“Q3 Cannon” Vista Partners Daily Market Recap 7/1/19

By John Heerdink LinkedIn

The markets shot out like a cannon this morning but tailed off over the course of the day to finish higher on this first day of July and the first day of Q3 2019. The markets initial reaction seemed to be fueled by positive news that a trade truce materialized between the US & China over the weekend at the G20 Summit. President Trump stated that he would hold off from imposing the $300 billion additional tariffs on Chinese goods and reversed measures that had completely blacklisted the Chinese technology/telecommunications concern Huawei which is now allowing companies to sell to them as long the parts sold do not “involve” parts that could negatively affect or threaten national security. Apparently, China also committed to buying a “tremendous” amount of US goods according to President Trump. These moves drove the technology sector higher today and specifically the chip makers. i.e.  Intel (INTC) which ended up .38% closing at $48.05/share. Memory chip maker Micron (MU) jumped 3.94% closing at $40.11. Big tech stocks faired well too Amazon (AMZN) gained 1.51% closing at 1,922.19,  Alphabet (GOOG) moved higher by 1.58% closing at $1,097.95, Apple (AAPL) jumped 1.83% closing at $201.55, Facebook (FB) finished flat closing at $193.00.Shares of Microsoft (MSFT) gained .1.28% closing at $135.68.

The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index added 3.09 points closing at 1,569.66 up .20%.  The S&P 500 bumped up 22.57 points and closed at 2,964.33 up .77% on the day. The Dow added 117.47 points closing up .44% ending at 26, 717.43. The tech-heavy Nasdaq closed at 8,091.16 up 1.06% up 84.92 points.

Volatility bets closed strongly lower again today & within a relatively tight trading range. The CBOE Volatility Index (VIX) closed lower at $14.06 off 6.76% or $1.02/share. It traded between $13.80- $14.64. The 2x leverage ETF TVIX also closed significantly lower at $16.91 down 10.34% and traded between $16.82 and $17.53 today.

The US Dollar Index moved .7%  higher today ending the day at 96.82.

The 2-yr treasury yield ended flat at 1.79%  (+.05) & the 10-year Treasury note closed up at 2.03% (+.03.)

OPEC extended oil supply cuts today to further support oil prices in the face of increasing US production and a global economy that is dragging.  Oil prices ticked lower at $58.60/bbl down .83%.  Dow 30 energy participants Chevron (CVX) moved higher by .32% closing at $124.84 & Exxon (XOM) closed ticked lower by .09% closing at $76.56.

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $24.16 jumping another whopping 5.23% after achieving another new 52-wk high of $24.36. The 52-wk range is $8.60 – $24.36. OZM sports a  4.36% cash dividend.

Los Angeles-based Colony Capital (CLNY) a leading global investment management firm with assets under management of $43 billion closed at $5.01 up .20%. CLNY pays an 8.76% cash dividend.

Nike (NKE) closed at $85.41 up +1.74% after reporting that they missed analyst earnings estimates last week but maintained full-year guidance.

The health care sector moved higher again today & spiking towards the end of the day. The S&P 500 healthcare sector closed at 1078.60 up .57%.

Change Healthcare Inc., a leading independent healthcare technology platform, announced Wednesday after the close that they had priced their initial public offering of 42,857,142 shares of its common stock at a price to the public of $13.00 per share and its concurrent offering of 5,000,000 of its 6.00% tangible equity units (“Units”), with a stated amount of $50. The offerings are expected to close on July 1, 2019, subject to customary closing conditions. The completion of the Units offering is conditioned upon the completion of the common stock offering, but the completion of the common stock offering is not conditioned upon the completion of the Units offering. Change has granted the underwriters in the common stock offering a 30-day option to purchase up to an additional 6,428,571 shares of common stock. Change has granted the underwriters in the Units offering an option to purchase, within a 13-day period beginning on, and including, the date of the initial issuance of the Units, up to an additional 750,000 Units. The shares and the Units began trading on the Nasdaq Global Select Market today, under the symbols “CHNG” and “CHNGU,” respectively. CHNG shares rose to a high of $15.19 and closed at $15/share up 15.38% in its first day of trading on Thursday but today came back to earth again today closing at $14.40 dropping 2.67%.

Community Health Systems, Inc. (CYH) one of the largest publicly traded hospital companies in the US hit an intraday high of $2.74/share & a low of $2.63 today and closed the day at $2.69 up .75% on 1.27 million shares of trading. On June 27 CYH announced that its subsidiaries signed a definitive agreement to sell 92-bed Bluefield Regional Medical Center in Bluefield, West Virginia, and its associated ancillary healthcare operations to subsidiaries of Princeton Community Hospital. The hospital included in this transaction is among the additional planned divestitures discussed on the Company’s Q1 2019 earnings call. Also, note there has been more insider buying occurred recently as Michael Dinkins bought shares at $3.168/share on 5/28/19 according to the latest Form 4 filed at SEC.gov. Michael Dinkins has served on our Board of Directors since December 2017. Mr. Dinkins has served as president and chief executive officer of Dinkins Financial, a consulting firm that helps small businesses gain access to capital, since October 2017. See our story more details: INSIDER BUYING ALERT: Community Health Systems, Inc. (CYH) Director Michael Dinkins.

