Markets Served A Heaping Decline With A Side of Kombucha As The Correction Continued

Happy Halloween All. As I pop open another bottle of kombucha the weekend searching for answers, reflecting on the week’s events, and soaking in the grape vibes flavored probiotic tea, it feels that I or rather we have been served more tricks than treats and we are stuck on a slippery down hill treadmill again. In fact, it was a week in the markets that many of us would like to forget. We experienced daily decline after daily decline outside the baby rebound on Thursday.

Stimulus hopes were pulled out from under the markets shaky feet this week as politicians pushed decisions off until after the presidential election & coronavirus pandemic growth and resurgence reports surfaced across the world and resulting lockdowns (France/Germany) and some cases riots (Italy) permeated the world wide web and investors’ minds like an unrelenting storm. One of the key developers for a potential coronavirus vaccine, Pfizer (PFE), also announced that it was delaying its Phase 3 vaccine trial results. We also saw that a paper published this week which confirmed a realization, as many of us suspected, where Dr. Steven Quay, M.D., PhD., head of two COVID-19 therapeutic programs at Atossa Therapeutics, Inc. (NASDAQ: ATOS), illuminated new scientific observations and conclusions documenting that the SARS-CoV-2 pandemic began at the General Hospital of Central Theater Command of People’s Liberation Army (PLA Hospital) in Wuhan, China. Furthermore, International biospecimen data repositories are reported to indicate as early as December 10, 2019 COVID patient records were being created by PLA personnel, weeks before the Chinese government informed the WHO of the pandemic. You can learn more by visiting his website and by watching his presentation at Dr Quay’s website. To top it all off, we received a number of earnings and guidance reports that missed the mark from big household and widely held names on the Dow and beyond. i.e, Visa (V) , Caterpillar (CAT), Facebook (FB), etc. Basically, it was not a pretty site this week, which left us at a point where we are nearly down 10% from the markets highs, firmly in correction mode, and with an outlook that is less than clear. Hopefully, we will have at least the elections that is diving our country behind us soon and at least that picture will be clear once more. 

On the macroeconomic side of the coin the schedule produced a mix of reports as follows: On Monday we received the US new home sales report which confirmed a drop to 959k in September representing a 3.5% month/month drop. On Tuesday, report that US new home sales dropped to 959k in September representing a 3.5% month/month drop. On Wednesday, the total durable orders report confirmed a rise by 1.9% month/month in September leaving us wit the understanding that business spending continues rebound. However, the Conference Board’s Consumer Confidence Index report confirmed a fall to 100.9 in October as consumers felt less confident about the short-term. The FHFA Housing Price Index for October rose 1.5% & the S&P Case-Shiller Home Price Index for August moved up by 5.2%. On Friday, the Personal income report confirmed a rise by .9% month/month in September while personal spending increased by 1.4%. The PCE Price Index rose .2% month/month. The final October reading for the University of Michigan’s Index of Consumer Sentiment came in at 81.8. The Q3 Employment Cost Index rose .5% while wages and salaries, increased by .4%.

MARKET RESULTS

All 11 sectors finished deeply in the red this week while the information technology sector ended down 6.5% & the industrials sector ended equally down 6.5% leading the overall decline.

The little guys on the Russell 2000 closed at 1,538.48 (-6.2%) which is back down 7.8% YTD. 

The tech-heavy Nasdaq Composite dropped 5.5% week-over-week to close at 10,911.59 (-5.5%) but remains up 21.6% YTD.

The highly weighted FAANG’s ended as follows:  Facebook (FB) closed at $263.11/share, -6.31% Friday ($284.79/share a week ago), Apple (AAPL) closed down 5.6% on Friday at $108.86/share and down from $115.04/share a week ago. Amazon (AMZN) closed at $3,036.15/share, -5.45% Friday ($3,204.40/share a week ago), Netflix (NFLX) closed at $475.74/share, -5.65% Friday, ($488.28/share a week ago), & Alphabet (GOOG) closed at $1,621.01/share, +3.43% Friday, ($1,641/share a week ago.) Four FAANGs reported earnings on Thursday this week as Apple (AAPL) beat expectations, Amazon (AMZN) beat estimates, Alphabet (GOOG) beat estimates, & Facebook (FB) beat estimates but warned about uncertainty in 2021.

The Dow ended the week at 26,501.60 down 6.5% and is now down 7.1% YTD as several components missed Wall Street’s expectations. Around the Dow 30, Johnson & Johnson (JNJ) closed at $137.11/share down again from last week’s close of $145.24. Shares of Coca-Cola (KO) closed at $50.52/share slightly up from last Friday’s close of $50.03/share. Shares of Disney (DIS) closed at $128.351/share up again from last Friday’s close of $126.81/share. Shares of Nike (NKE) closed at $129.99/share up from $128/share last Friday. Intel (INTC) closed at $44.28 down again from the $48.2 close last Friday after recently disappointing on earnings & warning about operating margin next quarter.

