May 23, 2019—Four months into 2019 and the S&P 500 is up 17% (price return), making it the seventh best start to the year for the index since 1929. One sector is just barely eking out a positive return: health care. The return spread between health care and the best-performing sector—technology—over just the first four months of the year is a staggering 24%.
There are two main reasons why the health care sector appears to be on life support.
May 17, 2019 – This week’s nearly round trip in stock markets serves as yet another reminder that it is incredibly difficult and misguided to try to predict short-term movements in the financial markets. After a steep -2.5% drop in the S&P 500 on Monday, in response to an escalating trade war between the U.S. and China, the market clawed its way back and was set to close flat on the week as of Thursday afternoon.
May 10, 2019 – President Trump raised tariffs on U.S. imports from China today, as he warned he would this past Sunday on Twitter. Following months of signs that both sides were progressing toward an amicable agreement, that narrative was upended by Trump’s tweet, which vaguely alluded to “attempt[s] to renegotiate” by the Chinese. At first it was not clear whether the president was blustering for bluster’s sake, or if the negotiations had truly hit the rocks.
