Russell 2000, Gold & Silver Surge As Markets Push Higher For Weekly Gains

Overall the markets pushed higher across the board this week as all indices ended significantly higher. The Russell 2000 had a particularly stellar week as it rose 6% and now is only down 5.9% YTD. The precious metals also surged forward as gold and silver continued to fly higher to levels either not seen before, as in the case of gold, or at least not seen since the 2011 timeframe as is the case for silver. With the dollar continuing to drift lower the rising trends of gold and silver seem to have very strong legs this year.

The growing number of coronavirus cases in the world and specifically in the US along with the associated delays or rollbacks of reopenings in the US continued to haunt investors’ minds and cast a shadow over the worldwide economy again this week. Coronavirus cases now number 19.2M up from 17.3M last week worldwide and 716k deaths. The US now has confirmed 4.91M cases up from 4.594M cases last Friday and 160k deaths. Democrats and Republicans continued to disagree on provisions and failed to come to an agreement delaying further stimulus.  

The macroeconomic schedule on the other hand brought forth the following positive reports this week: On Wednesday, we received the ISM Non-Manufacturing Index report which confirmed a rise to 58.1% in July hitting a mark that has not been seen since February 2019. The Trade Balance report for June also confirmed a tightening to $50.7B. The ADP Employment Change report for July also confirmed that ~167k jobs were created in the private sector. On Thursday, we received the initial claims report for the week ending August 1 which dropped by 249k to 1.186M while the continuing claims report for the week ending July 25 dropped by 844k to 16.107M as both beat expectations. On Friday, the Employment Situation Report for July confirmed that private-sector payrolls rose by 1.462M in July while nonfarm payrolls rose by 1.763 million. The Wholesale inventories report confirmed a drop of 1.4% in June.

MARKET RESULTS & MARKET LEADERS

The Dow ended the week at 27,433.48 representing a weekly gain of .8% and is now down 3.9% YTD. Dow 30 component and entertainment giant The Walt Disney Company (DIS) beat earnings expectations posting a quarterly profit while confirming impressive streaming subscriber numbers as the stock rose ~11% closing at $129.93/share. Other Dow 30 components had decent weeks too. Pharmaceutical giant Merck (MRK) closed at $81.02/share up from last Friday’s close of $80.24/share, Exxon Mobil (XOM) closed at $43.44 up from last Friday’s close of $42.08/share, energy giant Chevron (CVX) closed at $86.80 up from last Friday’s close of $83.94/share,  Caterpillar (CAT) closed at $134.92/share up from last Friday’s close of $132.88/share & Microsoft (MSFT) closed $21.48/share on Friday down 1.79% as it has picked up talks with TikTok again in the face of the White Houses banning.

The S&P 500 closed at 3,351.28 gaining 2.5% and is now up 3.7% YTD. The Nasdaq Composite closed at 11,010.98 establishing a new all-time high moving ahead by 2.5% and now is up 22.7% YTD. The highly weighted FAANG’s helped lead these positive moves as they ended the week up overall as follows: Facebook (FB) closed at $268.44/share, 8.17% Friday ($253.67/share a week ago), Apple (AAPL) closed at $444.45/share, -2.27% on Friday after recently beating expectations and announcing interesting 4-1 forward stock split to boot, ($425.04/share a week ago), Amazon (AMZN) closed at $3,167.46/share, -1.78% Friday ($3,164.68/share a week ago), Netflix (NFLX) closed at $494.73/share, -2.82% Friday, ($488.88/share a week ago), & Alphabet (GOOG) closed at $1,494.49/share, -.37% Friday, ($1,482.96/share a week ago.)

All eleven sectors rose this week with the industrials sector rising a sizable 4.8%, the financials sector jumping 3.3%, & the communications sector adding 3% to lead all sectors. 

Around the financials sector which again rose 3.3% this week, shares of Goldman Sachs (GS) closed trading at $208.27/share up from the $197.96/share, American Express (AXP) closed at $99.16/share up from the $93.32/share last Friday, Visa (V) closed trading at $196.36/share up from the $195.15/share last Friday & shares of Morgan Stanley (MS) closed at $50.35/share up from last Friday’s close of $48.88/share.

The S&P 500 healthcare sector closed at 1,239.10 up a little from the close at 1,228.58 last Friday or up .9%. The Ishares Nasdaq Biotechnology ETF (IBB) moved a higher this week closing at $136.23 vs. last Friday’s close of $134.37. The 52-wk range is $92.15 – $146.53. The NYSE Arca Biotech Index (^BTK) closed at 5,678.03 up from the 5,657.48 level last week. The new 52-week high is 6,166.14. Johnson & Johnson (JNJ) closed at $148.60/share up from $145.76. Novavax (NVAX) also a positive vaccine update on a Phase 1/2 trial. 

