Nasdaq Drifted Lower This Week As The Dow 30, S&P 500 & Russell 2000 High Five

Overall the markets ended in positive territory again this week, except for the recently white-hot & record-breaking Nasdaq that fell back 1.1%.

The earnings season once again kicked off as a number of banks reported & generally beat earnings expectations. However, the same banks also reported that they have made larger than expected provisions for credit losses sending an overall negative and cautionary message.

Coronavirus worries continued to grow even though there were a number of updates regarding vaccines and treatment options as we swiftly moved deeper into the summer months. Cases now number 13,926,476 worldwide & unfortunately, we in the US cannot help but try to be number one in just about everything, including this sad situation too. Indeed, we now lead all countries with 3,677,453 cases.  Please wear a mask when in public for the time being folks and please do your part to fight for us all in order to stem the COVID-19 tide.

Stimulus measures also continued to roll out, take effect and more are being contemplated in various forms. This week’s macroeconomic schedule brought forth evidence of continued, but incomplete reopening measures, as well as, the stimulus measures that have been pushed forward to date. On Monday, we received the Treasury Budget which was confirmed to have experienced an $864.1B deficit for the month of June as tax the filing deadline had been extended to July 15th & COVID-19 shutdown stimulus measures were in place. On Tuesday, we received the Consumer Price Index (CPI) for June moved up .6% month/month and when excluding food and energy, the CPI moved up .2% month/month. This is significant because it was the first move higher since this past February. Also, the NFIB Small Business Optimism report for June jumped to 100.6. On Wednesday, we received the total industrial production report confirmed a rise of 5.4% month/month in June while the capacity utilization rate rose to 68.6%. The Empire State Manufacturing Survey for July moved significantly higher to 17.2. The Import prices moved up 1.4% in June and when excluding oil, prices rose .3%. The Export prices moved up 1.4% in June and when you exclude agriculture prices rose 1.4%. The weekly MBA Mortgage Applications Index jumped 5.1%. On Thursday, we received the initial jobless claims report for the week ending July 11 confirmed a drop by 10k to 1.3M while continuing claims for the week ending July 4 dropped by 422k to 17.338M. The Retail Sales report confirmed a rise by 7.5% month/month in June and when you exclude autos, then retail sales jumped 7.3%. The NAHB Housing Market Index report for July confirmed a rise from 58 to 72. The Philadelphia Fed Index report for July confirmed a drop to 24.1. The Business inventories report showed a drop of 2.3% in May. On Friday, we saw that Total housing starts jumped 17.3% month/month in June to a seasonally adjusted annual rate of 1.186M units while building permits increased 2.1% to 1.241M. The preliminary University of Michigan Index of Consumer Sentiment report for July confirmed a decrease of approx. 5 points to 73.2.

MARKET RESULTS & MARKET LEADERS

The Dow ended the week at 26,671.95 representing a weekly gain of 2.3% and is now down 6.5% YTD. The Russell 2000 closed at 1,473.32 representing a weekly rise of 3.6% and is now down 11.7% YTD. The S&P 500 closed at 3,224.73 gaining 1.2% and is now down on .2% YTD. The Nasdaq Composite which closed at a new record high last Friday, pulled back this week by 1.1% but remains up 17.1% YTD. 

The industrials sector moved up 5.8% and the materials sector moved up 5.4% to lead all sectors this week.

From the financials sector, we saw a bit of a rebound as the Q2 earnings revealed overall earnings beats. The S&P 500 financials sector moved up 2% as shares of Goldman Sachs (GS) closed trading at $241.41/share up from the $205.56/share last Friday, American Express (AXP) closed at $95.18/share up from the $93.23/share last Friday, Visa (V) closed trading at $195.09/share up from the $192.55/share last Friday & shares of Morgan Stanley (MS) closed at $52.41/share up from last Friday’s close of $49.80/share.

Overall it was a very good week in the healthcare sector too as reported progress on vaccines and treatments seemed to dominate stories on the worldwide web and financial circuits. Names of companies like Novavax (NVAX) & Moderna (MRNA) are now household names bringing forth hope & promise as they report progress on their vaccines front while their rising stock values equally make impressive moves. Pfizer (PFE) in partnership with BioNTech (BNTX) also received a fast-track designation from the FDA for a pair of vaccine candidates this week. The S&P 500 healthcare sector closed up 5.15% at 1,233.67 up from 1,173.97 last Friday. The Ishares Nasdaq Biotechnology ETF (IBB) moved a higher again this week closing at $143.96 vs. last Friday’s close of $139.21. The 52-wk range is $92.15 – $144.54. The NYSE Arca Biotech Index (^BTK) closed at 6,040.61 up from the 5,905.41 level last week. The new 52-week high is 6066.14. Johnson & Johnson (JNJ) closed at $149.35/share up from $142.37.