The Ishares Nasdaq Biotechnology ETF (IBB) moved higher by .58% closing at $109.73. This sector has been on a more than healthy run over the last 30 days. The 52-wk range is $89.01 – 122.97.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed today at $2.52. The average daily trading volume is 849,061 shares per day.  Atossa announced last week that a preliminary analysis from its recently completed Phase 2 study of the company’s proprietary 20mg daily topical Z Endoxifen (“Endoxifen”) showed a significant and rapid reduction in mammographic breast density (MBD). Studies by others using tamoxifen have demonstrated that density reduction induced by tamoxifen is associated with a significant reduction in breast cancer incidence. See complete story.

Bedford, Massachusetts-based Stoke Therapeutics is a biotechnology company pioneering a new way to treat the underlying cause of severe genetic diseases by precisely upregulating protein expression. Recently Stoke Therapeutics announced the pricing of its initial public offering (IPO) of 7,891,110 shares of its common stock at a price to the public of $18.00 per share. The shares are now trading on The Nasdaq Global Select Market as of June 19, 20,19 under the symbol “STOK.” Stoke’s stock traded as high as $31.76 Friday a new all-time high prior to closing trading at $28.87/share down 1.03% today. See complete story.  

INVO Bioscience, Inc. (IVOB) ended the day at $.3935/share as daily trading volume continues to rise in concert with their announcing progress after their exclusive U.S. partnership with Ferring Pharmaceuticals, a leader in the reproductive health industry was announced in Q1-2019. Ferring has committed to providing the necessary sales and marketing resources to more fully develop the market in the United States. There are countless couples not able to receive reproductive treatments today, and Ferring can be instrumental in addressing the unmet needs of this cohort. Ferring has the industry experience, relationships and the marketing capabilities to successfully embed the INVOcell in clinics throughout the country.  IVOB is a medical device company, headquartered in Sarasota, FL focused on creating simplified, lower cost treatment options for patients diagnosed with infertility. The company’s lead product, the INVOcell, is a novel medical device used in infertility treatment that is FDA cleared and that enables egg fertilization and early embryo development in the woman’s vaginal cavity. IVOB also announced last week news of their recent appointment of Pressly Ahammed as the new Director of International Business Development and he will be responsible for the Company’s international distribution channels in Europe, Middle East, Africa & parts of Asia. Ahammed joined IVOB from Cooper Surgical where he held a similar position. See complete story.

Pfizer (PFE) closed lower at $43.77  up 1.04% after the recent announcement regarding their acquisition of Array BioPharma (ARRY) for ~$11.4 billion or $48/share in cash.  See complete story.

The pharmaceutical giant and Dow component Merck & Co, Inc. (MRK) that recently announced the acquisition of Tilos Therapeutics for a consideration of up to $773 million closed at $84.75 up by 1.07%.

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed at $21.26/share down 4.73% on 735,661 shares of trading after establishing a new all-time intraday high of $21.32 . The 52-week range is $8.64 – $21.32. Guggenheim Securities initiated coverage on FATE last week with a “Buy Rating” and a $25/share price target. Scott Wolcho, President and CEO of Fate Therapeutics presented at the Jefferies 2019 HealthcareConferencee in New York yesterday. Roth Capital initiated coverage on FATE with a Neutral rating and a $20 price target last Friday, June 7th. Mizuho initiated coverage with a price target of $27/share this week.

Boston-based Pieris Pharmaceuticals (PIRS) closed at $4.63 down .64% on 298,159 shares of trading. The stock traded between $4.50 & $4.7484 today and the 52-wk range is $2.39 – $6.55.

Xeris Pharmacueticals, Inc. (XERS) closed higher at $11.59 up 1.31%. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations.

Biohaven Pharmaceutical Holding Company Ltd., (BHVN), a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting migraine and neurological diseases, including rare disorders, announced recently the pricing of its underwritten public offering of 6,976,745 of its common shares at a price of $43.00/share. The gross proceeds of the offering are expected to be $300 million. Shares of BHVN closed at $43.26 today down 1.21% after hitting an intraday high of $45/share. The 52-wk range $29.17 t0 $67.86. Today they announced that the first patient has been enrolled in a Phase 2 clinical trial assessing the efficacy and safety of rimegepant in treatment-refractory trigeminal neuralgia.

On the recent IPO front, Zoom Video Communications (ZM) moved lower by 2.17% closing at $86.86 & Uber Technologies (UBER), the ride-sharing company closed lower at $44.27/share & still below its recent IPO price of $45 but managed to establish a new all-time intraday high of $47.08. Plant-based burger maker Beyond Meat (BYND) closed at $152.58 lower by 5.04%. Their meat is made of four main ingredients: water, pea protein isolate, canola oil & refined coconut oil and is meant to taste like “meat.  Slack Technologies (WORK) which jumped into the public markets with their IPO last week flying up 48.5% from their offering price of $26/share closed today at $36.55 down 2.53%. Slack is a provider of a cloud-based workplace messaging app and went public via a direct listing avoiding paying fees to the relevant banks.

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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