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“Harsh reality is always better than false hope.” ― Downton Abbey
Chart of the Day

Good morning!
Healthcare stocks are perhaps one of the hottest trades this year. But investing in them is fraught with potential hiccups.
Out of 11 sectors, the S&P 500’s healthcare sector is the third-best performer this year, adding 4.2%, following behind the utilities sector’s 4.4% gain and energy sector’s 10% increase. In comparison, the overall index has lost 4.2% this year.
However, Health and Human Services Secretary Robert F. Kennedy Jr. has started cutting thousands of jobs from the department, which has led many to wonder if now is the time to rethink the typically dormant sector, which holds just a handful of stars.
The short answer is that it’s notoriously difficult. That’s because it requires investors to closely review the minutiae of drug chemistry, the success rate of drug trials, and human anatomy.
And if that’s not enough, it also takes forever for a typical drug to get approved to be sold, meaning that you could be waiting years to reap the reward of your investments. Industry group PhRMA says it takes 10-15 years on average to develop one new medicine from initial discovery and take it through regulatory approval. The Nasdaq Biotechnology Index, which holds shares of smaller biotech companies, is down 4.1% this year.
Of course, not every company in the healthcare sector is involved with the making of drugs, but the same underlying trends influencing pharma and biotech have an impact on other industries in the sector, too.
Then there’s the obvious question that applies to all sectors, not just healthcare, about what’s next, as investors are always discounting the future.
That’s especially true in the case of Novo Nordisk, which became famous for its Wegovy and Ozempic drugs. For a brief point last year, Novo was Europe’s most valuable company, but its shares finished the year down 15%, conceding that spot to software group SAP, whose shares rose 60% in 2024.
Novo’s sharp losses came after gains of 50% in 2023. This year, its shares have declined 27%, while SAP’s have gained 11%. The drugmaker has struggled to convince investors that it has a big follow-up to its blockbuster GLP-1 anti-obesity drugs.
Sell-side is still bullish on Novo. Out of the 35 analysts surveyed by FactSet, 66% are overweight, 29% are neutral, and 6% are underweight. The average 12-month price target is nearly double where shares finished Tuesday.
The disconnect reflects a bigger underlying trend—investors only care about healthcare during cycles. During the Covid-19 era, shares of vaccine makers shot up, driven by hopes of mass vaccinations, but they promptly came down after those jabs were no longer as important. Pfizer shares rose almost 70% in 2021 but have ended every year down since then.
It’s worth noting that given the recent rally, healthcare shares look expensive compared to historical levels. Companies in the healthcare sector are trading at 17.71 times their projected earnings over the next 12 months, above its 10-year average multiple of 16.51, according to FactSet. The S&P 500, meanwhile, trades at a multiple of 20.25.
Investing in healthcare has its ups and downs, which might be fun for Ph.D. holders in healthcare and other medical professionals but not so much for others.
Share your thoughts
Do you think the healthcare stocks rally still has legs? Click here to send us your response.
Here’s what a reader commented
Question: Do you think the risks of investing in private markets are worth the returns?
Answer: I allude to alts as the great wealth transfer that no one talks about. Instead of boomers transferring their wealth to gen x,z,etc or men to women, it’s the LPs transferring their wealth to the GPs and the IRS. Once you factor in the mgmt/performance fees and taxes, there’s not much of a return to note. The other misleading factor of these private market averages and pitch books I’ve seen over the years are the alt funds (PE, HF, PC, Venture) that the average investor can get access to are nothing in comparison to ones that pensions, endowments and the ultra high net worth get access to. So alts managers preying on the average investor are using data from investments they actually cannot get into. So who are investing in these sub par alts that transfer their wealth from themselves to the GP? It’s for people that like to flaunt their wealth and need to be able to allude to their PE, HF & PC allocations at cocktail parties.
Catch up with FS Insight
As Liberation day approaches, the key question is whether the White House cares how the stock market reacts. We discuss the 6 reasons President Trump wants the stock market to rally post-Liberation Day. And does political affiliation explain why the stock market and bond market disagree?
Technical
Near-term equity index trends remain under pressure despite the brief bounce attempt near mid-March lows. While it’s difficult to call for a low in equities, most technical indicators seem to suggest lows are quite close and should happen in the month of April.
Crypto
We break down why the latest PMI print could be bearish for crypto, why the market’s ability to shake it off is encouraging, and how the options market continues to price in caution ahead of tomorrow’s big announcement.