The FAANG show this week sort of took a back seat after its recent runup and experienced lackluster performance as follows: Facebook (FB) closed at $242.03/share, +.46% Friday ($245.07/share a week ago), Apple (AAPL) closed at $385.31/share, -.20% on Friday,($383.68/share a week ago), Amazon (AMZN) closed at $2961.97/share, -1.26% Friday ($3200/share a week ago), Netflix (NFLX) closed at $492.99/share, -6.52% Friday, ($548.73/share a week ago) after missing earnings expectations and offering a soft outlook, & Alphabet (GOOG) closed at $1,515.55/share, -.16% Friday, ($1,541.74/share a week ago.)

COMMODITY MOVES

Gold prices closed at $1,810/oz. up from $1,799/0z. last Friday & silver prices closed at $19.65/oz. up sharply again from $19.03/oz. last Friday. North American silver and gold producer Hecla Mining Company (HL) ended the week at $4.57/share up from last Friday’s close of $4.02/share while establishing a new 52-week high on Friday of $4.615. Last Friday, Hecla announced that they are experiencing “Strong Production and Cash Generation.” 

Oil prices ended basically flat for the week at $40.56/bbl. Energy giant Chevron (CVX) moved higher this week to close at $87.19/share ($85.23, last wk) and Exxon (XOM) moved up closing at $43.52/share ($42.65, last wk.) Occidental Petroleum Corporation (OXY) closed at $16.28 down from $16.71/share last Friday. Midstream player, Enterprise Products Partners (EPD), closed trading at $18.17 up from $17.25/share last Friday and currently sports at an attractive $1.78/share dividend or 9.87%. 

MONEY UPDATE

The U.S. Dollar Index weakened again to end the week at 95.95 down from 96.63 last week.

The 2-yr Treasury yield closed at .14% 2 basis point lower from the .16% mark last Friday, the 10-yr yield closed at .63% flat on the week while the 30-yr yield ended at 1.33% down slightly from 1.335% last Friday.  

NEXT WEEK

We will be back to a full week of trading sessions again next week with ~20% of S&P 500 companies reporting Q2 earnings.  

We will also be seeking the following macroeconomic reports and “stocks in view” throughout the week:

MACROECONOMIC DATA

• The existing home sales report on Wednesday
• The leading economic index report on Thursday
• The July’s preliminary Purchasing Managers’ Index report on Friday

STOCKS IN VIEW

• Shares of Atossa Therapeutics (ATOS) closed at $4.24 on Friday up from $3.69 last 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 and this week achieved a new 52-week high of $4.69/share.

  • This week Atossa announced that it had successful results from in vitro testing of AT-301, Atossa’s proprietary COVID-19 nasal spray drug candidate. The preliminary study results showed that AT-301 inhibits SARS-CoV-2 infectivity of VERO cells in a laboratory culture, which is the standard disease model used for the initial screening of COVID-19 drug candidates.  AT-301 is being developed with a nasal spray delivery mechanism because many COVID-19 patients are infected via the nasal passage. Collectively, the components of AT-301 are believed to help maintain a protective mucosal like layer within the nasal cavity with both anti-viral properties and protective mucosal like barrier that may lead to lower infectivity and reduced symptoms in COVID-19 patients due to their interference with the spike protein of the virus in the nasal cavity and upper respiratory tract.  Atossa’s nasal spray formulation AT-301 is being designed to contain ingredients that can potentially block SARS-CoV-2 viral entry gene proteins in nasal epithelial cells by interfering with spike protein activation by host proteases, by masking receptor binding domains (RBD) via electrostatic mechanisms, and by providing a generalized mucoadhesive epithelial barrier.

• • Atossa followed up on Thursday this week and announced that it has contracted with Avance Clinical Pty Ltd to conduct a clinical study of Atossa’s proprietary drug candidate AT-301, to be administered by nasal spray. Avance is a leading Australian clinical research organization and has successfully completed multiple clinical studies of Atossa’s proprietary Endoxifen.

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

• • Last 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.

• Shares of INVO Bioscience (INVO) closed at $3.72/share  up from $3.50/share last week. 