Bringing up the tail of all sectors this week, the real estate sector rose .7%, but it did see Rocket Companies Inc., (NYSE: RKT), the parent of the mortgage giant founded by billionaire Dan Gilbert, priced its IPO below the marketed range at $18/share resulting in a shrunken initial public offering that raised $1.8 billion a far cry short of $3.3 billion offering that they were seeking. On a positive note, RKT shares did rise to a high of $26.85/share before closing the week at $24.90 up 15.76% on Friday.

COMMODITY MOVES

Gold prices closed at $2,035/oz. surging up from $1,975/0z. last Friday & silver prices closed at $28.40/oz. up sharply again from $24.50/oz. last Friday. In concert, North American silver and gold producer Hecla Mining Company (HL) ended the week at $6.12/share up from last Friday’s close of $5.52/share while establishing a new 52-week high on Friday of $6.79. This week Hecla reported 24% higher revenues on higher production and prices in Q2 2020. Cantor Fitzgerald Analyst Mike Kozak also updated his coverage moving his Speculative Buy rating to a Buy rating and moving his target price to $7.25/share. North American silver producer First Majestic Silver (AG) closed at $12.97/share down 5.05% on Friday after recently establishing a new 52-week high of $14.57.

Oil prices ended at $41.17/bbl up 2.3% from last Friday’s close of $40.13/bbl. Energy giant Chevron (CVX) moved higher this week to close at $86.80/share ($83.94, last wk) and Exxon (XOM) moved higher closing at $43.44/share ($42.08, last wk.) Occidental Petroleum Corporation (OXY) closed at $15.45 slightly down from $15.74/share last Friday. Midstream player, Enterprise Products Partners (EPD), closed trading at $17.90 up from $17.60/share last Friday and currently sports at an attractive $1.78/share dividend or 9.84%. USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $11.58/share marginally up from $11.54/share last Friday and currently sports a $2.10/share (18.23%) dividend.

MONEY UPDATE

The U.S. Dollar Index weakened again to end the week at 93.41 down from 93.46 last week.

The 2-yr Treasury yield closed up 3 basis points w/w closing at .13%, the 10-yr yield closed up 2 basis points ending at .56 while the 30-yr yield ended at 1.236% up from 1.198% last Friday.    

NEXT WEEK

We will be back to a full week of trading sessions again next week with the Q2 earnings season coming to a close with only 3% of the S&P 500 reporting.

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

KEY MACROECONOMIC DATA

• The U.S.inflation report on Wednesday
• The retail sales report on Friday
• The consumer sentiment report  on Friday

STOCKS IN VIEW

• Shares of Atossa Therapeutics (ATOS) closed at $3.88 on Friday down from $3.78 last Friday. 

  • Interest continues to swell around both their breast cancer treatment and two COVID-19 drug programs.

  • ATOS’ stock has seen positive trading volatility this year and has moved up from $.76/share on significantly increasing trading volume and established a new 52-week high of $5.08/share on August 3rd when Atossa announced that it has received approval from the ethics committee to open a Phase 1 clinical study in Australia using Atossa’s proprietary drug candidate AT-301, to be administered by nasal spray. All necessary approvals have now been obtained and enrollment is expected to begin in the next 30 days.

  • On July 30th, Atossa’s CEO, Dr. Steven Quay, M.D., Ph.D., presented at Tribe Public’s Zoom Webinar Presentation and During this complimentary, 30-minute event, Dr. Quay presented followed by a Q&A session regarding Atossa’s breast cancer development programs and recent progress with its two COVID-19 treatment programs. To view the presentation and to join future complimentary events please visit the Tribe Public LLC website to register: www.tribepublic.com, or send a message to Tribe’s management at research@tribepublic.com to request your seat at future events.

  • Recently, ATOS announced interim findings following 18 months of an Expanded Access (or “compassionate use”) single-patient study of Atossa’s Endoxifen. To date, the patient has not had a recurrence of breast cancer, as assessed by clinical breast examination and mammography; has not had treatment-related changes in periodic laboratory blood tests and general clinical examinations; and the treatment has been well-tolerated, including an absence of typically seen vasomotor symptoms (for example, night sweats and hot flashes). The study results show that treatment with Atossa’s proprietary Endoxifen for 20 days prior to unilateral mastectomy and for 18 months after surgery as an adjuvant did not lead to vasomotor symptoms commonly associated with tamoxifen, an FDA-approved drug frequently prescribed for breast cancer treatment. Endoxifen did not cause other safety and tolerability concerns in this patient. The percentage of cells expressing ER+ or Ki-67 decreased from the initial biopsy to the biopsy on the day of surgery (a 50% reduction in the case of Ki-67 and a 22% decrease in ER+ cells); plasma Endoxifen reached the potential therapeutic level (= 35 nM) by day 6, and steady-state Endoxifen was maintained through day 20 prior to surgery. Atossa plans to publish a manuscript of the case study.

  • Recently, 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 Price Target to $8 from $4″

  • Recently, ATOS reported successful results from in vitro testing of AT-301, Atossa’s proprietary COVID-19 nasal spray drug candidate. The preliminary study results show 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.

  • Dr. Quay 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.

