“Retail Rescue” Vista Partners Daily Market Recap 8/15/19
Buy! Buy! Buy!… This is at least what the American consumer was stating and also moving forward with last month. Today these actions came to the market’s rescue as the Retail Report for July surfaced confirming a .7% increase month-over-month which was more than double estimates. The markets at the end of the day ended mixed, but the significant selling that we experienced yesterday did not continue today. The markets seemed to take a pause in order to weigh this increase against the recessionary indicator it digested yesterday when the yield curve inverted temporarily. The 2-yr Treasury yield finished lower at 1.49% down .09, the 10-yr yield finished lower at 1.53% down .05, & the 30-yr yield fell to 1.98% down .05. Yields ended the day in line but again lower, however, the U.S. Dollar Index remained strong as it increased by 98.10 up .1%.
The Dow, which led all markets down yesterday crashing 3.05%, rebounded the most today ending at 25,579.39 up .39% adding 99.97 points. The S&P 500 gained 7 points or .25% to end the session at 2,847.60. The tech-heavy Nasdaq had another down day as it closed at 7,766.62 down .09% or 7.32 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index, closed at 1,461.65 subtracting 5.87 points or .4% today.
Volatility swung again today & volatility bets closed lower. The CBOE Volatility Index (VIX) closed at $21.18/share down 4.16% or $.92/share and traded between $20.78 and $24.10. The 2x leveraged ETF TVIX closed at $22.16/share down 4.44% or $1.03/share and traded between $21.72 and $24.11 today.
Oil prices fell again today down 1.4% closing at $54.38/bb. Dow 30 energy participants Chevron (CVX) moved lower by .67% closing at $116.95/share & Exxon (XOM) closed lower by .59% closing at $67.25/share. Occidental Petroleum (OXY) closed at $43.96/share up .59% after their recent sale of $13 billion of debt to fund their Anadarko Purchase. The energy sector ended down .5%.
Metals & Mining
Gold prices closed at $1521.605/oz. Silver closed at $17.26/oz down .03 on the day. First Majestic Silver (AG) closed at $10.26/share up .79%. Hecla Mining Company (HL) closed at $1.46/share up 1.47% after reporting results last week & offering the following highlights:
- Silver production of 3.0 million ounces and gold production of 60,768 ounces.
- Increasing annual silver production estimate Company-wide to 11.7 million ounces due to higher grades at Greens Creek.
- Total annual gold production estimate Company-wide unchanged at 274,000 ounces.
- Sales of $134.2 million.
- Adjusted net loss applicable to common shareholders of $36.4 million, or $0.07 per share.1
- Adjusted EBITDA of $22.9 million and net debt/adjusted EBITDA (last 12 months) of 3.9x. 2,3
- Cash and cash equivalents of $9 million, with a draw on the revolving line of credit of $52 million, at June 30, 2019.
- Amended revolving credit agreement to allow higher net debt/EBITDA ratios through the second quarter of 2020.
- Locked in minimum average prices of $1,400 per gold ounce and $15.13 per silver ounce by acquiring put options through the first quarter of 2020, while allowing full participation in potentially higher prices.
The S&P 500 healthcare sector closed at 1033.52 up .35%. UnitedHealth (UNH) closed up .43% closing at $244.25/share, Walgreens Boots Alliance (WBA) closed at $49.29/share off 2.22% & Cigna (CI) lost .3% closing at $159.70/share post their recent Q2 earnings beat.
INVO Bioscience, Inc. (IVOB) ended the day at $.325/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.
Yesterday, INVO Bioscience (IVOB) announced that revenues for the quarter totaled $658,638 compared to $110,210 in the second quarter of 2018, an increase of 498%. Revenue growth was driven primarily by increased product sales in the U.S. as shipments to Ferring were above expectations outlined in May 2019 as they began to increase their marketing activities. On January 14, 2019, the Company closed an exclusive U.S. licensing agreement with Ferring International Center S.A. the parent Company of Ferring Pharmaceuticals U.S. to commercialize the INVOcell™ system for use in the treatment of infertility. As part of the U.S. licensing agreement, the Company received a $5 million one-time milestone payment, with the ability to receive an additional $3 million upon obtaining a label enhancement from the U.S. Food and Drug Administration. Read Complete Story.