• • 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. 

• • Industry forecasts suggest that only 1% to 2% of the estimated 150 million infertile couples worldwide are currently being treated

• • This week, INVO announced that it took a key step forward as they have received product registration approval for INVOcell in Turkey, paving the way for commercialization efforts to begin in the country. “We are pleased to have achieved this important registration approval for Turkey which enables our distribution partner, Orcan Medical, to now begin commercialization efforts in the country. Similar to other regions around the world, the people of Turkey are faced with increased infertility rates and challenges to receiving treatment, including access to care and the cost of treatment. As the world’s only Intravaginal Culture System, INVOcell, a streamlined treatment solution, is uniquely positioned to address the challenges within the infertility industry,” stated Steve Shum, CEO of INVO Bioscience. READ the rest of the story.

• • During the period from Q4, 2019 to Q1 2020, after Steve Shum became the new CEO of INVO Bioscience, INVO signed up 6 distributors and/or Joint Venture relationships in the following countries: Turkey, Jordan, India, Nigeria, Ethiopia, Sudan, & Uganda. Per recent discussions with Steve Shum, the registration process in countries is typically in the 6-month range. As evidenced today INVO is making progress per the successful registration approval in Turkey that it is reasonable to assume that they may be making progress along the same lines in the other 5 countries signed during that period. I am also expecting the company to give us some updates on other countries that could be added to their growing distribution network. \

• • 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 push forward with new market supportive initiatives as 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.

• • INVO has  ~7.89 million shares outstanding and with ~15% insider ownership the share float is tight and recently confirmed that the company raised ~$3.5M.

• North American silver and gold producer Hecla Mining Company (HL) ended the week near its newly minted 52-wk high $4.615/share closing at $4.57/share up from last Friday’s close of $4.06/share.

• • Last 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 continue to become a break out stock this year. 

• Shares of Fate Therapeutics (FATE) closed at 35.26/share last Friday and this Friday closed lower at $34.400. Its new all-time & 52-week high is $38.52 and its 52-week low of $12.59.

• • Fate is a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders

• • July 14th, FATE announced that the Company entered into an exclusive license agreement with Baylor College of Medicine covering alloimmune defense receptors, a first-in-class approach that renders off-the-shelf allogeneic cell products resistant to host immune rejection. Preclinical studies published in the journal Nature Biotechnology (https://www.nature.com/articles/s41587-020-0601-5) demonstrate that allogeneic cells engineered with a novel alloimmune defense receptor (ADR) are protected from both T- and NK-cell mediated rejection, and provide proof-of-concept that ADR-expressing allogeneic cell therapies can durably persist in immunocompetent recipients.

• • On July 9 Fate announced that the U.S. Food and Drug Administration (FDA) cleared the Company’s Investigational New Drug (IND) application for FT819, an off-the-shelf allogeneic chimeric antigen receptor (CAR) T-cell therapy targeting CD19+ malignancies. FT819 is the first-ever CAR T-cell therapy derived from a clonal master induced pluripotent stem cell (iPSC) line and is engineered with several first-of-kind features designed to improve the safety and efficacy of CAR T-cell therapy. The Company plans to initiate a clinical investigation of FT819 for the treatment of patients with relapsed / refractory B-cell malignancies, including chronic lymphocytic leukemia (CLL), acute lymphoblastic leukemia (ALL), and non-Hodgkin lymphoma (NHL).

• • On June 11th, FATE announced that it had 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. 

• Shares of Neubase Therapeutics (NBSE) closed trading at $7.88/share down from $8.29/share last Friday.  

• • 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 $2.80/share up from $2.66/share last Friday after reaching an intr week high of $2.94/share.

• • 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.”

• TransEnterix (TRXC) closed trading at $34/share up from the $.3265/share last Friday. 

• • TRXC is a medical device company that is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery.

• • On Monday, July 6th TRXC announced the closing of $15M registered direct common share offering at $.35/share and came into focus on our radar as it is again “gassed up” for the time being.

• • TRXC shares swiftly came down from the $1 level prior to the deal that was priced at $.35/share (no warrants) as it would appear that shorting and/or a significant amount of selling took place prior to the closing of the funding.

• • TRXC shares have already bounced once post the recent funding from the $.30 cent range to above the $.42 cent level and if Friday’s stock performance is evidence then it could be at least heading back to the same level soon and if lucky could recover to predeal levels.

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 quote:

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