8/2 …10a EST: Port in the storm in this volatile rotation ? healthcare stocks: ABT,INSP, MRK, REGN, UNH etc.
8/1..3:10P EST…Massive reversal down for chip stocks and tech in general. Only green on my screen are large cap biopharmas: ABBV, GILD, LLY, MRK,REGN,VRTX etc
8/1 …11a…Regeneron (REGN) beats on Eylea Dupixent sales, strong Q2 up 12% to $3.55B. REGN up 0.83%, LLY up on positive Ph 3 study for heart disease with Tirzepatide.
Tech rally fading already? way too volatile to trade!
7/31 at close..Update-3 SOLID Gains as some techs reverse course,QQQ UP 2.96% come back with solid gains : AMD,NVDA,META pops with earnings beat; small caps up but not so much less that 1%.
But IBB and XBI are flat. More green than red in SMIDS: and crazy interday volatility on high volume. GEHC up a solid 2.4% on tepid earnings and revenue growth
7/31..12n.FED holds rates but looks like a cut in September. Stocks off highs but chips remain strong.AMD a big winner and catalyst for gains. QQQ up over 3%, XBI up about 2%. RISK is on so buy SMID selected biotechs.
corr-7/31 am..Update-1 7/30..Large Cap Earnings coming up …IBB flat, XBI down 1.28%, XLV flat. Biopharm looks like a good …7/31…Update-2.. NAZDAQ soars 2.5%—Counter-trend rally in tech and chip stocks; Fidelity systems down! Update at midday. SMID biotechs want to rally.
- Merck (MRK) down 9.8% on lowerEPS guidance; HPV vaccine miss; Q4 Revs of $16.4B,Keytruda Sales up 7% QtQ of $16.1B,GAAP EPS 2.14.
- Pfizer (PFE) up 2.18% on guidance hike,EPS beat, strong Q2 revs first growth in post COVID era; Q4 Revs of $13.3B,full yr EPs guided to $59.5_$62.5.
- Novavax sinks 26% on disappointing vaccine demand. JPM downgrade.
Biotech Stocks Are Having a STRONG JULY
- The biotech rally gained momentum in JULY with ROTATION out of technology stocks.
- Small cap rally coincident with biotech strength helped by potential FED rate cut soon.
- MedTech remains a lagging sector as well as providers (IHF).but UNH coming back.
So apparently the market believes that lower interest rates are good for biotech stocks. And this is big week for economic data with Powell speaking on Wednesday.. Economists are predicting a cut in rates this week or in September with a 100% probability. It’s big week for large cap earnings and they should be good. For starters the turnaround for Bristol Myers (BMY) is intact with great commercial execution , Q2 revenues up 11% to $12.2B and GAAP EPS of $0.83. NOn-GAAP guidance was raised. In early morning trading the stock is up 0.43% at the $50 handle. Bristol Myers is one of the companies targeted by Congress with the Inflation Reduction Act (IRA) so it appears to be manageable.
But medical device stocks are under fire with Abbott (ABT) being hit with SImilac litigation eerily looking like the interminable JNJ talc debacle though not in scope nor financial risk.
Most of the large caps are at 2024 highs but with many analysts concerned about a weaker economy investors may see them defensive play with less volatility. So look for SMID cap biotechs to continue the rally with M&A always having “wild card ” potential.
So it’s a big 2 weeks of data with weaker seasonality for the market ahead. Can SMID stocks continue momentum in late August/September or just a trade?
(Note corrections in typos above)
Some Takeaways from the JULY BIOTECH Rally
- Even the laggard IBB has come back strong in JULY up 9.14% YTD with 7.5% MTD.
- Biotech stocks are running with the small caps note the IWM is up 12% MTD.
- MEDTECH still lags among Healthcare sectors with the IHI flat YTD up only 0.78.%; ABT is still down 4.39% YTD.
- The best large cap biopharma performers YTD are: LLY, REGN, VRTX, ABBV-all outperformed the S&P up 14.7% YTD.
- Best performance for month to date: UNH, BMY, PFE, GILD and JNJ all laggards.
- SMID caps continue to rally XBI up 10% MTD and ARKG up 14.65% YTD.
- Biotech Fund are making strong comeback: FBIOX up 10.9% MTD and JNGLX up 14% YTD.
- Life Science stocks are outperforming IT and technology for the first time MTD.QQQ down 3.62% MTD.
