Crude Trade Roils Markets-But Biotech Is Still A Safe Haven

Second Worst Week of the Year-Late Day Trading Hit By Selling

As the market becomes more volatile we should look at how the energy trade is affecting other asset classes. Certainly materials and industrials are being hit over the past month. With respect to healthcare and life science we are only about 2.25% off highs only five days ago. Biotech is relatively calm today off about 0.3% then getting hit hard at 2:30p EST. The XBI was actually up 0.6% today before selling off in late trading. Healthcare and technology stocks are holding up under the current sell-off so appear to be uncorrelated to the “currency wars” and energy trade. If global growth continues to look weak through Q1 2015 where will the new money go?

NASDAQ 4653  IBB $306, XLV $68.80


Biotech Stocks Sell-Off After Hitting New Highs Monday

NASDAQ at 4735 off 0.67%

Healthcare and life science stocks have been a safe haven from recent market headwinds but today risk is off across the board. Crude is down over 5% to $61 and this has raised concerns about global growth affecting other asset classes like financials and industrials.The Dow and S&P are having another down day off about 0.8%. The healthcare space is off about 0.6% today with the bellwether XLV off only 0.5% but stable over the past five days after hitting new highs Monday up 28% YTD. Biotech stocks are being nipped today with the FBT down 1.35% but up almost 50% YTD.

Stay the course with a portfolio of large and mid cap stocks or a biotech ETF like FBT.

Most Rayno Life Science picks are in the red today but many speculative small cap stocks are still catching bids as can be seen by these oncology stocks:

In October we attend the BIO Investor Forum and one of the hot sessions was “T-Cell Therapies-Prioritizing Cancer Targets”. We mentioned four companies that have promising early stage therapies for arming the body’s own T-cells to fight cancer. Aggressive traders who bought all four stocks in late October would have reaped big profits over 1 month: bluebird bio (BLUE) up 124%,  Globimmune (GBIM) up 25%, Kite Pharma (KITE) up 32.4% and ZIOPharm Oncology (ZIOP) up 19.2%.

Coming later this week: Rayno Portfolio Review and update from October 31. NB our mid-cap motif is now up 28.9% after Cubist (CBST)  acquisition by Merck (MRK)


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