Update-1..12/11/24…Healthcare stocks take another hit as politicians go after PBMs again. XLV down 1.36% to $142.11. Healthcare providers rattled again by proposed bipartisan legislation on PBMs: UNH down 5.65 to $533 level, IHF down 2.5% to $50.85.Companies that own health insurers or PBMs would have to divest pharmacies.
Healthcare and Biotech Stocks: Playbook Update.
Normally the healthcare sector would be a defensive play amidst market uncertainty. But today because of the volatility created by the horrible United Health (UNH) killing and its spillover to social media we have to be a little cautious. On a positive note UNH was up 2.39% yesterday to $560. The XLV was up 0.29% to $144.70. Given the magnitude of the sell-off in the sector over the past two weeks we would wait before rebalancing your portfolio assuming you have an ample cash position. Here are some ideas to consider in managing your portfolio:
- Avoid buying general ETFs in the sector as the trends are choppy.
- Buy specific stocks such as biopharmaceuticals you know well and that pay dividends.
- It could be a good time to initiate a mutual fund position in health sciences/medical technology such as Fidelity Medical Technology (FSMEX) and T.Rowe Price Health Sciences (PRHSX).
Keep in mind other crosscurrents at this time of the year and with a New Administration and potential of healthcare policy initiatives in our government. Today’s trading gave a hint of profit taking with all the major averages down about 0.6%. Lately the market has been a bit frothy with the S&P 500 up 27.22% YTD and the QQQ up 27.56% YTD . Many retail investors are having a great year but may be reluctant to take profits for tax reasons whereas hedge funds are not concerned. ThIs could set up for a weak market in January/February.2025.
Here are some notable movers recently among stocks we follow:
BIOPHARMACEUTICALS
- Our top picks have been: ABBV, GILD, LLY, and VRTX. Also consider trades in BMY, PFE and REGN.
- IBB and XBI flatfish but holding upside channel
- ABBV up 13.94% YTD and with news today on Phase 3 Parkinson’s Drug Tavapdon Top Line Results.\
- GlaxoSmithKline (GSK) up 4.11% on Multiple Myeloma drug survival benefit.
- Warm autoimmune hemolytic anemia wAIHA a rare disease with treatment options by JNJ.(details published at ASH).
LIFE SCIENCE TRADES
- Upside Movers : ADPT, CRMD, CYRX,GPCR, ILMN, PACB, QDEL.
- ADPT up 4%+ on MRD treatment implication in blood cancers. (from ASH)
This has been a momentum driven market so it’s hard to say what could happen when the music stops.
We will update any product news from the ASH.