LONG:Large cap biopharma, ABT, UNH, FBIOX, PRHSX, FSMEX, XBI.
| Model | |||||||||||||
| PORTFOLIO | * | ||||||||||||
| 2020 | 2020 | 2020 | 2021 | 2022 | 2023 | 2024 | 5 yr % | ||||||
| Stock/ETF | Ticker | Price | Wgt | Price | Price | Price | Price | P | Tot Ret | ||||
| 10/25 | % | 12/31 | % Perf | 12/31/21 | 12/31/22 | 11/11 | 7/28 | %Perf | % | % | |||
| P | YTD | MTD | |||||||||||
| iShares NAZ Bio | IBB | 136 | 10 | 151.5 | 25.7 | 152.62 | 130.55 | 115.53 | 148.26 | 9.14 | 40.77 | 7.5 | |
| iShares Russell 2k | IWM | 163 | 10 | 196.4 | 18.3 | 222.45 | 174.36 | 175 | 224.22 | 11.71 | 42.63 | 12.09 | |
| Merck* | MRK | 80 | 10 | 81.77 | -10 | 76.64 | 115 | 101.39 | 125.26 | 14.9 | 61.21 | -4.75 | |
| United Health | UNH | 330 | 15 | 350.7 | 27.19 | 502 | 530.27 | 541.21 | 569.72 | 8.22 | 125.24 | 17.7 | |
| SPDR S&P Bio | XBI | 117 | 10 | 140.8 | 48 | 111.96 | 83 | 66.95 | 101.54 | 13.72 | 18.55 | 10.14 | |
| Healthcare SPDR | XLV | 108 | 25 | 113.4 | 14.71 | 140.89 | 135.88 | 126.27 | 149.96 | 9.66 | 62.88 | 2.64 | |
| T.Rowe Hlth Sci | PRHSX | n/a | 5 | 99.65 | n/a | 104 | 89 | 83.41 | 97.86 | 11.33 | 24.84 | 3.1 | |
| iShares U.S MedT | IHI | 50 | 10 | 54.83 | 65.85 | 52.57 | 45.75 | 54.39 | 0.78 | 31.61 | -2.49 | ||
| MedTech* | ABT | 5 | 123.5 | 127.46 | 109.83 | 94 | 105.24 | -4.39 | 19.93 | 0.34 | |||
| Diversfied MED | JNJ | new | 160.64 | 2.49 | 22.88 | 9.41 | |||||||
| Tracking Comp | |||||||||||||
| ARK Genomic | ARKG | 93.26 | 61.24 | 28.23 | 24.1 | 27.23 | -17.01 | -21.53 | 14.65 | ||||
| Direx3X Bull | LABU | 7.66 | 2.74 | 146.16 | 19.83 | -84.11 | 30.69 | ||||||
| FIDO Biotech | FBIOX | ** | 25.18 | 19.35 | 16.04 | 14.39 | 21.32 | 19.57 | 7.03 | 10.93 | |||
| FiDO MEDtech | FSMEX | 76.15 | 83.18 | 60.04 | 51.64 | 62.66 | 1.13 | 9.58 | -0.56 | ||||
| JanusHendLifeSc | JNGLX | 78.84 | 14.05 | 35.07 | 3.3 | ||||||||
| DOW | DIA | 310 | 363.32 | 331.34 | 343 | 405.97 | 7.72 | 49.33 | 3.76 | ||||
| S&P 500 | SPY | 379 | 475 | 382.41 | 440 | 544.44 | 14.54 | 80.27 | -0.2 | ||||
| NASDAQ-100 | QQQ | 315 | 397.85 | 266.33 | 378.39 | 462.97 | 13.05 | 137.07 | -3.62 | ||||
| Technology SPDR | XLK | 128.93 | 161.97 | 124.44 | 179.52 | 216.28 | 12.36 | 161.87 | (4..40) | ||||
| Top Biopharmas | * | e | 2022 | 11/11 | 7/28?24 | %YTD | 5 yr % total | 1 mo. | trend | ||||
| Abbvie | ABBV | * | 161.64 | 138.59 | 185.26 | 19.48 | 173.26 | 8.19 | u | ||||
| Amgen | AMGN | 334.85 | 7.94 | 16.26 | 7.04 | u | |||||||
| Astra Zeneca | AZN | * | 68 | 63.17 | 78.13 | -1.2 | 79.57 | -1.2 | – | ||||
| Bristol Myers Sq | BMY | * | 71.05 | 50.61 | 50.45 | -1.68 | 11.2 | 18.71 | u | ||||
| Gilead Sci | GILD | * | 85.39 | 75.92 | 77.01 | -4.94 | 15.08 | 11.11 | u | ||||
| Eli Lilly | LLY | 447.71 | 597.71 | 804.62 | 38.03 | 643 | -10.72 | d | |||||
| Merck | MRK | 110.95 | 101.39 | 125.26 | 14.9 | 61.21 | -4.75 | d | |||||
| Pfizer | PFE | 51.24 | 29.48 | 30.77 | 6.88 | -24.73 | 12.22 | u | |||||
| Regeneron | REGN | 725 | 798.94 | 1078.63 | 22.81 | 248.87 | 0.89 | – | |||||
| Vertex | VRTX | 288.78 | 373.65 | 495.26 | 21.72 | 196.87 | 4.49 | u | |||||