Please Watch My New YouTube Video: Trend of the Week Drug Stocks Aren’t a Safe Haven Anymore
This week’s Trend of the Week is “Drug Stocks Aren’t a Safe Haven Anymore.” Drug stocks seem to have lost their safe haven status. As of September 20, the Health Care Select Sector SPDR ETF (XLV) was down 4.6% in the last month, and Pfizer (PFE) was down 7.55%. Why? Investors who were looking for safe havens may have decided they don’t need them any longer if the volatility continues to not be as bad as expected on the downside. Or many analysts cut their estimates with the signing of the Inflation Reduction Act, which took steps toward drug price negotiations for Medicare and Medicaid. Or since drug stocks have been falling maybe they’re no longer a safe haven. (And yes, that’s circular logic.) Some of the ETF dips can be attributed to one stock: Moderna (down 12.46% in the last month) which is considered by much of the market as a one-trick pony–a Covid stock. However, I’m adding Moderna to the Jubak Picks Volatility Portfolio on September 27 because the company has a pipeline full of new vaccines based on the success of their Covid vaccines. Overall, drug stocks may not be the safe havens that they once were but there are still selective buys in the sector.
