Equities:  The Only Game in Town With Rates Under 3%?

October, normally a month to be cautious on the market, proved that trends can be misleading even in the midst of turbulent times in Washington.

DOW Up 2.5%, S&P Up 3.5%, NASDAQ Up 2.5%.

Healthcare stocks followed suit with the broadly diversified NYSE  SPDR ETV (XLV) up 3%. The assumption has been with more patients being enrolled under the Affordable Care Act, healthcare stocks will benefit. Large cap mutual funds are overweight healthcare stocks. The XPH SPYDER S&P Pharmaceutical ETF is up 40% YTD helped by biotechnology holdings.

Biotechnology stocks are market leaders up over 55% YTD , but lagged in October after a vicious sell-off in early October. The most liquid ETFs performed as follows in October:  IBB ($205) down 4%, XBI  ($119) down 9.7%, FBT($64.25) down 2.9%, and PBE ($35.33) down slightly. Biopharmaceutical stocks are flat to down today with small to mid-cap stocks generally weak.We remain cautious on smaller cap biopharma stocks. Select diagnostic stocks remain strong due to innovations in sequencing and M&A.

Rayno Life Science Top Winners in October

Illumina (ILMN $95) up 17.4%

Gilead (GILD $70.5) up 12%

Alkermes (ALKS $35.50) up 7.9%

Alere (ALR $33.42) up 5.96%

ThermoFisher (TMO $97.8) up 5.25%

Alexion (ALXN $123) up 5%

Amgen (AMGN $118) up 3.1%

The Top Rated Fidelity Biotechnology Fund FBIOX ($170) was down 3%.

Among the Rayno Life Science Portfolio big losers are : Abaxis (ABAX), Array (ARRY), Pharmacyclics (PCYC), Response Genetics (RGDX) and Sequenom (SQNM).

A complete review of all diagnostic focus stocks will come next week.


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