Tough Slogging Ahead For Investors, Diversification Is Important

Tough Slogging Ahead But Healthcare Stocks Should Be OK

  • Stocks down about 2% (as of 12:50 P EST) with talk of price targets coming down. S&P at 4240.
  • COWEN Healthcare Conference should provide trading opportunities.
  • Bear market malaise.

The war in Ukraine will dominate the news this week with its impact on energy prices and the commodity markets. Sanctions are hitting the Russian economy hard with some in Congress pushing for more sanctions on Russia for oil and gas exports the primary source of hard currency. But Germany needs Russian gas, Uncertain geopolitical times lie aheadLast week commodities soared led by wheat and corn, crude and gasoline with copper silver and gold all among top winners . The Bloomberg Commodity Index rose 13% and the S&P 500 energy sector rose 9.26%. The S&P 500 Healthcare sector was up 1.17%. Clearly, disruptions caused by the war as well as post-pandemic inflation are behind market volatility and sector rotation.

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The weighting of energy in the S&P is still very low about 4%. This will certainly go higher as energy stocks soar. Technology is about 27% and Healthcare is about 14%.

Chairman Powell has committed to a 0.25% Fed rate increase for this round with quarter-point increases ahead. But some Fed watchers think concerns about being ‘behind the curve” with inflation will be swayed by the need for liquidity in a war economy. Nonetheless, rates are going up.

Speculative small/mid-cap biotech stocks hit new lows this past week with the XBI at a “triple bottom” about the $84 level only 10 points above the March 2020 lows.

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The Cowen Healthcare Conference is this week so expect news and a boost to selective stocks. We will update healthcare stocks tomorrow. Notable Movers up as of 11:45 EST: CRSP, EVH, LGND. MDGL, SGEN, SRPT

IBB down 0.9% at $121, XBI flat at $84,

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