Health Care
Highlights Portfolio Strategy Five key drivers - late cycle dynamics, likelihood of pricing power regulatory relief, the rising U.S. dollar, firming operating metrics and investor and analyst capitulation- all suggest that it no longer pays to be bearish the S&P pharma and S&P biotech…
Neutral Relative share price gains for the S&P managed health care index are nearly exhausted. In Tuesday's Weekly Report, we acted on our late-March downgrade alert and took profits of 28% versus the S&P 500 since inception. At the margin, macro drivers have turned from a tailwind to…
Highlights Portfolio Strategy A near-term pullback in U.S. Treasury yields, still robust housing fundamentals and compelling valuations that reflect most, if not all, of the bad homebuilding news and offset thorny input cost inflation, entice us to lift the S&P homebuilding index to…
As with all bull markets, the question on investors' minds has never been if it would end but when it will end as the former is a certainty and the latter is the source of alpha. We have previously noted that by almost all measures, this is the longest bull market in history1 and, with its age…
Neutral The S&P health care equipment (HCE) index has caught a bid recently, reflecting the sector's strong profit momentum, following nearly a decade of decline (second panel). We fear, however, that investors have become somewhat overzealous as the run up in stock prices has dramatically…
Highlights Key Portfolio Highlights Our portfolio positioning remains firmly behind cyclicals over defensives, driven principally by our key 2018 investment themes: synchronized global capex growth (Chart 1A) and higher interest rates on the back of a pickup in inflation (Chart 1B). The…
Highlights Portfolio Strategy The reward/risk profile of air freight & logistics is extremely attractive. Synchronized global growth, the capex upcycle, a falling dollar and secular advance in e-commerce compel us to add this unloved transportation sub-index to our high-conviction…
Highlights The global economic mini-cycle is set to weaken while the euro is set to grind higher. Upgrade Telecoms to overweight. Also overweight Healthcare and Airlines. Underweight Banks, Basic Materials and Energy. Overweight France, Ireland, U.K., Switzerland and Denmark. Underweight…
Overweight The managed health sector was shaken up this week with the announcement of another mega-merger, this time with Cigna buying the last major independent prescription benefits manager (PBM), Express Scripts, for $67 billion. This transaction follows the pending blockbuster acquisition…