Update -5 1/28/24...Weekly Summary Healthcare Sector: XLV flat for week down 0.14% to $139.27, IBB up 0.13% to $135.35, XBI up 1.37% to $88.24. Pivotal week coming up with FED day Wednesday and MEGA cap earnings and biopharma large caps – LLY, MRK,REGN, ABBV. Still like Pfizer (PFE) as contrarian Long under $29.In forefront: Border crisis, Gaza, Red Sea shipping Crisis, Ukraine etc. XLE up 5% XLC up 4.51%. Europe, Shanghai up.
- MedTech after ABT,JNJ, IHI down 0.51% to $55.12.
- DHR and TMO report next week.
- QQQ up 0.62% for week to $423.81
- Hope for broadening of rally this quarter.
- XLE up 5% to $84.25.
- nice move in XBI today: 1/29/24, same for ARKG.
Update-4 …11:25a !/26…Diagnostic/Device leaders higher in early trading: DHR up 4% TMO up 3% portending better earnings next week? Many stocks in the sector are strong today: A, BIO, TECH, WAT, VCYT.
Update-3 …1030 am EST ..Grim outlook from Humana hits shares 11% to $400; Medicare Advantage is too good a deal. Q4 ’23 EPS loss is GAAP $4.43. IHF providers ETF plummets 2.6% to $452 Higher rate of medical usage but for what?. MEDtech quiet with IHI up a tad to $54.78. ABT and ISRG up. VCEL up 7%. BSX and SYK earnings next week.
Update-2 ABT down 3% on revenue miss but expects sales growth of 8-10 % in 2024 with GAAP EPS of 3.20-3.40. Strong R&D pipeline in cardiology and diabetes. IHI down over 1%, JNJ still weak but MEDtech looks good; ISRG weak on good earnings. MEDtech sector weak.
Update-1 Indices for DOW and S&P 500 hit record highs as bull run continues.JNJ reports tomorrow.
- Small caps gain ~ 2% after recent slide: IJR, IWM, XBI. IBB flat at $135.
- Our top small cap biotechs show big gains:CRSP, EVH, VCEL, VCYT etc.
- Gilead Sciences (GILD) down10% on failed lung cancer drug Trodelvy in Phase III study.
Momentum Shifts to Tech and Big BIopharma Stocks in 2024
- Small Cap traders are taking a break in 2024 as XBI is down 2.51% YTD.
- Widely held United Health (UNH) is down 4.35% YTD. IHF Providers ETF is down 2% YTD.
- Medtech starting to recover from “Ozempic Effect”.
The nascent bull market is intact with many sectors doing well YTD as investors shift their perspective to upcoming earnings reports and guidance for 2024. The momentum trade in small caps faded through #JPM24 despite a pick-up in M&A. And UNH down 4.35% YTD the mainstay of many healthcare portfolios and funds was rocked by higher costs despite good growth of 15% and an earnings beat. But diversification helped because the Financial sector (XLF) is up 0.88% YTD, the Industrials (XLK) up 2.3% YTD and the S&P (SPY) up 1.5% YTD. Importantly the TECH sector is coming back with the XLK up 4%YTD and the QQQ up 2.85% YTD. Healthcare stocks have been helped by big biopharma as you can see from some our top picks below: ABBV, GILD, LLY, MRK, REGN and VRTX.
- Despite some weakness in healthcare stocks the XLV was up 2.26% YTD because of overweight in large cap biopharma and medical devices with some re-balancing with longs in DHR, JNJ, TMO.
Small cap speculative stocks had a nice run as we expected up to #JPM24 but not enough fuel to keep momentum intact as you can see by the XBI down 2.5% YTD. Similarly we see ARKG falling 12.13% YTD. We traded out of both of these ETFs and they can be the bellwether of what’s to come with small cap biotechs. Among SMID biotechs holding values since early October: CRSP, CYTK, VCEL, VIAC. The IBB is waning up only 0.49% YTD.
We added to MedtTech with BSX and more speculative medical device small caps as we expect procedure utilization and testings will pick up as reported by hospitals and insurers. Note that ABT is up 4.2% YTD. A few months ago there were reports that because of the wide of popularity of GLP-1 agonist obesity drugs from Lilly and Novo-Nordisk there would be lower utllizatioon of medical care so watch for this trend.
