Market Mixes It Up With A Broad Rally

Laboratory Test Tubes

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  • Bull Run in Technology Shares Bring in Laggards-financials, Industrials, healthcare.
  • MACRO Narrative  Improves With Debt Ceiling Bipartisan Deal and Expectations of a Fed pause.
  • Small Caps Lead the Way in Technicals-Recovery Underway.

A major concern for the market was modulated last week with a bipartisan debt deal. Then on Friday, the jobs report exceeded expectations signaling strong hiring while other data showed less inflation. Major stock indices were strong boosting the Dow and cyclical stocks. Some called it a “Goldilocks” scenario. Many analysts have pointed to the divergent performance of the top 7-10 large-cap Nasdaq stocks so a broad rally is important in the context of the U.S. economy. The Nasdaq 100 is up 33% YTD! The risk of recession may be lessened in the intermediate term.

Biotech stocks remain sluggish but the longer-term outlook for breakthrough therapies - gene therapy, obesity, CNS, RNA - remain positive. ASCO reports and data are streaming in this week offering support to new products in immuno-oncology.  But we are way off the 2021 highs in the bellwether XBI so stock picking is important. and some bis underlying concerns remain such as drug pricing legislation (Inflation Reduction Act), slowdown in M&A due to FTC posture, and higher interest rates (2 yr treasury yields rose to 4.501%). With yields of 5%+ available why risk new equity plays?

XBI vs IWM vs XLV

(Click on image to enlarge)

SMID Cap stocks were leaders last week with the IJR up 3.07%, the IWM up 3.26%, and the IJH up 2.57%. These moves were more reflected of the general market but did help biotech momentum like the XBI up 3.45% to $86.43 for the week. Our SMID Life Science Portfolio initiated on 1/20/23 saw some big winners: ABOS, EVH, GERN, PACB, and VCYT. With Wm Blair, Jeffries and Goldman-Sachs Healthcare  Conferences this month for updates some of these stocks: PACB, QDEL, SUPN, VCYT. Caution as volatility is high.

    P 1/20/23 % Perf 2/4/23     6/3/23 Perf      
Company Ticker $   P % week % Perf P Week % YTD % 1 yr  
                       
Acumen Therapy ABOS NEW 5/8/23 5.29     5.17 6.6 4.26 46.46  
CRSPR Therap CRSP 49.61 -25 55.27 4.72 -15 65 1.8 59.9 6.56  
Cryoport CYRX 21.75 -42.34 25.24 9.41 -33 19.64 2.99 13.2 -26.63  
Evolent Health EVH 30.83 13.74 31.96 2.21 17.91 31.03 6.67 10.51 1.5  
Geron GERN 3.19 9.24 3.22 3.59 10.27 3.6 15 48.76 170.68  
Hologic HOLX 79.66 22.41 84.68 2.28 30.14 79.06 0.7 5.68 4.04  
Pacific Biosci PACB 11.29 55.68 11.58 -1.7 59.67 13.49 12.7 64.91 140.89  
Quidel/Ortho QDEL 88.13 -11.56 89.7 3.93 -9.98 86.16 1.7 0.57 -6.94  
Supernus SUPN 40.3 12.3 41.61 2.29 15.95 33.53 -6 19.28  
Veracyte VCYT 24.89 39.43 26.67 2.46 49.41 26.72 4.83 12.6 46.57  
SPDR Biotech XBI 86.99 14.75 90.39 1.12 19.24 86.43 3.45 4.13 25.68  
                       
wildcard                      
Invitae NVTA 2.555 2.62 3.15 0.67 1.07 -0.93 -42.47 -69.94  
                       
              6/3/23     1 yr  
iShares CoreS&P IJR           97.06 4.3 2.56 -5.74  
iShares Russell IWM           182.02 4.51 4.31 -3.57  
iShares BIO IBB           128..98 1.69 -1.76 10.85  
NASDAQ-100 QQQ           354.6 4.39 33.19 12.81  
HealthcareSPDR XLV           130.32 1.98 -4.07 (0..79)  
Energy SPDR XLE           79.9 1.04 -8.65 -9.55  
T.RowePrice PRHSX           90.47 0.72 4.67  
iShares MED Dev IHI           50.43 1.79 2.78 -1.04

More By This Author:

Rotation Out Of Healthcare And Biotech Stocks: Age Of Disruption?
A Good Week For The Market But A Pause In The Biotech Rally
Time To Play Small Cap Life Science Stocks

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