Final Close 5/26:
Dow up 1.39% at 33072, S&P 500 up 1.66% at 3974, , Nasdaq up 1.24% at13138 , Russell 2000 down 2.89%. IBB stable at close.
Update-3 March 26. 3p EDT Another day of selling for biotech; I’ll look for trades over the weekend. IBB down 0.98 to $147.21, XBI down 3.21% to $130.88. Move to large cap dividends shows value tilt. XLV up over 1% to $116.23.
- Red screen in gene therapy stocks.
- Coronavirus plays up: ABT, HOLX, PFE, REGN all large caps.
- Mid cap favs red: BHVM MRNA NVCR TGTX XNCR etc
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Update-2 March 24 2:25p EDT Bearish Mode continues in biotech.
I can enumerate reasons for sell-off-AZN vaccine issues, European lockdown, Suez Canal, downgrades, rise in interest rates – but this could be just reset of shift to value. Momentum stocks so over!
- XBI sell-off that began late Monday continues to 2021 lows ; ARKG follows. Speculative stocks can’t catch bids.
- Large caps holding: BMY, MRK, PFE.
- UNH, XLV holding; IBB down 1.79% to $148.93.
- Or are we back to drug pricing reform concerns?
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Update-1 3:20 p Mar 23…EDT…Caution with sell-off; small caps hit hard, details at close. XBI down 5%, IWM down ~3%.
Healthcare Stocks Steady in A Choppy Week for Trading
- Avoid the whipsaw with large cap healthcare stocks.e.g. IBB,UNH
- Small caps still look good for trading in months ahead .
- Rotation into value and cyclicals has cut into NASDAQ momentum.
Healthcare stocks eked out small gains last week in a choppy market that saw most sectors down. This is what you would expect from large cap healthcare stocks like biopharma and providers like United Health, less volatility when markets are choppy.The market is currently buffeted between value stocks from low interest rates and the reopening trade and growth or momentum from breakthrough product news or earnings. When the Ten Year Treasury Yield stays below 1.7% we get a tech rally and cyclicals are weak.The healthcare sector presumably gives you the “happy medium”.
Tech Stocks Up in Early Trading 11 am EDT
This week we could get a return to momentum if early Monday trading holds up -both bellwethers the ARK Genomic Revolution (ARKG) and the XBI show signs of interest. The NASDAQ need to show strength as its is up almost 1% in early trading while the DOW is flat. Among our recent biotech trades we did well with laggard Regeneron (REGN) and today added to Editas Medicine (EDIT) at 46. We also own Intellia Therapeutics (NTLA) among gene therapy stocks that usually do well when biotechs are running. CRISPR Therapeutics AG (CRSP) is also up almost 2% today.
Our core large caps holdings are in the green in early trading: ABT, ABBV, GILD, PFE, RHHBY, but MRK is down slightly. Astra Zeneca (AZN) got relief today on positive efficacy data of 79% in a US trial, but there is a spat between the UK and the European Union on vaccine access.
Mid-caps are strong today with leaders all up around 2%: BHVN LGND NVAX RGEN TGTX XNCR. The IBB is up around 0.83%. Teledoc Health (TDOC) is trying to recover from last week’s downdraft caused by Amazon threat, up 3% to the $197 level.
Life Sciences Tools and Diagnostics stocks are in the green today beneficiaries of the secular bull market in biotech, Funding for public and private biotechs remains strong. A recent spin-out from JNJ went public recently and Ortho Clinical Diagnostic Systems (OCDX) is up over 2% after releasing their first earnings report.
Small caps are lagging with the IWC,IWD and IWM all down slightly.
| Initial | |||||||||||
| Stock/ETF | Ticker | Price | Wgt | 11/27 | %Perf | Price | QTR | 2020 | Price | %Perf | High P |
| 10/25 | % | 1 mo. | 12/31 | % | % Perf | 3/20/21 | YTD | 2021 | |||
| iShares NAZ Bio | IBB | 136 | 25 | 143.22 | 2.27 | 151.5 | 11.9 | 25.7 | 155.89 | 2.9 | 172.6 |
| iShares Russell 2k | IWM | 163 | 10 | 184.37 | 16.56 | 196.4 | 30.9 | 18.3 | 226.94 | 15.75 | 233.59 |
| Merck | MRK | 80 | 10 | 79.86 | 2.4 | 81.77 | -1.39 | -10 | 77.51 | -4.84 | 85 |
| United Health | UNH | 330 | 25 | 337.94 | 5.44 | 350.7 | 12.5 | 19.3 | 366.58 | 4.25 | 365nh |
| SPDR S&P Bio | XBI | 117 | 5 | 131.46 | 11.95 | 140.8 | 26.3 | 48 | 145.07 | 3.05 | 174 |
| Healthcare SPDR | XLV | 108 | 25 | 109.44 | 3.35 | 113.4 | 7.55 | 11.4 | 115.07 | 1.44 | 118.15 |
| DOW | DIA | 326 | 6.61 | 328.31 | |||||||
| S&P 500 | SPY | 389.49 | 5.61 | 394.06 | |||||||
| NASDAQ-100 | QQQ | 313.14 | -0.19 | 336.45 | |||||||
| T.Rowe Hlth Sci |
PRHSX
|
* | 99.19 | 0.34 | 106.6 | ||||||
| Fido Biotech |
FBIOX
|
* | 24.99 | 0.75) | 27.73 | ||||||
| SPDR S&P Pharm | XPH | 53.49 | 2.75 | 56 | |||||||