Update=3 12/3…Another whipsaw day if you are in Tech stocks (Docusign?) or small cap growth. Blame profit taking ,omicron or tough taper talk. But large cap biopharma held up well: ABBV ABT BMY PFE UNH VRTX etc., but not the IBB – you have to be a stock picker. BNTX and MRNA were positive. And small cap biotech has no buyers as you can see with ARKG and XBI. Without news or strong momentum small cap bios appear overvalued.
We will update our healthcare portfolio over the weekend. The XLV was flat at $130 level.
Update-2 12/1…cont….. Volatility remains high with all the mixed messaging but omicron variant remains at the forefront. Small caps remain weak IJR IWM. XBI down over 2% to $113 handle. Complete reversal from this am. All indices at session lows! Healthcare winners are ABT AMGN BMY JNJ, PFE VRTX.
Update-2… 11:15a EST Vertex (VRTX) soars 7% to $202 level on technicals and Ph 2 glomerulosclerosis study. Vertex is our top large cap biotech pick from the $180 level.
Update-1 11/29/21…Traders went into a rally mode and put off Omicron variant risk for now. We need to watch data from hospitalization and mortality but with vaccination rates up and new antivirals coming on the market things look better than when delta first hit. Adagio Therapeutics (ADGI) soared over 70% on news of a new antibody that might be effective against new variants such as omicron.
Our top large cap picks were up nicely: REGN 1.83% UNH 2.82% VRTX 3.66%.
Small cap biotechs continue to lag as investors sought proven growth companies.Te IBB was up 15 but the XBI was down 1.53%.
Coronavirus winners: vaccines BNTX MRNA , diagnostics ABT QDEL, therapeutics REGN VIR but MRK and PFE were down.
Tech stocks including Chips were strong.
Covid Is Back Disrupting Markets in Thin Holiday Trading
- Omicron variant from Southern African nations causes great concern.
- Stay-at-home trades roar back with potential travel restrictions but widespread lockdowns unlikely.
- Travel and leisure stocks plummet: airlines and hotels.
Just when you were having an enjoyable four day weekend cruising along the interminable bull market Covid is back disrupting trends.Traders who were working on Black Friday in thin trading could have made huge profits with the early COVID trades like vaccines, BioNtech and Moderna, as well as many Covid diagnostics stocks. Healthcare stocks held up reasonably well .Will there be new respect for biotech and healthcare stocks? IBB is up for the week.
Given the tumult here is a brief scoreboard:
- Bond yields plunged,10 year down 9.9% to 1.482%.
- For the week all down S&P at 4594 2.2%, DJI at 34,8999 2%, NASDAQ at 15,491 3.5%.
- Lagging Russell 2000 stalled again over one month but up 13.73% YTD. at 2246.
- Most indices show a loss of November gains,
- For the week: IBB up 0.79% up 2.25% YTD, XLV down 1.35% up 16.33% YTD XBI down 4.45%, down 17%YTD
Over the next week we will update you on rollicking market trends and potential impacts on the economy just as peak shopping days lie ahead. We will update especially vaccine and Covid diagnostic stocks. Given that healthcare is a defensive group amidst market volatility we assume that large cap biopharma remains an attractive hold. For now metrics don’t matter as much as technicals. It may take a week or two for better data and scientific assessment of how our current vaccines protect from the omicron variant.