But the big story so far in 2024 is your portfolio needs to be overweight TECH because of AI, DATA centers and demand for semiconductors.
| Model | ||||||||||||
| PORTFOLIO | * | |||||||||||
| 2020 | 2020 | 2020 | 2021 | 2022 | 2023 | 2024 |
5 yr % Total Ret
|
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| Stock/ETF | Ticker | Price | Wgt | Price | Price | Price | Price | P | ||||
| 10/25 | % | 12/31 | % Perf | 12/31/21 | 12/31/22 | 11/11 | 1/21 | %Perf | % | |||
| P | YTD | |||||||||||
| iShares NAZ Bio | IBB | 136 | 10 | 151.5 | 25.7 | 152.62 | 130.55 | 115.53 | 135.18 | 0.49 | 22.37 | |
| iShares Russell 2k | IWM | 163 | 5 | 196.4 | 18.3 | 222.45 | 174.36 | 175 | 192.43 | -4.13 | 30.61 | |
| Merck* | MRK | 80 | 10 | 81.77 | -10 | 76.64 | 115 | 101.39 | 118.89 | 9.05 | 64.22 | |
| United Health | UNH | 330 | 15 | 350.7 | 27.19 | 502 | 530.27 | 541.21 | 503.56 | -4.35 | 89.66 | |
| SPDR S&P Bio | XBI | 117 | 5 | 140.8 | 48 | 111.96 | 83 | 66.95 | 87.05 | -2.51 | 4.4 | |
| Healthcare SPDR | XLV | 108 | 20 | 113.4 | 14.71 | 140.89 | 135.88 | 126.27 | 139.46 | 2.26 | 54.82 | |
| T.Rowe Hlth Sci | PRHSX | n/a | 10 | 99.65 | n/a | 104 | 89 | 83.41 | 88.45 | 0.67 | 20.35 | |
| iShares U.S MedT | IHI | 50 | 10 | 54.83 | 65.85 | 52.57 | 45.75 | 55.4 | 2.65 | 57.44 | ||
| MedTech* | ABT | 5 | 123.5 | 127.46 | 109.83 | 93.97 | 114.69 | 4.2 | 60.59 | |||
| peak yr | ||||||||||||
| Tracking Comp | ||||||||||||
| ARK Genomic | ARKG | 93.26 | 61.24 | 28.23 | 24.1 | 28.83 | -12.13 | – | ||||
| Direx3X Bull | LABU | 7.66 | 2.74 | 110.89 | -9.08 | -88.86 | r split? | |||||
| FIDO Biotech | FBIOX | ** | 25.18 | 19.35 | 16.04 | 14.39 | 17.99 | 0.9 | -10.59 | |||
| FiDO MEDtech | FSMEX | 76.15 | 83.18 | 60.04 | 51.64 | 62.64 | 1.1 | 24.63 | ||||
| DOW | DIA | 310 | 363.32 | 331.34 | 343 | 378.6 | 0.46 | 53.25 | ||||
| S&P 500 | SPY | 379 | 475 | 382.41 | 440 | 482.43 | 1.5 | 81.05 | ||||
| NASDAQ-100 | QQQ | 315 | 397.85 | 266.33 | 378.39 | 421.18 | 2.85 | 154.87 | ||||
| Technology SPDR | XLK | 128.93 | 161.97 | 124.44 | 179.52 | 200.17 | 4 | 206.3 | ||||
| Top Biopharmas | * | 2022 | 11/11 | P 1/19 | % ytd | 5 yr % total | ||||||
| Abbvie | ABBV | * | 161.64 | 138.59 | 164.67 | 6.32 | 84.1 | |||||
| Astra Zeneca | AZN | * | 68 | 63.17 | 66.54 | -1.2 | 82.05 | |||||
| Bristol Myers Sq | BMY | 71.05 | 50.61 | 50.11 | -2.34 | – | ||||||
| Gilead Sci | GILD | 85.39 | 75.92 | 87.29 | 7.79 | 26.19 | ||||||
| Eli Lilly | LLY | * | 447.71 | 597.71 | 628.58 | 7.83 | 439.14 | |||||
| Merck | MRK | * | 110.95 | 101.39 | 118.89 | 9.05 | 64.22 | |||||
| Pfizer | PFE | * | 51.24 | 29.48 | 28.28 | -1.77 | -29.91 | |||||
| Regeneron | REGN | * | 725 | 798.94 | 933.4 | 6.27 | 122.85 | |||||
| Vertex | VRTX | * | 288.78 | 373.65 | 435.02 | 6.91 | 122.43 | |||||
, mrk and REGN.