4/26 The constellation of bad news is overwhelming the market: China lock-down, War in Ukraine, commodity prices and WTI up and a horrible tape. MSFT earnings should help us tomorrow but we are in a bear mindset. IBB down 3.86% to $119.39 a 52 week low and the XBI down 5.98% to $76.69 at November ’19 lows. Who is fighting the FED? Nobody apparently. Amgen e up tomorrow with a PS of 5.24, 13 FWD PE and a 3.11 % yield. Pfizer (PFE) was the only green biopharma stock today. Best sector today is energy but it is flattish.
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4/24…Update 3 Critical week ahead for healthcare earnings with XLV down 3.58% to $133.67 for the week mainly on Friday.Now down 5.12% YTD. Abbott up 1.66% for the week post earnings beat but down 15% YTD at $119 handle.Helped by home COVID tests but hurt by baby formula recall.
Nowhere to hide over the past week. even energy down over 4%. XLF Financial down 1.95% to $36.17. On deck biopharma earnings coming up this week:4/27 AMGN,4/28 LLY, GILD, MRK then 4/29 ABBV,BMY. Laggards over 52weeks: IBB, BIIB,GILD,PFE. Here is our large caps biopharma earnings review for Q4 2021.
UNH down 2.65 for week but up 3.74% YTD. Anthem (ANTM) down 2.73 5 for week, up 8.43% YTD. IHF down 4.49% YTD.
CRUDE $102, 10 YR at 2.9%, S&P 500 4271.78.
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4/22. ..2P EDT Earnings apparently are not supporting bulls in today’s sell-off.Even lofty healthcare and biopharma stocks are being sold. XLV down 2.85%, IHI down 4.13% to $58 handle.
- Don’t fight the FED.
- “FED wants demand destruction”. To fight inflation.
- MEDtech in sea of red: EW ISRG SYK XHE etc. Cautious guidance.
- IBB down 2%.
- Materials sector even worse down 3.33%.
Biotech Flashback TEN Years ago 2012 Rayno Biopharma Portfolio !!!
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4/19/22 …Rally Day with a rotation helped by crude decline of 5.25% to $102.53, XLE down 0.83% to $80.35. Concerns remain about future sanctions on Russia boosting crude prices.
- NASDAQ strong up over 2%, QQQ up 2.24% to $346, XBI up 1.24% at $85 level.
- Large cap biopharma weak but IBB up 0.96%; XLV up 0.96% to $138.42.
- Mid-cap biopharma very strong:
- Techs stocks lead the way up; also consumer discretionary industrials up.
- JNJ up 3% on earnings optimism; company suspends COVID vaccine guidance but no e or guidance impact. MED tech sales improved and IHI up 2.9% to $60.50 from JNJ results.
- ABT e up next.
RiskTrading Days Lie Ahead With Earnings in Focus
- Pivotal earnings with guidance in weeks ahead.
- Overweight defensive stocks as fears develop.
- Oil prices rise with Ukraine tensions, WTI above $107.
The grim headlines have dimmed investor sentiment. Inflation, the COVID lockdown in China, supply chains exacerbated by the war in Ukraine. Market technicals deteriorated for the second week in a row. The only big winners last week were commodities and energy with a stark reminder to consumers as they absorb high gas prices. Over the past 12 months only healthcare stocks have been the sweet spot. And still you had to be a good stock picker unless you owned the XLV up 16.95% over one year but down 1.65 % YTD. To outperform the market you had to be in United Health (UNH) up 42% in a year and a basket of large cap biopharma stocks .More likely your portfolio that your portfolio is down for the most recent 12 month period. Have a look at the excellent returns below on the top biopharmaceutical stocks we have covered and still hold over the past two years. The S&P is down over 12 months and the DOW up only 2% helped largely by Apple and energy stocks.
it’s well known by now that biotech stocks are in a bear market if you look at the ARKG or XBI down 33.67% over 12mos. because they are weighted toward mid and small cap stocks (see the IWM). Even for experienced traders the volatility may be too great for your portfolio. Unless there is breakthrough clinical news or an M&A pick up a consistent rally is unlikely. We will update our review of large cap biopharmaceuticals after Q1 Earnings. Current laggards among the large caps are BIIB and GILD.So what can you do? Here are some guidelines:
- Hold current positions in large cap biopharmaceuticals and the XLV, as healthcare is a defensive position.
- Maintain healthcare as an overweight position through earnings.
- Traders can hold a tiny position in the XBI to track momentum.
- Upcoming earnings should provide guidance and stocks to watch in the coming week are ABT and JNJ.
- Hold a substantial cash position of 10% for re-balancing with rotation.
| PORTFOLIO | ||||||||||
| 2020 | 2020 | 2020 | 2021 | 2022 | ||||||
| Stock/ETF | Ticker | Price | Wgt | Price | Price | 1 year | Price | YTD | ||
| 10/25 | % | 12/31 | % Perf | 12/31/21 | % Perf | 4/15/22 | %Perf | |||
| iShares NAZ Bio | IBB | 136 | 25 | 151.5 | 25.7 | 152.62 | -13.53 | 130.86 | -14.26 | |
| iShares Russell 2k | IWM | 163 | 10 | 196.4 | 18.3 | 222.45 | -10.91 | 198.96 | -10.56 | |
| Merck* | MRK | 80 | 5 | 81.77 | -10 | 76.64 | 19.22 | 86.91 | 13.4 | |
| United Health | UNH | 330 | 15 | 350.7 | 27.19 | 502 | 42.38 | 534.82 | 6.51 | |
| SPDR S&P Bio | XBI | 117 | 5 | 140.8 | 48 | 111.96 | -33.67 | 87.77 | -21.61 | |
| Healthcare SPDR | XLV | 108 | 25 | 113.4 | 14.71 | 140.89 | 16.95 | 138.64 | -1.6 | |
| T.Rowe Hlth Sci | PRHSX | n/a | 5 | 99.65 | n/a | 104 | -4.09 | 95.91 | -7.85 | |
| iShares U.S MedT | IHI | 50 | 10 | 54.83 | 65.85 | -9.51 | 59.52 | 3.79 | ||
| Tracking Comp | COMP | |||||||||
| ARK Genomic | ARKG | 93.26 | 61.24 | -52.64 | 42.37 | -30.81 | ||||
| FIDO Biotech | FBIOX | 25.18 | 19.35 | -25.61 | 16.21 | -16.23 | ytd | |||
| FiIDO MEDtech | FSMEX | 76.15 | 83.18 | -8.13 | 68.62 | -17.5 | ytd | |||
| DOW | DIA | 310 | 363.3 | 2 | 344.29 | -5.24 | ||||
| S&P 500 | SPY | 379 | 475 | -6.4 | 437..79 | -7.83 | ||||
| NASDAQ-100 | QQQ | 315 | 397.85 | -0.57 | 338.43 | -14.94 | ||||
| Top Biopharmas | ||||||||||
| Abbvie | ABBV | 53.27 | 162.31 | 19.87 | ||||||
| Bristol Myers Sq | BMY | 21.47 | 77.51 | 24.31 | ||||||
| Regeneron | REGN | 52.34 | 733 | 16 | ||||||
| Vertex | VRTX | 32.63 | 288 | 31.13 | ||||||