The Ishares Nasdaq Biotechnology ETF (IBB) lost .34% closing at $102.68. 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 at $2.14/share intraday high of $2.47. The average daily trading volume is 436,332 shares per day and reported Q2 financial results & company update today. Recently, Atossa also announced that recently the online launch of company CEO Steven Quay’s Tedx UofW Talk, “How to Be Smart When You’re Dense: Preventing Breast Cancer by 2030.” The talk has been posted online at https://www.youtube.com/watch?v=hK4PlbYE_5M&list=PLsRNoUx8w3rNCo4uCVXiNDFZLiKrIOQ1J&index=5 and can also be accessed via the company’s website at www.atossagenetics.com. In the Tedx UofW talk, Steven Quay, M.D., Ph.D., Atossa’s Chief Executive Officer outlines the journey of Atossa Genetics in identifying improved ways to identify women at high risk of breast cancer, using mammography to identify dense breast tissue. Dr. Quay also details his experience with triumph, failure, and perseverance while trying to prevent one of the world’s most common diseases: breast cancer. He emphasizes the need for unshaken efforts to solve such complex problems and ways that he and his team are doing so in breast cancer research. Also, recently Atossa is developing a new proprietary modified-release oral tablet form of its Endoxifen, which is the form of the drug that the company intends for future clinical studies and commercialization. This is the next generation of oral Endoxifen following the successful clinical studies of the capsule form of the company’s oral Endoxifen. A patent application covering the new table has also been filed with the U.S. Patent and Trademark Office. As part of the development of this new oral tablet, Atossa has commenced a Phase 1 study in Australia to ascertain the pharmacokinetics of the tablet. The study is randomized, double-blinded and placebo-controlled with both single and multiple-doses in 2 groups with a total of 24 healthy female volunteers who will be dosed for 14 days. Atossa’s oral Endoxifen capsule, which has been used in previous clinical studies, will serve as the comparator. The first group of the study has now been enrolled and dosed. Steven C. Quay, Ph.D., M.D., CEO, and president of Atossa, commented: “We are excited to take this next step in our oral Endoxifen product development. Based on the abundance of information from our previous clinical studies, we strongly believe in the potential efficacy of oral dosing and intend for this modified-release tablet to be the commercial form of our oral Endoxifen. The goal of the modified-release aspect of the drug is to create more even uptake of the drug which we believe may reduce side effects and improve efficacy. This new study builds on the success of our Phase 1 studies of the oral capsule and topical forms of our Endoxifen, our recent successful Phase 2 study of topical Endoxifen, which demonstrated significant efficacy in reducing breast density, and our single-patient compassionate use study of oral Endoxifen. Following the completion of this Phase 1 trial, we will continue to use this proprietary modified-release formulation for future clinical studies — including a Phase 2 trial that we have already indicated is in development — and ultimately regulatory approval. We look forward to completing the study in the next quarter.”
San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, bounced back to $17.59/share down 21.62% on 443,930 shares of trading after recently establishing a new all-time intraday high of $22.82! The 52-week range is $10.69 – $22.82. Today, FATE announced that the U.S. Patent and Trademark Office has issued U.S. Patent No. 10,370,452 covering compositions and uses of effector T cells expressing a chimeric antigen receptor (CAR), where such T cells are derived from a pluripotent stem cell including an induced pluripotent stem cell (iPSC). The foundational patent, which expires in 2034, is owned by Memorial Sloan Kettering Cancer Center (MSK) and is licensed exclusively to Fate Therapeutics for all human therapeutic uses. “The breadth of this newly-issued patent, which is not restricted by the signaling domain of the CAR construct nor by the antigen to which the CAR targets and binds, covers off-the-shelf, iPSC-derived CAR T cell therapy for the treatment of cancer, infectious disease and immune disorders,” said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. “This patent is a testament to the prescient work of MSK’s Dr. Michel Sadelain in combining CAR and iPSC technologies in an effort to overcome the significant challenges that limit the widespread adoption of patient- and donor-sourced engineered T-cell immunotherapy.” Cantor Fitzgerald initiated coverage on FATE on July 22nd with an overweight rating. Oppenheimer initiated coverage on Friday, July 12th with an Outperform Rating. Guggenheim Securities initiated coverage on FATE recently with a “Buy Rating” and a $25/share price target. Mizuho initiated coverage with a price target of $27/share within the last 30 days
Walmart (WMT) closed at $112.69/share as it stole the show today as it offered and earnings beat earnings results and positive guidance.
Disney (DIS) closed at $133.41 up .42% after it was confirmed that global ticket sales for “Toy Story 4” moved higher than $1 billion and breaking a record for most $1 billion movies in a year that was set in 2016. This year they also have “Avengers: Endgame”, The Lion King”, Captain Marvel” and “Aladdin” all confirming sales from $2.8 billion to $1billion.
Last Friday, the index for final demand was confirmed to have an increased .2% m-o-m in July. The index for final demand, excluding food and energy, was lower by 1% m-o-m. Core PPI was up 2.1% y-o-y but inflation stays in check.
On Monday, the Treasury Budget for July exhibited a deficit of $119.70 billion & the fiscal year-to-date deficit was confirmed at $866.81 billion. The budget deficit over the last 12 months was $961.8 billion.
On Tuesday, the Total CPI checked in with an increase of 0.3% m-o-m in July. Core CPI, which excludes food and energy, rose by .3%. Total CPI was up 1.8% y-o-y & core CPI was up 2.2% y-o-y. The NFIB Small Business Optimism Index for July increased to 104.7.
On Wednesday, import prices increased .2% m-o-m in July & all import prices were down 1.8% y-o-y. Export prices were up .2% m-o-m in July & all export prices were down .9% y-o-y. The weekly MBA Mortgage Applications Index moved significantly higher by 21.7%.
Today, we received the retail sales report and it confirmed a .7% month-over-month move higher in July more than doubling estimates. Initial claims for the week ending August 10 increased by 9,000 to 220,000. Continuing claims for the week ending August 3 moved up to 1.726 million. Nonfarm business sector productivity report confirmed an increase of 2.3% in Q2. Unit labor costs rose 2.4% in Q2. Industrial production was confirmed to have gone down by .2% in July. The total industry capacity utilization rate lowered to 77.5%. The year-o-year growth rate is now .5%. The Empire State Manufacturing Survey for August rose to 4.8. The Philadelphia Fed Index for August came in at 16.8. The NAHB Housing Market Index moved higher to 66.
Day or Short Term Trading
We exited VIPS today at $7.10/share after buying it in the low $6/share range yesterday. Exited VRAY at $3.87/share today after buying yesterday at $3.945.
Bought BE at $5.06/share and $4.99/share and seeking a swing back up after its recent beat down. Company has a 52-week high of $38/share.
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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