News We’re Following
Breaking News
- Wisconsin and Florida elections provide early warning signs to Trump and Republicans AP
- The four goals of Liberation Day — and whether they’ll work SEM
Markets and economy
- Tariffs will likely raise much less money than White House projects, economists say CNBC
- The FDA Is ‘Finished’ as Firings Sweep Health Agencies. Drug Stocks Are Falling. BR
- Trump’s unpopularity abroad may dent U.S. growth, Goldman Sachs economists say QZ
Business
- Hims & Hers shares rise as company adds new weight-loss medications to platform CNBC
- Intel’s new CEO is known to ‘underpromise and overdeliver.’ Can he do it again? MW
- Tesla Stock Drops on Delivery Day. Watch for This Number as Markets Brace for the Worst. BR
- Meta’s Head of AI Research to Leave as Chatbot Hits New Markets BR
Politics
- U.S. Looks for More Countries to Take Migrants WSJ
- With a nod to America’s civil rights legacy, Sen. Cory Booker makes a mark of his own AP
- US Attorney General directs prosecutors to seek death penalty in UnitedHealthcare CEO murder case SEM
Overseas
- Brazil Looks Like a Winner in the Global Trade War WSJ
- China’s New Barges Could Make a Tough Task Easier: Invading Taiwan NYT
Of Interest
- A Canadian Company’s Tariff ‘Double Whammy’ Highlights Trouble for the Economy NYT
Overnight |
S&P Futures -15
point(s) (-0.3%
) Overnight range: -22 to +21 point(s) |
APAC |
Nikkei +0.28%
Topix -0.43% China SHCOMP +0.05% Hang Seng -0.02% Korea -0.62% Singapore -0.37% Australia +0.12% India +0.76% Taiwan +0.08% |
Europe |
Stoxx 50 -0.41%
Stoxx 600 -0.62% FTSE 100 -0.63% DAX -0.88% CAC 40 -0.37% Italy -0.56% IBEX +0.24% |
FX |
Dollar Index (DXY) -0.11%
to 104.14 EUR/USD +0.12% to 1.0806 GBP/USD +0.19% to 1.2947 USD/JPY -0.05% to 149.54 USD/CNY +0.01% to 7.2706 USD/CNH -0.04% to 7.2781 USD/CHF +0.02% to 0.8839 USD/CAD +0.03% to 1.4308 AUD/USD +0.56% to 0.6313 |
Crypto |
BTC -0.19%
to 85085.73 ETH -1.7% to 1880.63 XRP -0.69% to 2.125 Cardano +0.25% to 0.6822 Solana -0.52% to 125.79 Avalanche -2.2% to 19.38 Dogecoin -0.52% to 0.1719 Chainlink -4.17% to 13.61 |
Commodities and Others |
VIX +2.8%
to 22.38 WTI Crude +0.03% to 71.22 Brent Crude -0.05% to 74.45 Nat Gas +0.48% to 3.97 RBOB Gas +0.2% to 2.307 Heating Oil +0.33% to 2.296 Gold +0.51% to 3129.18 Silver +0.97% to 34.02 Copper +0.89% to 5.08 |
US Treasuries |
1M -1.3bps
to 4.2942% 3M -0.8bps to 4.2833% 6M +1.0bps to 4.2053% 12M -0.6bps to 4.0006% 2Y -0.4bps to 3.8769% 5Y -0.7bps to 3.9182% 7Y -0.5bps to 4.0344% 10Y -0.2bps to 4.1669% 20Y +0.2bps to 4.5617% 30Y +0.5bps to 4.5288% |
UST Term Structure |
2Y-3
M Spread narrowed 1.9bps to -44.5
bps 10Y-2 Y Spread widened 0.4bps to 28.8 bps 30Y-10 Y Spread widened 0.7bps to 36.0 bps |
Yesterday's Recap |
SPX +0.38%
SPX Eq Wt +0.1% NASDAQ 100 +0.82% NASDAQ Comp +0.87% Russell Midcap +0.39% R2k +0.02% R1k Value -0.08% R1k Growth +0.86% R2k Value +0.02% R2k Growth +0.01% FANG+ +1.3% Semis +0.48% Software +1.49% Biotech -3.63% Regional Banks -0.76% SPX GICS1 Sorted: Cons Disc +1.14% Comm Srvcs +1.02% Tech +0.95% Indu +0.6% Energy +0.58% SPX +0.38% Materials +0.32% Utes +0.3% Cons Staples +0.28% REITs +0.09% Fin -0.16% Healthcare -1.75% |
USD HY OaS |
All Sectors -1.8bp
to 388bp All Sectors ex-Energy -2.9bp to 352bp Cons Disc -0.7bp to 378bp Indu -3.8bp to 290bp Tech -4.4bp to 399bp Comm Srvcs -1.8bp to 576bp Materials -1.1bp to 360bp Energy +2.4bp to 388bp Fin Snr -2.9bp to 325bp Fin Sub -0.4bp to 242bp Cons Staples -3.6bp to 271bp Healthcare -6.0bp to 407bp Utes -3.8bp to 266bp * |
Date | Time | Description | Estimate | Last |
---|---|---|---|---|
4/2 | 10AM | Feb F Durable Gds Orders | 0.9 | 0.9 |
4/3 | 8:30AM | Feb Trade Balance | -123.5 | -131.382 |
4/3 | 9:45AM | Mar F S&P Srvcs PMI | 54.2 | 54.3 |
4/3 | 10AM | Mar ISM Srvcs PMI | 52.9 | 53.5 |
4/4 | 8:30AM | Mar AHE m/m | 0.3 | 0.3 |
4/4 | 8:30AM | Mar Unemployment Rate | 4.1 | 4.1 |
4/4 | 8:30AM | Mar Non-farm Payrolls | 140.0 | 151.0 |
4/8 | 6AM | Mar Small Biz Optimisum | n/a | 100.7 |