Stimulus Kept Hovering Over The Markets This Week

It was week in the markets that seemed to hang on every report about the stimulus negotiations of Pelosi, Mnuchin, and Co. While this was going on the markets yoyo’d daily throughout the week staying essentially in check & ending about where it started. It would also seem that we may be in for more of the same shenanigans and market action next week as the upcoming Nov. 4 presidential elections are hovering and edging ever so much closer and the likelihood of a stimulus package being agreed to prior to the election is very slim.

On the macroeconomic side of the coin the schedule produced a mix of mostly improving 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.

MARKET RESULTS

The  communication services sector ended up 2.1%, the utilities sector need up 1.2%, the financials sector ended up 1%, & the energy sector ended up .5% to lead the week.

The Russell 2000 led all indices as it closed at 1,640.50 adding a marginal gain of .4% week over week, and remains down 1.7% YTD. 

The tech-heavy Nasdaq Composite dropped 1.1% week-over-week to close at 11,548.28 and remains up 28.7% YTD.

The highly weighted FAANG’s ended as follows:  Facebook (FB) closed at $284.79/share, 2.4% Friday ($265.93/share a week ago), Apple (AAPL) closed down .61% on Friday at $115.04/share and down from $119.02/share a week ago. Amazon (AMZN) closed at $3,204.40/share, +.88% Friday ($3,272.71/share a week ago), Netflix (NFLX) closed at $488.28/share, +.63% Friday, ($530.79/share a week ago) after disappoint the markets regrind subscriber growth, & Alphabet (GOOG) closed at $1,641/share, +1.59% Friday, ($1,573.01/share a week ago.)

The Dow ended the week at 28,335.57 down .9% and is now down .7% YTD. Around the Dow 30, Johnson & Johnson (JNJ) closed at $145.24/share down again from last week’s close of $148.10. 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 $48.20/share down 10.6% Friday after disappointing on earnings & warning about operating margin next quarter.

Shares of Deere (DE) slowed down this week closing at $239.53/share down from last week’s close of $240.06/share after a nearly 30 point run up over the previous two weeks. Pharmaceutical giant Merck (MRK) closed at $79.83/share closed flat from last Friday’s close of $79.83/share, energy giant Chevron (CVX) closed at $72.57 slightly down from last Friday’s close of $72.89/share, Caterpillar (CAT) closed at $168.59/share slightly down from last Friday’s close of $168.75/share while Walmart (WMT) closed at $143.85/share down from last Friday’s close of $144.85/share. Shares of Microsoft (MSFT) closed at $216.23/share down from last Friday’s close of $218.66/share, Salesforce (CRM) closed at $250.52 down again from $258.55 last Friday & Boeing (BA) closed $167.36 almost in line with last Friday’s close of $167.35/share. 

The financials sector rose 1% this week as the 10 year treasury moved 10 points higher. Around the horn we saw the shares of Goldman Sachs (GS) close trading at $205.04/share down from last Friday’s close of $206.21/share, American Express (AXP) closed at $100.98/share down from the $104.91/share close last Friday, Visa (V) closed trading at $198.01/share lower from the $200.26/share last Friday & shares of Morgan Stanley (MS) closed at $51.87/share ticking up a whopping 2 cents  from last Friday’s close of $51.85/share. JPMorgan Chase (JPM) closed at $103.81 up from $101.51/share last Friday & Citigroup (C) $43.95/share up slightly from $43.19/share last week. PayPal Holdings (PYPL) closed at $303.04/share after announcing they would be handling cryptocurrency this week and Square (SQ) closed at $176.77/share. 

The S&P 500 closed at 3,465.39 losing .5% wk/wk and is up 7.3% YTD. 

Elon Musk’s Tesla (TSLA) closed at $420.63/share down from $439.67/share last Friday.  Chinese EV company Nio Limited (NIO) called down a bit this week, after hitting an all-time new high of $29.40 last week, closing at $27.16/share down .8% on Friday.

Gilead (GILD) closed at $60.79/share up .2% on Friday after announcing that Remdesivir had been formally approved by the FDA for COVID-19 treatment, but many doctors are questioning its limits/benefits.

