3 Safe Healthcare Stocks To Ride Out The Current Volatility

Medic, Hospital, Laboratory, Medical, Health, Doctor

The continued rise in yields has spooked investors, leading to a week of wild market swings. Investors should consider Johnson & Johnson (JNJ), Novartis (NVS), and Fresenius Medical Care (FMS).

Hold onto your seats because the market is getting bumpy. But there is a way to navigate these choppy waters. 

Thanks to the Fed, stocks are rising and falling more than a roller-coaster at Six Flags. While we ended on a positive note today with gains across the board, the week has been anything but uneventful. Even today started on a sour note after investors assessed another jump in Treasury yields. 

Since I expect this volatility to continue, I think investors should consider safe and stable stocks such as Johnson & Johnson (JNJ - Get Rating), Novartis AG  (NVS - Get Rating), and Fresenius Medical Care (FMS - Get Rating).  But before I get into evaluating those stocks, let’s recap this eventful week.

Market Commentary

Monday started with a bang as stocks rallied after a tough week. They got a boost as bond yields dropped following a rapid rise. The yield on the 10-year Treasury was down to 1.46%, from a high of 1.55% last week. Also helping matters was the passage of the $1.9 trillion COVID-19 relief package by the U.S. House of Representatives and JNJ’s single-shot COVID-19 vaccine receiving emergency use authorization by the FDA.

The excitement didn’t last, though, as concerns over rising bond yields remained on investors’ minds. The market was down modestly lower on Tuesday. A warning from China’s top banking regulator that stock market rallies looked like bubbles didn’t help matters. Stocks fell again on Wednesday as rising Treasury yields led to a selloff in tech stocks, with the Nasdaq Composite shedding 2.7%.

Things didn’t get any better on Thursday as the tech selloff worsened. Interest rates spiked after Federal Reserve Chairman Jerome Powell reiterated that the Fed is unlikely to alter its policy until it sees inflation rise sustainably. The 10-year Treasury yield rose to 1.54%. Today looked like it would be a repeat of the past three days as technology stocks briefly hit correction territory, with the Nasdaq Composite extending its losses over 10%. But U.S. stock indexes finished sharply higher Friday after a strong jobs report.

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