Image Source: PixabayPivotal Week Coming Up-Can Healthcare Stocks Overcome MACRO Headwinds?

The upcoming quarter GDP is expected to hit 3.7% which has brought the FED dialogue to “higher rates for longer” which might lead us to a recession in 2024. So watch the yield on the 10-year TSY now at 4.924% but needs to stay below the 5% range. Lately, the market moves down on higher TSY yield which also reacts to the dollar and geopolitical events. But if GDP is tracking higher that could be better for stocks.Now that we seem to be “free” from the policy issues of Medicare pricing the healthcare market can turn to earnings, products, and trends within subsectors. The hot issue affecting many stocks is the huge impact of diabetes and obesity drugs. Now that the pandemic is in the rearview mirror, vaccines and diagnostics revenues are lagging and medical procedures are apparently reduced because of weight loss drugs. So we have two major sectors within healthcare with more limited growth. The current earnings reports should help clarify these trends. Lilly (LLY) stock is up 59.81% YTD, Novo Nordisk (NVO) is up 42.29% YTD while important MedTech ETF (IHI) Is down 12.25% YTD.  So we have the biggest Health/Science technology sectors represented in funds big losers in 2023: FSMEX down 13% YTD and PRHSX down 6.13% YTD.Some stocks that we have mentioned recently for new buys are ABT, BDX, BSX, and GEHC. We recently summarized our focus stocks that should be in a diversified Healthcare Portfolio.Two stocks on our Focus list that are reporting this week are Abbvie (ABBV) and Merck (MRK). Both stocks offer good entry points and good value but have had issues lately that should be clarified in earnings reports.It would seem that M&A would be a catalyst to get traction in SMID biotech stocks. You can look at a  portfolio we posted earlier in the year when there was some momentum.  We lightened up small caps in FEBRUARY. Until we get through earnings and this period of uncertainty stick with domestically oriented large-cap stocks like providers (UNH) and large-cap drug stocks which can still be impacted by higher rates.Technicals at the cusp of S&P500 4200More By This Author:Healthcare Portfolio Focus Stocks
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