COMMODITY MOVES

Gold prices closed at $1,902/oz. up from $1,899/0z. last Friday & silver prices closed at $24.70/oz. up from $24.26/oz. last Friday. North American silver and gold producer Hecla Mining Company (HL) ended the week at $5.15/share down from last Friday’s close of $5.33/share after recently establishing a new 52-week high of $6.79. Recently, Hecla announced their production results and cash position at the end of Q3. Phillips S. Baker, Jr., President and CEO go Hecla stated, “Hecla’s strong operating performance was from increasing silver production at Greens Creek and Lucky Friday and managing COVID-19 at all the mines. This operating performance combined with higher silver prices allowed us to close the quarter with $97 million of cash and cash equivalents while fully repaying our revolving credit facility. Given our free cash flow generation, we expect to spend about $5 million more in exploration, and based on our realized silver price for the quarter being above $25, we expect the silver-linked dividend to be triggered.” President and CEO Phillips S. Baker, Jr.also recently delivered a presentation titled“Hecla – A Uniquely Scarce Investment”at the Tribe Youtube Channel.

Oil prices ended at $40.85/bbl up .5%. Midstream player, Enterprise Products Partners (EPD), closed trading at $17.21/share up from $17.01/share last Friday and currently sports at an attractive $1.78/share dividend or 10.81%. USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $10.72/share basically even from the $10.73/share close last Friday and currently sports a juicy $2.10/share (19%) dividend.

MONEY UPDATE

The U.S. Dollar Index weakened to end the week at 92.72 down 1.01% from 93.71 last week.

The 2-yr Treasury yield closed up 1 basis point w/w closing at .16%, the 10-yr yield rose 10 basis points ending at .84% while the 30-yr yield ended at 1.643% up from 1.532% last Friday.

NEXT WEEK

We will be back with another full week of trading as we rush forward to the elections.

NEXT WEEK’S KEY MACROECONOMIC DATA

Nearly 40% of the S&P 500 have reported earnings now but that leaves still 60% to hit the tape.

The macroeconomic schedule will proved the consumer confidence report on Tuesday, the third-quarter GDP growth report on Wednesday, & the personal income and spending reports on Friday.

STOCKS IN VIEW NEXT WEEK

• Shares of Atossa Therapeutics (ATOS) closed at $1.83/share slightly down from $2.31 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. 
  • Ascendiant Capital Markets’ Analyst Edward Woo, CFA initiated coverage recently with a BUY Rating and a $7.00 Target.

  • Dr. Steven Quay MD, Ph.D., Atossa’s founder, and CEO, recently published the following book “Stay Safe: A Physician’s Guide to Survive The Coronavirus.”  You may order it here.

• Shares of INVO Bioscience (INVO) closed at $3.99/share down from the $4.10/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 $5.15 down from $5.30/share last Friday.

• • Recently, Hecla announced their production results and cash position at the end of Q3 this week. Phillips S. Baker, Jr., President and CEO go Hecla stated, “Hecla’s strong operating performance was from increasing silver production at Greens Creek and Lucky Friday and managing COVID-19 at all the mines. This operating performance combined with higher silver prices allowed us to close the quarter with $97 million of cash and cash equivalents while fully repaying our revolving credit facility. Given our free cash flow generation, we expect to spend about $5 million more in exploration, and based on our realized silver price for the quarter being above $25, we expect the silver-linked dividend to be triggered.”

• • 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 available to view at the Tribe Youtube Channel.

• Shares of Fate Therapeutics (FATE) closed at $48.36/share slightly down from last Friday’s close of  $48.64.
  
  • 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 $8.82/share up from $8.40/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. will be presenting an an upcoming October 28th Tribe Public Webinar Event titled “Manufacturing Heat Seeking Missiles Against Misbehaving Genes.” You may register for FREE at NeuBase.TribePublic.com.

• • This week, 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 $15.03/share down from the 16.27/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. 

• Rumors are swirling around possibly interest from Softbank in Jumia Technologies AG (JMIA) which continues to find higher ground closing at $17.87/share up 8.37% on Friday.

• Buyout rumors are surfacing around Sonos (SNOS) which recently lost sponsorship from Apple (AAPL) which is thought to be entering the market with their own products.

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