Sector Shift Stalls Healthcare Stocks But Biotech Shows Gains In January

By Rod Raynovitch of Raygent.com

Monday, January 30, 2023 7:19 PM EDT

Stethoscope, Hospital, Doctor, Health, Medicine

Image Source: Pixabay

Healthcare stocks were weak last week with the XLV down 2.2% YTD.
Small cap biotech stocks remain frothy with good gains.
Trading this week can be perilous ahead of Fed and major earnings reports.

Last week saw big 4% gains in the Nasdaq-100 (QQQ)and Infotech stocks aa swell as major sectors across the board. Our big winners in 2022 have reversed and are weak in 2023 with ABBV down 9.68% and MRK down 4.3% YTD. Concerns about sales growth from blockbuster drugs such as Humira from Abbvie and Keytruda from Merck curbed buyers. But Abbvie did a good job at JPM23 showing how the Company expanded their pipeline. UNH also took a 10% hit since mid -December on downgrades and earnings revisions. But all three stocks remain core holdings longer term in a healthcare portfolio. Our recent small cap trades are shown in this post show big gains from 2022.

Biotech stocks are off to a great start in 2023 with the IBB up 4.5% and the XBI up 7.7%. Small cap speculative life science stocks have made big run-ups in 2023 maybe because of tax selling late in 2022 and expectations of less aggressive Fed after this weeks’ 0.25% rate rise. Some macro analysts have cautioned traders on speculation in these stocks saying Powell might actually call them out!! The problem with Fed Meetings is the Q&A where maestro Powell may go off script and create volatility in the markets.

Stocks are weak across the screen today but GE Healthcare was up over 3% to $72 level today the spinout from parent GE doing very well since JPM23. Keep in the back of your mind that the Biden Administration has a plan in September to target companies for excessive pricing through legislation. Regeneron (REGN) was down 1% today despite news on Dupixent and an upgrade by Cowen with targets in mid $800s.

We are all annoyed by it but yes its all about a “soft landing” and the Fed.

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	1/28	% Perf

iShares NAZ Bio	IBB*	136	20	151.5	25.7	152.62	130.55	10.96	137.23	4.52

iShares Russell 2k	IWM	163	10	196.4	18.3	222.45	174.36	-1	189.58	8.73
Merck*	MRK	80	10	81.77	-10	76.64	110.81	30.78	105.38	-5.02
United Health	UNH	330	20	350.7	27.19	502	530.27	5.3	486.05	-8.32
SPDR S&P Bio	XBI	117	10	140.8	48	111.96	83	4.54	89.39	7.7
Healthcare SPDR	XLV	108	20	113.4	14.71	140.89	135.88	3.9	132.86	-2.2
T.Rowe Hlth Sci	PRHSX	n/a	5	99.65	n/a	104	89	3.71	90.08	0.29
iShares U.S MedT	IHI	50	5	54.83		65.85	52.57	-4.15	54.06	2.83
MedTech*	ABT	new	5	123.5		127.46	109.83	-8.71	109.95	0.15

Tracking Comp

ARK Genomic	ARKG			93.26		61.24	28.23	-22.57	34	20.65
Direx3X Bull	LABU						7.66	-43.94	8.51	20.37
FIDO Biotech	FBIOX			25.18		19.35	16.04	10.95	16.82	3.32
FiIDO MEDtech	FSMEX			76.15		83.18	61.58	-5.14	63.88	3.73
DOW	DIA			310		363.32	331.34	-0.57	339.61	2.5
S&P 500	SPY			379		475	382.41	-5.93	405.68	6.08
NASDAQ-100	QQQ			315		397.85	266.33	-13.15	296.26	11.26

Top Biopharmas

Abbvie	ABBV						161.64	7.58	146.28	(9..49)
Bristol Myers Sq	BMY						71.58	13.45	72.45	(0.690
Gilead Sci	GILD						85.39	24.47	83.73	-2.47
Eli Lilly	LLY						362.94	44.52	342.1	-6.49
Merck	MRK						110.94	30.78	105.38	-5.02
Regeneron	REGN						721.7	22.03	742.83	-2.96
Vertex	VRTX						288.78	40.85	321.45	11.31

More By This Author:

Healthcare Sector Is Lagging As We Enter 2022 Earnings Season
J.P.Morgan Healthcare Conference JPM23: Biotech Rally Favors Smaller Caps
Nice Gains During JPM23 Week: Benign CPI Report Brings Hope For A “Soft Landing”

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Sector Shift Stalls Healthcare Stocks But Biotech Shows Gains In January

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