Biotech Stocks Slip into a Red Screen Day -investors are Distracted By Geopolitics and AI
- Most large cap biopharmas are taking a 1% hit-are LLY and JNJ bubbles or over-owned?
- Large cap tech stocks dominant recently: MAGS up 3.77% for week, 7.35% for the month.
- XBI down over 4% today , IBB down 1.93% and IWM down 1.7%.
The message this week from both the UN Conference and the Bond Market is to be more cautious about the market and pay attention to AI with a lot of grumbling and policy issues about data centers. And some Giant IPOs are coming up like Anthropic in November.These global meetings like the UN can cast a long shadow. Energy prices are up with the crude up 4% and Trump considering an export ban on diesel which is up 80% in 2026. The energy sector has taken the lead today with the XLE up almost 1% after being down 2.59% for the past week.although the technology sector is still the leader with the XLK up 6.2% for the week. The healthcare and biotech markets could be a good place to hide from the macro volatility, assuming the oil and rising rates pose a problem for equities.
Meanwhile the bond market continues to crimp equities with yields rising: 2 year 4.89%, 5 year at 4.997,10 year at 5.11% highest since 2007.
Large cap biopharma stocks were also weak today probably because of rising yields, but Vertex (VRTX) and Pfizer ( PFE) yield of 6.16%,were up and our recent new pick Biogen (BIIB ) was up 0.96% and 5% MTD.
The only 2 green stocks I see on our SMID focus list are Ilumina (ILMN) 255 up 3.2% at $255 and Veracyte (VCYT) up !% at $43.82. But most of our picks in genomics are at or near their 2026 highs: Guardant Health (GH), Natera (NTRA) and Twist Biosciences (TWST). SMID biotech stocks should rally at the end of Q4 because of seasonality, deal news and M&A.
As for the meeting with Trump and XI pundits are not expecting any big deals except maybe a communication protocol on AI safety. What the US needs is help from China with Iran and opening up crude at the Straits of Hormuz, but that is highly unlikely.
Healthcare news items:
- Anthropic announced today that its Claude model helped discover a novel enzyme system with properties reminiscent of mechanisms in gene editing technology CRSPR. CRSP was down over 5%
- Roche (RHHBY) announced a Phase 3 study for sefaxersen showing clinically meaningful reductions I proteinuria and inhibits complement factor B production, a key driver of IgAN-related kidney disease
- Also in the Biotech news lately, (see WSJ pB4 9/23) and likely to have more tomorrow with the Trump/Xi Meeting is the increasing number of licensing deals between China and the US. US companies see China as an R&D source for new products, but others see it as China gaining an edge because of our cutbacks n R&D.
