A reduction in the rate of drug price increases, and in the case of generics, outright price cuts, is a blessing for the S&P managed care industry. Cost inflation had been perking up, but should ease in the coming quarters as drug…

The health care sector is poised to resume its bull market, but the character of the rally will change. Sell hospitals and buy biotech.

The previous Insight showed that broad macro conditions point to a reduction in managed care risk premiums. This outlook brightens further when considering recent cost inflation trends. The latest inflation reports showed that the cost…

Health insurance equities are on the cusp of breaking out to new all-time highs relative to the broad market, despite the headwinds facing any net creditor, namely low running yields. The macro tide is turning decisively in favor of…

Last week we added the overall health care sector to our high-conviction overweight list, given our confidence that defensive sectors will continue to outperform the broad market on a cyclical basis, regardless of the latter's near-…

Equities are back in overshoot territory. We added the health care sector to our high-conviction overweight list, boosted managed care to overweight and put health care equipment on downgrade alert. Buy cable stocks.

Against a backdrop of defensive sector outperformance, our bearish call on the S&P managed care index has reduced odds of playing out. Our thesis was that when overall health care spending is accelerating, as is currently the case,…

Economic disappointment represents a serious obstacle for stocks. Stay with non-cyclical plays, including telecom services and health care. Upgrade the managed care group, and stay clear of banks, regardless of cheap valuations.