Rayno Biobeat #1: Biopharma Leads Healthcare Portfolio 2020-21…Update-1

Update-1 Biotech Momentum Slows but Holding Near Top-XBI at $152.

Most of the market focus has been on COVID vaccines supply and distribution but major earnings calls roll out next week.

• Vaccine stocks rally today as market is hopeful of more product coming: AZN, BNTX, NVAX. In BNTX as a trade.
• Diagnostics stocks strong: GNMK,OSUR,QDEL. Quidal (QDEL) roars back 6.9% on anticipated 2021 blowout of numbers coming in February.
• Teledoc continues its run up 7% to $263 handle.
• XLV flattish for the week up 0.79% to $117;UNH flat on 6% revenue growth, beats confirms guidance.
• QQQ up over 4% this week!

Biopharma Stocks Lead the Way in Healthcare 2020

In October 2020 we developed a model Healthcare Portfolio that was modeled to be diversified with lower risk. Clearly biopharma stocks, both large and small, led the way to outperformance within healthcare. But Q4 2020 was very speculative so we expect that the momentum will ebb in 2021 in a shift to large caps. Small caps have been on a tear with the IWM up 36% in 3. months!  We will take another look at this trend in January after 2020 earnings release.As we noted in our recent J.P.Morgan Healthcare Conference review the COVID vaccine efficacy and rollout drives the economy and the market. We will provide updates on major vaccine and diagnostic milestones.

Today began with a biotech rally in early trading perhaps digesting Company presentations from the J.P.Morgan Conference. Large caps were up even laggards AZN and GILD. MRK was flat to down on Gilead Sciences SCOTUS win on HCV patent. Our small cap winners in early trading: GNMK, TDOC, VIR. Moderna (MRNA) was down 4% on allergic reactions to their vaccine.

• We recommended early in Q4 2020 that you take positions in Gene Therapy stocks but many of them have doubled in a few months.
• To add momentum and beta we recommended more XBI in portfolios.
• We did not include MedTech and Devices in this model but last month we suggested FSMEX , PRHSX and IHE for weighting.See 12/21 Post on MedTech and Biotech funds.
• Macro events rule with “mega stim” package, new Biden administration, weak dollar.
• Earnings kick off this week with United Health tomorrow,