Update-2…3/7/25—The market was headed for more losses on Friday during a bad week from tariff chaos when Chairman Powell came on helping calm markets.The healthcare sector continue to avoid tariff issues but we have a few more rounds including “reciprocal tariffs” that bears watching.
- We had a brief rally in SMID biotechs midweek but the XBI was down 1.89% for the week not bad considering that the QQQ was down 3.22%.
- We added EyePoint Pharmaceuticals (EYPT) and Solid Biosciences (SLDB) to our SMID trading list.
- Large cap biopharmas are still strong with ABBV, AMGN up over 5%, BMY, GILD, MRK, REGN,VRTX all showing gains but LLY declined 5.55%. RHHBY was up 5.15%.
- Our latest large cap MedTech pick BDX was up 1.78% for the week pushing toward $230. However the IHI US Medical Device ETF was down 2.9% for the week so there could be some tariff issues in this sector with losses in ISRG and SYK.
- Healthcare held up during a bad week with UNH up 3.9% and the XLV flat up 0.24%.
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Update-1 …3/5/25—Green screen day with SMID biotechs with NAZ rally up 1.5%. XBI up 1.8%,I ARKG up 1.78%,IBB up 1.7% ,XLV up 1%. Remember the rule if ARKG and XBI rally then SMIDs should follow. Healthcare stocks are favored above flak of tariff battle. XLV up 8.8% YTD.
- SMID biotech >2% movers: BDSX, CMD,CYRX, DNLI, GH, EYPT, IMVT, NTRA, NVAX, RNA, SLDB,TXG, VIGL.
- US Judge bars TRUMP Administration from NIH Research Funding.
- Wegovy weight loss drug price reduction.
- Large cap biopharmas still look good up 1%.
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Biotech Rally Coming in March-But Can MOMENTUM return to SMID caps?
- Large cap biopharma and MedTech stocks are leading the healthcare sector higher.
- SMID Cap Life Science stocks are lagging as the “Momentum” market gets choppy. Small caps lag.
- We are poised ready to trade selective SMID biotechs based upon technicals and news.
Of course nobody knows for sure what will happen with biotech stocks particularly at this juncture when MOMENTUM has faded and technicals are choppy. Here is where we are on tracking key ETFs in Healthcare and biotech: Top positions of each ETF is included.
ARKG at $24.62, up 3.84% YTD, down 25.3% one year. Agressive fund that picks high beta stocks creating innovation. TWST, RXRX, TEM,GH, VCYT.
IBB at $137.03, up 3.6% YTD, down 1.75% one year. Balanced biotech fund more weighted to large caps. GILD, AMGN, VRTX, REGN
XBI at $88.7 down 1.5% YTD, down 12.65 YTD. Equal weight NBIX, ALNY, NTRA etc.
XLV at $148.93, up 8.26% YTD, up 2% one year. Healthcare fund weighted to large caps including insurance and providers. LLY ,UNH, JNJ, ABBV, MRK.
IHF at $50.86, up 5.94% YTD, down 5.57% one year. Providers weighted to UNH, ELH CI etc
IHI at $63.77, p 9.08% YTD, up 10.92% one year. ABT, ISRG, BSX.
Small caps in general are lagging the market but we like the Russell 1000 Value (IWD) up 5.26% YTD, up $13.89% one year. JNJ, UNH. The IJR is down 2.77% YTD and up 3.98% over one year. Value leading growth.
The Large Cap Biopharmas have done well as did many of the large cap MedTechs like ABT, BSX, GEHC, IHI, ISRG, MDT, SYK. So we expect the Medical Device sector should continue do well in 2025. But the issue for “health sciences” stocks is really clouded. Can the small caps as defined in healthcare as SMID Life Science which we follow in a Trading Portfolio. Among the major stocks and FUNDs that we currently hold from this List are : ADPT, CPRX, CRMD, GH, PTGX, SLDB (new), SUPN,TXG, and VCYT. Some of the big winners that we sold or never bought are: EXEL, LGND, NTRA. Funds that we own long term in healthcare are : FBIOX, FSMEX, PHRSX. We actively trade ARKG and XBI.
Keep in mind that if one is managing a portfolio and healthcare stocks are only 11-15 % of major indices you could lose money compared to the S&P (SPY) if technology or materials are strong. Leading sectors YTD are Healthcare up 6.77%, Financials 6.54% and Communication services 5.82%. Technology stocks are down YTD with the QQQ down 0.6%. Furthermore since SMID caps are lagging (see XBI) it is tough to make money in SMID Caps without incredible stock picking. As of 10:30a EST all three biotech ETFs are down less than 1%, but large cap favorites are up: ABBV, AMGN, JNJ, LLY, PFE.But REGN is down.
Cowen Healthcare conference should help this week.
Another new pick Becton Dickinson (BDX) is up over 1% at $228 level.
(Most stock data is from Yahoo Finance.)