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• US Medical Device ETF (IHI) was flat at the $56 handle in a down market today.
• Tariff risks loom for pharmaceuticals and devices, but by mid-year look manageable, but early in the earnings cycle.
• Overall continues to look defensive because of domestic market stability despite the supply chain impact.

Amidst the tariff chaos, we may get clues from one of the most defensive sectors of the market-healthcare stocks. Recently, we provided a playbook of positions for those actively managing their LIFE SCIENCE portfolios. However, in the midst of tariff chaos and policies targeting various countries lurching weekly, it will be difficult for CEOs to provide forward guidance. But a few large-cap Companies have reported with good outlooks.

A takeaway from economists after the Powell speech was that tariffs will slow growth and that deals need to be made with major countries to prevent a recession. Interest rate cuts cannot help because of the stagflation risk. A big concern would be the supply chain's impact on costs.

The medical device sector has shown sluggish growth since the pandemic, and looks better with innovative new products for cardiology and diabetes.

BDX is another top pick in MEDtech.will report on MAY 1.

On a positive note, Abbott Labs (ABT) beat and raised guidance, and the stock is up over 2%. Abbott will invest $500M in manufacturing and R&D in TX and IL. Tariff impact will hit in Q3. EPS is forecasted at $5.05-5.25. Worldwide Nutritional sales increased 3.2% to $2.14 B. Global DX sales decreased 4.9% QtQ to $ 2.054 B. Medical Device sales increased 9.9% globally.

Johnson and Johnson (JNJ) reported yesterday with quarterly revenues of $25B, consisting of $8.02B in MEDtech and $13.87B in Innovative Medicines, with a total  2025 sales projected at $ 91.8 B. Sales forecast included the recent $15B acquisition of mental illness drug developer Intra-Cellular Therapies. The lead product in this category is Caplyta, a pill that treats bipolar depression and schizophrenia.  On the conference call, the CEO warned that new tariffs will add $400M in costs, and that tax policy would be a better way to build manufacturing capacity in the U.S. Full year EPS is expected to be maintained at 6.2% growth, at $10.50-10.70 per share.

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