Healthcare Stocks Are Coming On Strong In July Led By Biotech


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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 is 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 Monday. 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)   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)  n eerily looking like the interminable JNJ talc debacle though not in scope.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 its a big 2 weeks of data with weaker seasonality for the market ahead.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                                                                                  

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