Shares of Deere (DE) closed down again this week closing at $225.91/share down from last week’s close of $239.53/share. Pharmaceutical giant Merck (MRK) closed at $75.21/share closed down from last Friday’s close of $79.83/share, energy giant Chevron (CVX) closed at $69.50 down from last Friday’s close of $72.57/share, Caterpillar (CAT) closed at $157.05/share substantially down from last Friday’s close of $168.59/share after missing wall street’s estimates. Walmart (WMT) closed at $138.75/share down from last Friday’s close of $143.85/share. Shares of Microsoft (MSFT) closed at $202.47/share down from last Friday’s close of $216.23/share, Salesforce (CRM) closed at $232.27 down again from $250.52 last Friday & Boeing (BA) closed $144.39 down from last Friday’s close of $167.36/share after missing estimates.

Around the financials sector horn we saw the shares of Goldman Sachs (GS) close trading at $189.04/share down from last Friday’s close of $205.04/share, American Express (AXP) closed at $91.24/share down from the $100.98/share close last Friday, Visa (V) closed trading at $181.71/share down from the $198.01/share last Friday as they beat earnings expectations & shares of Morgan Stanley (MS) closed at $48.15/share down from last Friday’s close of $51.87/share. JPMorgan Chase (JPM) closed at $98.94 down from $103.81/share last Friday & Citigroup (C) $41.42/share down from $43.95/share last Friday. PayPal Holdings (PYPL) closed at $186.13/share down 4.57% on Friday after reaching an all-time new high of $215.83.

The S&P 500 closed at 3,269.96 losing 5.6% wk/wk and remains up 1.2% YTD. 

Elon Musk’s EV company Tesla (TSLA) closed at $388.04/share down from $420.63/share last Friday.  Chinese EV company Nio Limited (NIO) regained momentum this week established a new hitting an all-time new high of $32.20 this week prior to closing at $30.58/share down 4.41% on Friday.

COMMODITY MOVES

Gold prices closed at $1,881/oz. down from $1,902/0z. last Friday & silver prices closed at $23.71/oz. down from $24.70/oz. last Friday. North American silver and gold producer Hecla Mining Company (HL) ended the week at $4.58/share down from last Friday’s close of $5.15/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.

Oil prices ended at $35.70/bbl down 10.5% as growth concerns increased. Midstream player, Enterprise Products Partners (EPD), closed trading at $16.57/share down from $17.21/share last Friday and currently sports at an attractive $1.78/share dividend or 10.58%. USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $10.01/share down from the $10.72/share close last Friday and currently sports a juicy $2.10/share (21.23%) dividend.

MONEY UPDATE

The U.S. Dollar Index strengthened to end the week at 94.05 up 1.3% from 92.72 last week.

The 2-yr Treasury yield closed down 1 basis point w/w closing at .15%, the 10-yr yield rose 2 basis points ending at .86% while the 30-yr yield ended at 1.664% up from 1.643% last Friday.

NEXT WEEK

We will be back with another full week of trading as we rush forward to the U.S. presidential election next Tuesday. 

NEXT WEEK’S KEY MACROECONOMIC DATA

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

STOCKS IN VIEW NEXT WEEK

• Shares of Atossa Therapeutics (ATOS) closed at $1.48/share down from $1.83 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 You Tube 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 $3.73/share down from the $3.99/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 $4.58 down from $5.15/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 $44.40/share slightly down from last Friday’s close of  $48.36.
  
  • Fate is a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders.

• • Aug. 19, Fate announced that Edward Dulac has been appointed Chief Financial Officer. Mr. Dulac comes to the Company from Celgene Corporation, where he most recently served as Vice President, Business Development & Strategy, and brings an extensive array of biopharmaceutical experience having served for over 20 years in positions in finance, business development, and product portfolio strategy.

• Shares of NeuBase Therapeutics (NBSE) closed trading at $7.84/share up down from $8.82/share 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 $14/share down from the 15.03/share close 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) which is thought to be entering the market with their own products. The stock ended the week at $14.60/share down 4.29%. 

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 NAHB Housing Market Index report which confirmed a rise to a new all-time high of 85 in October. On Tuesday, the total housing starts report confirmed a rise by 1.9% month/month in September to a seasonally adjusted annual rate of 1.415M units while total building permits rose by 5.2% month/month to 1.553M. On Wednesday, the schedule offers the weekly MBA Mortgage Applications Index, which dropped by .6%. On Thursday, the weekly jobless claims report confirmed a number that was better than expected at 787K vs. 860K & continued claims dropped better than expected too coming in at 8.37M vs. ~ 9.5M. The U.S. insured unemployment rate also dropped to 5.7%. U.S. Sept existing home sales also climbed 9.4% to 6.54M unit rate while the U.S. September inventory of homes for sale came in at 1.47M units & the national median home price for existing homes is now at $311,800, up 14.8% year/year. The Conference Board’s Leading Economic Index report confirmed a rise by .7% month/month in September. On Friday, the preliminary Markit Manufacturing PMI report confirmed a rise to 53.3 in October & the preliminary Markit Services PMI report also rose to 56 in October.

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