| Last year, the entire biotech sector was a major laggard. For instance, look at these returns.... Biotech: Major Laggard in 2023 - SPDR S&P Biotech ETF (XBI) gained only +7.6% in 2023
- iShares Biotechnology ETF (IBB) gained only +3.8% in 2023
- SPDR S&P Pharmaceuticals ETF (XPH) gained only +1.6% in 2023
As you can see, all of these top biotech funds severely underperformed the S&P 500's gain of +24%. Why? Fed Rate Hikes Since so many biotech firms borrow capital for research and development - when the Fed is aggressively raising rates - money gets expensive - and cash-burning biotech companies get crushed. But guess what? Here in 2024, we're expecting Fed rate cuts. This could be the trigger for biotech to bounce back hard. After a year of under-performance, the VanEck Biotech ETF BBH is now starting to poke above $168. If this can continue, and it stays above this year-long resistance level - that could be an early indication that higher prices are coming. YOUR ACTION PLAN Now that we're entering into a Fed rate-cutting cycle here in 2024, this could offer biotech the time to shine. And with a series of high-profile earnings reports scheduled for this week, now could be the time to start that upside swing. After an under-performance in 2023, I fully expect a stronger 2024 - which is why I'm already starting to get my War Room traders positioned for a big biotech year. If you'd like to join us inside The War Room to trade this biotech resurgence, you're invited to join our elite trading community. Yes! Tell Me More About The War Room |
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