Biotech and Drug Stocks Remain in the Sweet Spot

NAZ Down 0.16% at 3295 at Close

A string of market up days was halted today as retail sales and consumer sentiment gave bearish indicators.Commodity stocks were also weak-energy down 1.2%, materials down 1.7%– and there is a “whiff of deflation” in the air according to Art Cashin of UBS. Gold was crushed on news that Cyprus gold was liquidated by the EMU.

Healthcare overall was flat but many drug and biotech stocks rolled on. Biopharma winners were Amgen (AMGN), Biogen Idec (BIIB) and Regeneron (REGN) all large caps up an astonishing 30%++ YTD. Small and mid-cap biotechs were mixed but within the Rayno Life Science focus list we have losers longs Abaxis (ABAX) off 5.5% , Immunogen (IMGN) off 9.6% but Infinity (INFI) our short play is off 5.5%.Other notable winners were Genomic Health(GHDX), Neogen(NEOG), and Viropharma(VPHM).

Despite all the pundit bearish chatter, warnings about a market correction and the perils of cheap money, the market remains the only game in town. Japan is printing money and seeking outside investments, the European crisis is warming up again, precious metals are crushed and do not outperform even in a crisis and low yield bonds have duration risk. But as you can see from the chart the 10 Year TSY is down to a yield of 1.72 and Pimco has been loading up so what is with that?

And within the equity market life science stocks catapult  to new highs even on a day when economic indicators are weak.

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