{"id":6490,"date":"2016-11-25T22:56:52","date_gmt":"2016-11-25T22:56:52","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=6490"},"modified":"2016-11-26T14:02:42","modified_gmt":"2016-11-26T14:02:42","slug":"whats-up-with-the-health-care-sector-investors-fleeing-defensive-sectors","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=6490","title":{"rendered":"What&#8217;s Up With the Health Care Sector &#8211; Investors Fleeing Defensive Sectors ?"},"content":{"rendered":"<p>The Health Care sector rally that started with President-elect Trump&#8217;s victory on November 8th, and the defeat of Proposition 61 in California, has fizzled out before the Financial and &#8220;return-to-global-growth&#8221; rally within other sectors like Basic Materials, etc.<\/p>\n<p>Given the surprise announcement around Eli-Lilly and their Alzheimer&#8217;s drug on Wednesday, sending the stock down $10, I thought readers would want to be updated on Health Care sector earnings for Q4 &#8217;16 and 2017:<\/p>\n<p><em><strong>Q4 &#8217;16 expected Health Care sector earnings growth<\/strong><\/em><\/p>\n<ul>\n<li><em><strong>11\/25\/16:<\/strong> <\/em>\u00a0+5.7%<\/li>\n<li><em><strong>11\/23\/16:<\/strong><\/em> +5.9%<\/li>\n<li><em><strong>11\/18\/16<\/strong><\/em>: +5.9%<\/li>\n<li><em><strong>11\/11\/16:<\/strong><\/em> +5.9%<\/li>\n<li><em><strong>11\/4\/16:<\/strong><\/em> +6.4%<\/li>\n<li><em><strong>10\/28\/16:<\/strong><\/em> +8.1%<\/li>\n<li><em><strong>10\/21\/16:<\/strong><\/em> +8.1%<\/li>\n<li><em><strong>10\/14\/16:<\/strong><\/em> +8.3%<\/li>\n<li><em><strong>10\/7\/16:<\/strong><\/em> +8.4%<\/li>\n<li><em><strong>9\/30\/16:<\/strong><\/em> +8.3%<\/li>\n<\/ul>\n<p>This is a pretty normal downward revision pattern for a coming quarter for Health Care.<\/p>\n<p><em><strong>2017 expected Health Care sector earnings growth:\u00a0<\/strong><\/em><\/p>\n<ul>\n<li><em><strong>11\/25\/16: <\/strong><\/em>+8.6%<\/li>\n<li><em><strong>10\/1\/16: <\/strong><\/em>+10.1%<\/li>\n<\/ul>\n<p><em><strong>Analysis \/ conclusion: <\/strong><\/em>The health care sector has been written about previously, <a href=\"https:\/\/fundamentalis.com\/?p=6429\">here<\/a> and <a href=\"https:\/\/fundamentalis.com\/?p=6386\">here<\/a>. Our positions havent changed with a sector underweight, and the largest single position being Pfizer (PFE), which looks due for a bounce, Biotech is technically in good shape, but stopped rallying a few days after the election.<\/p>\n<p>Health Care could become a victim of the &#8220;relative value&#8221; or &#8220;relative earnings growth&#8221; syndome: as one sector that has been a leader in the weaker, low-return markets of the last few years, it could be that investors are rotating out of Health Care into sectors like Financial&#8217;s and Basic Materials, as these sectors will benefit directly from specific growth initiatives of the new President and Administration.<\/p>\n<p>The fact is Health Care has more defensive characteristics, and with a full-on economic growth agenda being planned, that consistent, stable earnings growth may not be as valued as it was in a no-growth environment.<\/p>\n<p>The IBB (biotech ETF) remains technically intact while the IHE looks to be in better shape than the PPH, although the PPH ETF will be given more time. A heavy-volume trade through, and close below $50 and the PPH would likely sold.<\/p>\n<p>Readers will be updated again near year-end 2016.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Health Care sector rally that started with President-elect Trump&#8217;s victory on November 8th, and the defeat of Proposition 61&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[164],"tags":[],"class_list":["post-6490","post","type-post","status-publish","format-standard","hentry","category-health-care-sector"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6490","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6490"}],"version-history":[{"count":4,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6490\/revisions"}],"predecessor-version":[{"id":6497,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6490\/revisions\/6497"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}