Update-4 Healthcare stocks hit hard with XLV down 0.77% to $133 handle. But CVS is down 8.43% on Caremark PBM trouble as Blue Shield moves to Amazon. UNH down 1.93% on disruption scenario with PBMs? Healthcare providers ETF IHF down 2.28% to $250:
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Update-3 8/16 3:50 p Now the FEDspeak is curbing all buying sentiment with some whacks at the end of the day. Worst are the SMID caps and in healthcare the tools, diagnostics, and MEDTECH. Track IHI, DHR, and TMO all weak. Most indices down about 1%. XBI down 1.67%.
No longer just a consolidation but a sell-off?
8/17 bought a little more PFE at $36 handle.
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Update-2 Healthcare holding in a weak market with a lot of MACRO flak- rising rates, CHINA, seasonality etc. Retail reporting day tomorrow.Not much to do except raise a little cash.Large cap winners today : AMGN,BMY,LLY. XLV at $135 handle.Tools, diagnostics and MEDTECH weak as well.
Energy Financials Materials among weakest sectors,
Update-1 8/11…A Good Week for many Healthcare and Biopharma Stocks
Our portfolio did well despite some weakness in tech and AAPL. Our large cap biopharma stocks near or at 12 month highs: AZN, LLY, REGN, VRTX. Also looking like good holds are GILD and MRK . UNH remains a core defensive holding. PFE for bargain hunters ? XLV was up 2.47% for the week at $135.67.
The IBB perked up bit maybe on some M&A data in the WSJ. But it is still down 2.07% YTD. The XBI was down 1.66% this week so not much speculation and a lot of weakness in SMID stocks.So stay with the large caps amidst the uncertainty in MACRO, the bond market and weak seasonality.
MEDTECH had no follow through so this needs review, The IHI was down 1.57% for the week at $53.26. Our new pick BDX was up 4.25% for the week. We bought a little Stryker (SYK) but it was down slightly. ABT was off 2.17% for the week. JNJ held firm as Kenview “split” off date approaches. Still looking for interest in DHR and TMO both laggards.
Energy showed strength this week with the XLE up 3.43% to $89.90.
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- Reduce portfolio risk after a big run because of seasonality and valuation concerns. CPI this week.
- SMID and small cap biotech lack momentum. IBB and XBI are choppy lacking interest. Large cap biopharmas are sweet spot.
- Broader buying interest today with Comm services, Financials and even Real Estate showing nice gains.
Biotech and healthcare stocks have lagged the market for the first half of 2023. Last week was turbulent and it won’t get any easier with poor seasonality in late August through September. But the great market rally of 2023 has broadened so we expect some rotation into financials, cyclicals and healthcare. As of Friday’s close the S&P 500 was up16.6% YTD, the NASDAQ -100 (QQQ) up 32.9% YTD, the DOW up about 7% and the Russell 2000 up 11.1% YTD. So after an unexpectedly bullish year we want to protects our gains and stay more defensive from unexpected volatility. We think now that most earnings reports are in from large cap healthcare, biopharma and device stocks this sector looks relatively free from macro and geopolitical uncertainty.
Our last biotech and healthcare playbook on Aug 2 was summarized as follows including any recent updates:
- The overall healthcare sector (XLV) at $140 up 3.79% MTD down 1.38% YTD improved mainly from the UNH earnings beat boosting stock 10.57% MTD.
- Positive trends expected beginning with MedTech with the IHI up 3.39% YTD and ABT down 1,21 % YTD, SYK up 17.1% YTD. New pick BDX with improved guidance .
- Speculative and SMID biotech have little momentum with the XBI down 5.2% YTD
- Top biopharma longs are:ABBV, AZN, LLY, MRK, REGN, VRTX were in the green today did not do well in July. Good bottom fishing with GILD and PFE.
- THE QQQ outperforms all indices up about 33% YTD. Cyclicals and the DOW are trending up.
Today Amgen (AMGN) was up 3.97% to $352.94 on last week’s earnings beat and confidence regarding Horizon Therapeutics takeover.
Eli Lilly (LLY) of the top 2023 large cap performers with high expectations for weight loss drug reports tomorrow before market opens.
Update 8/8/23 6:15a Lilly beats raises guidance highlights pipeline advances , stock soars pre-market.
Update 8/8/23 7:30a Novo stock soars 17% on weight loss drug study showing heart benefit.
