Healthcare Sector Is Lagging As We Enter 2022 Earnings Season
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Healthcare Sector Is Lagging in 2023
- Small Cap Biotech has momentum but large-cap biopharma lags.
- Technology and Semiconductors lead the market in 2023.
- Upcoming earnings could be pivotal
We are in the foggy zone between JPM23 and earnings season so it is hard to forecast healthcare and biotech stocks performance. We can gauge technicals and trade major life science ETFs. The healthcare sector is perceived as defensive but in 2023 there is more investor appetite for risk based on the QQQs comeback and the XBI strength. Healthcare lags in 2023 while semiconductors are ho with the SMH is up 15% YTD.
(Click on image to enlarge)
(Click on image to enlarge)
The market is still clouded by the Fed’s determination to raise rates and keep money tight. The next Fed Meeting is in February and expectations are for a 0.25% rate increase. In the meantime, many economists and strategists are expecting a mild recession. Earnings and guidance will be telling
Here are some trends to watch based on the data and recent trading.
- Based on my trades and other momentum indicators- ARKG, XBI- the small-cap rally should continue through January.
- Large cap biopharma sold off from JPM23 week. That is expected since they led throughout 2022.
- MedTech sector is improving: FSMEX, IHI.
- The IBB looks better than the XLV for non-traders.
- Key Earnings and guidance to watch over the next 2 weeks: DHR 1/24, TMO, ABT 1/25, 2/1, HOLX 2/1, BDX 2/2, ILMN 2/7, MRNA 2/22, large-cap biopharma on 2/2, VRTX 2/7,
- Two large cap biopharma stocks are included in the Investors Business Daily IBD Big Cap 20 rankings: #1 Vertex Pharmaceuticals (VRTX) and #4 BioMarin Pharmaceutical (BMRN).
Model | |||||||||||
PORTFOLIO | |||||||||||
2020 | 2020 | 2020 | 2021 | 2022 | 2023 | ||||||
Stock/ETF | Ticker | Price | Wgt | Price | Price | P | 1Y | Price | YTD | ||
10/25 | % | 12/31 | % Perf | 12/31/21 | 12/31/22 | %Perf | 1/22 | % Perf | |||
iShares NAZ Bio | IBB* | 136 | 15 | 151.5 | 25.7 | 152.62 | 130.55 | 3.69 | 135.47 | 3.18 | |
iShares Russell 2k | IWM | 163 | 10 | 196.4 | 18.3 | 222.45 | 174.36 | -7.83 | 185 | 6.13 | |
Merck* | MRK | 80 | 10 | 81.77 | -10 | 76.64 | 110.81 | 36.15 | 109.94 | -0.91 | |
United Health | UNH | 330 | 20 | 350.7 | 27.19 | 502 | 530.27 | 5.12 | 486,72 | -8.2 | |
SPDR S&P Bio | XBI | 117 | 10 | 140.8 | 48 | 111.96 | 83 | -5.41 | 86.99 | 4.81 | |
Healthcare SPDR | XLV | 108 | 25 | 113.4 | 14.71 | 140.89 | 135.88 | 2.39 | 133.91 | -1.43 | |
T.Rowe Hlth Sci | PRHSX | n/a | 5 | 99.65 | n/a | 104 | 89 | -0.81 | 90.15 | 0.37 | |
iShares U.S MedT | IHI | 50 | 5 | 54.83 | 65.85 | 52.57 | -8.86 | 54.54 | 3.75 | ||
MedTech* | ABT | new | 5 | 123.5 | 127.46 | 109.83 | -9.53 | 112.82 | 2.76 | ||
Tracking Comp | |||||||||||
ARK Genomic | ARKG | 93.26 | 61.24 | 28.23 | -31.97 | 32.49 | 15.09 | ||||
Direx3X Bull | LABU | 7.66 | -58.91 | 7.84 | 10.89 | ||||||
FIDO Biotech | FBIOX | 25.18 | 19.35 | 16.04 | 4.21 | 16.57 | 1.78 | ||||
FIDO MEDtech | FSMEX | 76.15 | 83.18 | 61.58 | -10.39 | 64.28 | 4.38 | ||||
DOW | DIA | 310 | 363.32 | 331.34 | -3.93 | 333.67 | 0.71 | ||||
S&P 500 | SPY | 379 | 475 | 382.41 | -11.39 | 395.88 | 3.52 | ||||
NASDAQ-100 | QQQ | 315 | 397.85 | 266.33 | -21.85 | 282.68 | 6.16 | ||||
Top Biopharmas | |||||||||||
Abbvie | ABBV | 161.64 | 12.45 | 149.59 | -7.44 | ||||||
Bristol Myers Sq | BMY | 71.58 | 14.82 | 74.15 | 3.06 | ||||||
Gilead Sci | GILD | 85.39 | 22.42 | 83.01 | (3.31) | ||||||
Eli Lilly | LLY | 362.94 | 42.34 | 346.07 | -5.4 | ||||||
Merck | MRK | 110.94 | 36.15 | 109.94 | -0.91 | ||||||
Regeneron | REGN | 721.7 | 17.52 | 722 | 0 | ||||||
Vertex | VRTX | 288.78 | 35.53 | 309.84 | 7.29 |
More By This Author:
J.P.Morgan Healthcare Conference JPM23: Biotech Rally Favors Smaller CapsNice Gains During JPM23 Week: Benign CPI Report Brings Hope For A “Soft Landing”
Healthcare Portfolio Is Doing Well But Biotech Stocks Are Mired In Macro
Disclosure: long ABT, ABBV, IWM, IHI, MRK, PRHSX, UNH, VRTX, XBI.