Update-1 April 2 on “Liberation” day before Trump talk. Green screen day in SMID biotech! XBI turned early from $77.34 now at $80 handle. Many 3% + winners:
Trader’s delight –ADPT, BBIO,CRMD, CYTC, DNLI, GPCR, EYPT, ILMN, PACB, RNA, SLDB etc etc
How Did Biotech and Healthcare Stocks Outperform Doing Hell Week?
- Healthcare stocks (XLV) outperformed during the worst week since SEP’ 22, but the losses were heavier in tech stocks with the QQQ down 3.47%.
- The S&P 500 SPY was down only 1.49%.MAG 7 (MAGS) stocks continued choppy down 2.7% for the week and 16.6% YTD.
- Concerns mount about the Consumer and a weaker economy with tariffs the wildcard on April 2. Jobs and upcoming earnings are key.
- The Ten Year Treasury is now at 4.2% compared to 4.8% in early January, and this is positive and a major bellwether for the Administration.
As we noted on March17 the “detox” period is underway during which the TRUMP 2.0 policies of spending cuts by DOGE and TARIFFs attempt to redirect the economy toward US manufacturing and reducing the deficit. And we don’t have a reading on how pharmaceutical tariffs will play out. For the longer term the policies aim to reverse “globalization” . However the focus of this article is not to review MACRO events or Administration policies rather to look at the market impact on healthcare and biotech stocks.
The buffers to cut risk in our portfolio have been a few large cap tech shorts, gold and miners, 2 year treasuries paying over 4.5%, large cap biopharmas and a few energy stocks. And with all our hedges we were still down about 1% overall for the week. But who knows what lie ahead as the week to week volatility has led a mood of uncertainty with a new Cabinet and many “balls in the air” geopoltically even in North America. As of today even the auto tarifff situation leaves many consumers confused unless of course you want to go to a car dealer now and buy at current sticker prices on the lot. And we have the next round of RECIPROCAL tariffs on APRIL 2 Maybe healthcare stocks are safer for now unless a new “sledgehammer” hits on April 2.
Let’s now look at major healthcare sectors in comparison:
Overall yes the healthcare sector even by major indices outperformed the market, The XLV was down only 1.42% for the week, up 5.05% YTD, with a heavy weighting of some of the large cap biopharmas below, and about 9% UNH but also large cap device stocks like ABT, ISRG and TMO. The iShares Global Healthcare ETF (IXJ) had comparable results down 1.27 % for the week and up 5.6% YTD. The holdings were similar with a few large caps with more overweight such as Astra Zeneca, Novartis, Novo Nordisk and Roche.
The iShares US Medical Device ETF(IHI) ETF was about flat for the week down 0.32%, up 1.64% YTD helped by gains in a few such as BAX, CAH, ZBH but really very stable stocks with few big sellers. But the IHI already took a 5%+hit this month on results from a few companies.
Despite the volatility of United Health the medical insurance providers have been a good place to hide from the global MACRO turmoil.The IHF is up 9.02 % YTD one of the best sectors within healthcare. These stocks hit al low last December after the UNITED HEALTH debacle.
Smaller Caps Take Another Hit- A Proxy for the Economy
Small cap stocks were weak as you would expect with the IWM and IJR down for the week and about 9% YTD and the IBB was down 2.4% for the week and down about 1.45% YTD, but much better than the QQQ down 8.27% YTD, down 7.72% MTD. Remember the small caps are a proxy for growth of the US economy.
We track the XBI for our trading strategy-“risk on risk off“-for when to buy and sell SMID Life Science stocks. The XBI down 6.28% for the year and 3% for the week is slightly out-performing the general market. Speculative biotech stocks are more sensivive to factors in the industry and interest rates so you have to be a good stock pickers when they are in a risk off mode. The gloom and doom of last week was pervasive and did not help biotech stocks.even our winners before March 2025: ADPT, BBIO, CPRX,CRMD,GH, PTGX, VCYT etc..Momentum is gone and downside volatility reigns. Even during bad weeks there are big 2%+ days.
Bu its not all about politics and the new administration because US equites have made a nice run since the financial crisis 2008-2009.,and over the past ten years. And stocks are not cheap.
Then we have coming in years ahead the economic impact of AI.
Here is a TEN YEAR chart of the S&P 500………and a FIVE YEAR Chart of GOLD (GLD).
Large Cap Biopharmaceutical Stocks-2025
| Top Biopharmas | * | 2022 | 11/23 | 3/30/25 | %YTD | one week | 1 mo. | H | div | ||||||
| Abbvie | ABBV | * | 161.64 | 138.59 | 205.3 | 15.53 | -2.25 | -1.79 | 216 | 3.2 | |||||
| Amgen | AMGN | 275 | 303 | 306.9 | 17.77 | -2.88 | -0.36 | 335 | 3.1 | ||||||
| Astra Zeneca | AZN | 68 | 63.17 | 73.79 | 12.54 | -1.52 | -2.46 | 87.62 | 2.1 | ||||||
| Bristol Myers Sq | BMY | 71.05 | 50.61 | 60 | 6.12 | -1.72 | 0.67 | 63.11 | 4.13 | ||||||
| Gilead Sci | GILD | * | 85.39 | 75.92 | 111.8 | 21 | 4.4 | -2.2 | 120 | 3.16 | |||||
| Eli Lilly | LLY | * | 447.71 | 597.71 | 822.51 | 6.54 | -1.8 | -10.7 | 956 | 0.72 | |||||
| Merck | MRK | * | 110.95 | 101.39 | 89.23 | -10.3 | -4.17 | -3.27 | 131.95 | 3.63 | |||||
| Pfizer | PFE | * | 51.24 | 29.48 | 25.21 | -4.98 | -4.07 | -4.62 | 30.19 | 6.82 | |||||
| Regeneron | REGN | * | 725 | 798 | 637.36 | -10.52 | -3.21 | -8.78 | 1190 | 0.55 | |||||
| Vertex | VRTX | * | 373.65 | 492.69 | 22.35 | -2.09 | 2.69 | 519 | 0 |