Update-2 Powell talks taper as market rises.
All indices were up in early trading with NASDAQ up 0.96%.Cyclicals were leading with energy XLE up 3%, industrials XLI up 0.88%, and XLF up 0.9%. A “risk-on” trade was developing with the IWM up 2.5% and the XBI up 3.12% to 132.59. All of our focus picks were up: CRSP, CYRX and VCYT.
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Update-1 8/25 1;30p EDT Re-Rotation and Re-Opening Redux?
As the S&P floats to new highs again today we see a bit of re-rotation into cyclical stocks. XLE up 1.16%, XLF up 1.5% and XLI up 0.83%. Financials look strong across the screen with major banks top over 2%. Techs and healthcare are losers.
Biotechs are catching bids with the IBB up 0.50 % and the XBI up 1.45% off the recent bottom. Moderna (MRNA) is up 0.96% with an FDA filing for final approval of its mRNA vaccine but the stock is choppy recently at the $400 level .Recent studies showed both the Pfizer and Moderna vaccines had lower efficacy over time. The JNJ vaccine is back in the race today with a report showing their Covid vaccine booster shot increased the immune response. More companies are adopting strong policies requiring vaccination.
Our mid-caps saw some action today with Cryoport (CYRX) up 0.30 % and Veracyte (VCYT) up 3.62%. Gene therapy stocks were mixed but a lot of green. Large caps were mostly flat with sellers in BIIB,BMY,PFE and buyers in ABBV and bargain hunters in VRTX. Some well known biopharma winners today: MRTX,NBIX, RARE, SRPT etc.
The Jackson Hole Meeting on Friday may provide a outlook on MACRO but for both the economy and market are resilient despite Afghanistan and the delta virus spike.
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2P EDT NASDAQ up 1.59%, IBB up 2.76% at $171.74, XBI up 4.45% at $127, ARKG up 3.29% at $82.35.
Healthcare Stocks Hit New Highs
- Small cap life science stocks lag: ARKG, XBI.
- Winners in Portfolio UNH, XLV.
- Pfizer vaccine FDA approval sparks rally in biotechs
We have favored healthcare stocks for non-traders since October 2020. Over the past week many stocks by sector were mainly down as the surge in the delta COVID variant raised concerns about the economy and hospitalization rates in certain Southeastern States. Many of the “re-opening plays were down the past week- energy, materials and industrials. But today saw another reversal in a broad rally. Although vaccination rates have been picking up public health experts are leaning toward a view that the virus may be with us for some time to come.Travel outside the US is not recovering and consumer sentiment and retail sales were down recently.
Vaccine Stocks Continue to Run
Pfizer was up almost 3% on full FDA approval of their vaccine in partnership with BioNTech (BNTX) up 9.2% even though FDA approval was expected. Today vaccine stocks are rallying again on funding for booster shots and a longer term outlook for vaccine mandates. But expect some pushback and revisions on the booster plan. Moreover full FDA approval may encourage more vaccinations. On Friday BNTX was up 5.08%, MRNA up 1.98 %, NVAX up 6.17% . In the coming months we’ll see if the vaccine manufacturers reformulate to better protect against the delta and other variants, Coronavirus testing stocks lagged today despite expectation that more venues and companies will require vaccination and COVID tests: ABT flat at $126, QDEL flat at $119,
Small Cap Speculative Stocks Perk Up Today
As you can see from the IWM and the more speculative biotech ETFs most of the rally YTD has been in the higher quality biopharma dividend names plus United Health (UNH). Today all of our new small cap focus stocks are up for the second day: CRSP, CYRX and VCYT.
Many smaller cap biotech stocks trade on news and milestones and have no earnings so require more expertise in the field.
Surprisingly the debacle of the Kabul evacuation is not being reflected in the economic outlook nor the market. The FED outlook will be in the headlines later this week,
| PORTFOLIO | ||||||||||||
| Initial | 2020 | |||||||||||
| Stock/ETF | Ticker | Price | Wgt | 11/27 | %Perf | Price | QTR | 2020 | Price | YTD | High P | 52w |
| 10/25 | % | 1 mo. | 12/31 | % | % Perf | 8/21/21 | % Perf | 2021 | ||||
| iShares NAZ Bio | IBB | 136 | 25 | 143.22 | 2.27 | 151.5 | 11.9 | 25.7 | 167.16 | 10.34 | 176.81 | |
| iShares Russell 2k | IWM | 163 | 10 | 184.37 | 16.56 | 196.4 | 30.9 | 18.3 | 215.52 | 9.93 | 234.42 | |
| Merck | MRK | 80 | 10 | 79.86 | 2.4 | 81.77 | -1.39 | -10 | 78.68 | 0.8 | 85 | |
| United Health | UNH | 330 | 25 | 337.94 | 5.44 | 350.7 | 12.5 | 19.3 | 429.71 | 22.54 | 429.71 | H |
| SPDR S&P Bio | XBI | 117 | 5 | 131.46 | 11.95 | 140.8 | 26.3 | 48 | 122.13 | -13.25 | 174 | |
| Healthcare SPDR | XLV | 108 | 25 | 109.44 | 3.35 | 113.4 | 7.55 | 11.4 | 136.11 | 19.98 | 136.81 | H |
| iShares U.S MedT | IHI | 59.24 |
new 6/21
|
64.65 | 18.52 | 64.65 | H | |||||
| ARK Genomic | ARKG | 79.74 |
new 5/21
|
79.73 | -16.41 | 115.15 | ||||||
| DOW | DIA | 351.16 | 14.7 | 355 | H | |||||||
| S&P 500 | SPY | 443.36 | 18.58 | 447 | H | |||||||
| NASDAQ-100 | QQQ | rating | 367.73 | 17.21 | 369.67 | H | ||||||
| T.Rowe Hlth Sci |
PRHSX
|
***** | 2021 | * | 112.14 | 11.6 | 113.25 | H | ||||
| Fido Biotech |
FBIOX
|
*** | 2021 | * | 22.16 | -6.9 | 27.73 | |||||
| SPDR S&P Pharm | XPH | 48.91 | -6 | 56 | ||||||||