapy. FT538 is an off-the-shelf natural killer (NK) cell cancer immunotherapy that is derived from a clonal master induced pluripotent stem cell (iPSC) line engineered with three functional components to enhance innate immunity: a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor; an IL-15/IL-15 receptor fusion (IL-15RF); and the elimination of CD38 expression. The Company plans to initiate a clinical investigation of three once-weekly doses of FT538 as monotherapy in acute myeloid leukemia (AML) and in combination with daratumumab, a CD38-directed monoclonal antibody therapy, for the treatment of multiple myeloma.

• Shares of Neubase Therapeutics (NBSE) closed trading at $8.29/share.  

• • We are following Neubase Therapeutics (NBSE) for a number of reasons including its development of a modular antisense peptide nucleic acid (PNA) platform with the capability to address rare genetic diseases caused by mutant proteins with a single, cohesive approach.
  • NBSE was added to the Russell 3000 recently.

• Shares of Aduro (ADRO) closed at $2.66/share up from $2.50/share last Friday.

• • On June 2nd, Aduro Biotech, Inc.(ADRO) and Chinook Therapeutics, Inc., a privately-held clinical-stage biotechnology company focused on the discovery, development, and commercialization of precision medicines for kidney diseases, today announced that the companies have entered into a definitive merger agreement pursuant to which Aduro will acquire all of the outstanding capital stock of Chinook in exchange for shares of Aduro common stock representing approximately 50 percent of Aduro’s outstanding common stock immediately following completion of the transaction.
  • The combined company is expected to have approximately $200 million in cash, cash equivalents, and marketable securities at closing, including $25 million in additional financing committed by Chinook’s existing investors.
  • Following closing, which is expected to occur in the second half of 2020, Aduro will be renamed Chinook Therapeutics, Inc., and is expected to trade on the Nasdaq Global Market under the ticker symbol “KDNY”.
  • Recently, ADRO announced that the first patient with IgA nephropathy has been dosed in a Phase 1 clinical trial of BION-1301, an investigational humanized IgG4 monoclonal antibody that blocks APRIL binding to both the BCMA and TACI receptors. “We are thrilled to have dosed the first patient with IgA nephropathy in the Phase 1 clinical study of our investigational anti-APRIL antibody, BION-1301,” said Dimitry S.A. Nuyten, M.D., Ph.D., chief medical officer of Aduro.
  • “The data Aduro recently presented from Parts 1 and 2 of this study in healthy volunteers at the 57th ERA-EDTA Virtual Congress indicated BION-1301 was well-tolerated, had a half-life of approximately 33 days, achieved over 90% target engagement with a single 450 mg dose of BION-1301 and demonstrated dose-dependent and durable reductions in IgA and IgM levels, and to a lesser extent, IgG levels. We look forward to hopefully replicating this effect in addition to exploring BION-1301’s disease-modifying potential in patients with IgA nephropathy in Part 3 of the ongoing Phase 1 clinical study.”

• Tesla (TSLA) shares flew up another 27% this week to make it a whopping 53% in the last two weeks to close a  record of $1544.65/share, sporting a whopping $286.49B market cap and making it the most valuable car company on the planet. 

• • This has come about as electric car companies came into view and momentum investors jumped in as expectations continued to beat. Tesla delivered ~90,650 vehicles in Q2. 

• TransEnterix (TRXC) closed trading at $.3265/share on Friday. 

• • On Monday, TRXC announced the closing of $15M registered direct common share offering at $.35/share.
  • TRXC is a medical device company that is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery.

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. 

I will leave you with the insightful following quote:

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