  • We are also hoping that ATOS successfully advances one or both COVID-19 programs by receiving IRB and FDA approval to move into the clinic.

• Shares of INVO Bioscience (INVO) closed at $3.90/share down from $4.45/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

• • Recently, 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 in the back half of 2020  that may result in further adoption in the US clinics and establishing new joint ventures, partners, and distributors throughout the world.

• • Tiny Float – 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 $6.79 at $6.12/share.

• • This week Hecla reported 24% higher revenues on higher production and prices in Q2 2020.

  • Phillips S. Baker, Jr., Hecla’s President and CEO stated, “Despite the pandemic, Hecla had its second-highest quarterly silver production since 2016 which, combined with higher prices, resulted in almost 25% more revenue than a year ago and generated about $27 million of free cash flow. I am extremely proud of our workforce’s adaptability and commitment in this challenging time which positions Hecla well to improve our cash flow generation in this higher silver and gold price environment. Hecla currently produces about a third of all the silver mined in the U.S., almost three times larger than the next primary producer. That number is expected to grow as Lucky Friday ramps up. As the United States’ largest and oldest silver producer with America’s largest silver reserve and resource, Hecla gives investors unique exposure to higher silver prices.”

• • Cantor Fitzgerald Analyst Mike Kozak also updated his coverage moving his Speculative Buy rating to a Buy rating and moving his target price to $7.25/share.

• • If silver continues to drive higher as it has been, not to mention if Gold continues to move higher like it has, then it would seem that Hecla could continue to become a break out stock this year. 

• Shares of Fate Therapeutics (FATE) closed at 31.90/share last Friday and this Friday closed higher at $33.83. 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.

• • On Aug. 5, Fate Reported Second Quarter 2020 Financial Results and Highlights Operational Progress ending the quarter with $533 Million in Cash & Short-term Investments. Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics stated, “Early clinical data from our FT596 program are very encouraging, as we observed a partial response in a heavily-pretreated patient with refractory diffuse large B-cell lymphoma at the first dose level without any reported events of cytokine release syndrome, neurotoxicity or graft-versus-host disease. Additionally, the safety, tolerability, and immunogenicity data across our off-the-shelf NK cell programs continue to suggest that multiple doses of iPSC-derived NK cells can be administered to a patient without matching. We continue to be pleased with our pace of innovation, where the recent clearances of our IND applications by the FDA for FT538, the first-ever CRISPR-edited iPSC-derived cell therapy, and for FT819, the first-ever iPSC-derived CAR T-cell therapy, continue to demonstrate our unique ability to rapidly bring multiplexed engineered, off-the-shelf NK cell and T-cell cancer immunotherapies to patients. In addition, we successfully launched our Janssen collaboration with strong momentum, bringing together Janssen’s proprietary tumor-targeting antigen binders and our industry-leading iPSC product platform to develop novel off-the-shelf CAR NK and CAR T-cell immunotherapies for hematologic malignancies and solid tumors.”

• • 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 $7.94/share up from $7.44/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 $2.855/share down from $2.82/share last Friday.

• • On August 3rd, provided a business update and reported financial results for the second quarter ended June 30, 2020. Stephen T. Isaacs, chairman, president, and chief executive officer of Aduro stated, “The second quarter of 2020 was highlighted by the announcement of our planned merger with Chinook Therapeutics as well as significant progress in our BION-1301 program for IgA nephropathy (IgAN). We recently dosed the first IgAN patient with BION-1301 in Part 3 of our ongoing Phase 1 study and presented positive data from Parts 1 and 2 of this study in healthy volunteers at the 57th ERA-EDTA Virtual Congress. The data 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 continue to enroll patients in our Phase 2 study of ADU-S100 in combination with pembrolizumab in squamous cell carcinoma of the head and neck and make progress on our cGAS-STING antagonist research collaboration with Lilly. We ended the second quarter of 2020 with a cash position of $186.1 million, which we believe will enable us to continue our ongoing STING and APRIL programs in the near-term and also meet our net cash requirements at the close of the merger with Chinook.”

• • 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.

• • 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 $.4401/share down from the $.4884/share last Friday after reaching an intraday high of $.5560/share recently.

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

• • On Aug 5, TRXC announced its operating and financial results for the second quarter of 2020. Anthony Fernando, President, and CEO of TransEnterix stated, “Despite operating in a challenging environment throughout the second quarter, we made significant progress towards our goals for the year, which include increasing system installations, increasing procedure volumes globally, and continuing to gain regulatory approvals for new technologies and expanding indications for use for the Senhance. Leveraging the momentum we generated in the first quarter, we were able to sign two new system leases in the quarter while at the same time maintaining the quality of our pipeline. Additionally, we made progress against our portfolio expansion and clinical validation efforts. While procedure volumes were down in the quarter, we saw a strong rebound from April to June which has continued into July. We continue to believe we are well-positioned to deliver on our strategy and bring transformative technology to surgeons, hospitals, and patients globally.”

• • 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 twice post the recent funding from the $.30 cent range to above the $.50 level and if recent 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:

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