Update -2 … June 25… IBB off all time high of 379.97

  • SCOTUS opinion in favor of ACA (ObamaCare) is favorable to hospital stocks and positive for HC sector overall as we have assumed since 2010. The XLV Health Care Select SPDR ETF is up 11.25% YTD and 162.5% over five years.
  • The bull market in biotech stocks and large cap drug stocks is supported by higher valuations of product pipelines. This is a secular change from the past as investors seek growth stories in a low interest rate environment.

XLV Health Care Select Sector SPDR ETF daily Stock Chart


BIO Breakout Continues

Biotech stocks continued their rally of last week with all major ETFs leading the way. The small cap more speculative XBI is up 2.66% and the FBT is up 1.66% 2 hours before the close. MOmentum players are feasting even on Phase 1 data and R&D collaborations see ( BLUE KITE deal on HPV). Large caps are up over 1% with Biogen (BIIB) the leader.

Immuno-oncology was the hot breakthrough sector at BIO 2015 and many of these stocks lead today: AGIO, CLDX, ARRY, EPZM, and IMGN. Free money from the FED should keep biotech institutional players on the buy side.

Healthcare stocks lead today along with telecom. The XLV is up 0.85%.


IBB  iShares Nasdaq Biotechnology ETF daily Stock Chart

Investors like what they see and hear at BIO 2015

After several weeks of consolidation biotech stocks took off along with NASDAQ to new all time highs.The NASDAQ Composite took out its all-time intraday high and closed at 5132.95 up 1.34%. The FED once again provided the backdrop of low interest rates to spur buying of equities. All biotech sector indicators broke through in a broad rally with large caps picking up momentum:

  • The large cap weighted ETF iShares Biotechnology Biotech Index (IBB) hit an all-time high of 377.88 up 3% for the day and 24.57% YTD. The market cap is now $9B.
  • Other major ETFs followed to new highs (XBI) up 34.77% YTD and (FBT) to $124.74 up 22.27% YTD.
  • The healthcare sector led the market up 1.42% for the day.
  • Rayno Large Cap Portfolio picks were strong -AMGN,BIIB,REGN etc.
  • Rayno Mid-Cap stocks pick up from post-ASCO doldrums-CLVS,SGEN,VRTX.
  • Selected “immuno-oncology” and other speculative small cap stocks regained momentum-CLDX,IMGN,SUPN,ZIOP etc.

We will provide more updates on BIO 2015 and other news next week. Among the themes that gathered interest were: digital health,gene editing, gene therapy,immuno-oncology,orphan drugs and personalized medicine.

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