Summing Up The Week
With good economic growth reports from China, you’d think it would be a good week for the markets… and you’d be mostly right.
The healthcare sector is in the throes of a full on cardiac arrest as Democrats and Republicans seem to be uniting on revitalizing the way the U.S. handles healthcare. The Dems are scaring the sector the most, with potential presidential candidates waving the “Medicare for All” banner.
And where goes healthcare goes the indexes, and that direction is down…
There was quite a bit of other news despite the shortened trading week (thank you, Good Friday!) so read on to learn more!
Barr Summarizes Mueller Report, Shrugs
Attorney General William Barr summarized a redacted version of special counsel Robert Mueller’s report investigating whether Trump and his campaign obstructed justice during a press conference on Thursday, reported by CNBC.
The report identifies 10 different “episodes” of potential questionable behavior on the part of Trump and his associates. Barr said the Justice Department “had to” determine whether or not those episodes constitute criminal action.
Basically, the big news is that we have no real news on the Trump situation.
China says, “It’s sunny skies here!”
China reported first-quarter Gross Domestic Profit (GDP) growth of 6.4% on Tuesday, beating the Street’s expectations of 6.3% according to CNBC.
Although this growth is a good sign for the global economy, many analysts (and politicians) take China’s numbers with a grain of salt as some theorize the Chinese government may fudge the numbers to look like “the place to be” in the global economy.
Does “Medicare for All” mean “Profits for None?”
UnitedHealth (UNH) and the rest of the healthcare sector continued to get devastated this week as investors ran for the hills with drug pricing reform and “Medicare for All” proposals raining down from Washington, reported CNBC on Wednesday.
As a point of reference, UNH has dropped more than -20% since its February high of $272.49, and Vanguard’s Healthcare Sector ETF (VHT) dropped nearly -10% from its March $176.30 high.
Is this huge pullback a buying opportunity or a harbinger of bad things to come?
Survey says… Global Investors Worried
A survey by Bank of America and Merril Lynch indicates that global fund managers haven’t been this down on growth in almost three years with 66% expecting poor growth with little to no inflation, reported CNBC on Tuesday.
Funds are betting against European stocks by shorting them, however they’re buying into big-cap U.S. and Chinese stocks including Amazon (AMZN) and Alibaba (BABA).
On the bright side, the majority (53%) believe the U.S. Federal Reserve is done raising interest rates for this cycle. Of course, the reason the investors believe that is because they also believe we’re in for a period of slow-to-no economic growth.
Next Week’s Gameplan
Since the overall market outside of healthcare seems to continue to ever-so-slowly grind higher, we’re regularly updating our trading plan to reflect this fact.
For any healthcare sector investments, however, we’re battening down the hatches and setting buy orders to Buy in Stages at extreme lower levels (think 2009 Financial Crisis levels) as this sector downturn could be very bad for quite some time (the November 2020 election is a long time away).
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Bitcoin’s been eerily quiet for the past six days…
Bitcoin Price (in USD)
Bitcoin Price Action
Bitcoin and the rest of the cryptocurrency space have held up quite well for the past week with a weekly low of $4,945.54 and a high set on Thursday of $5,318.18 However, when has this sector ever been quiet and steady?
Crypto in the News
Binance to De-List Bitcoin Cash SV?
Binance – a popular crypto trading exchange – announced that it would be de-listing Bitcoin Cash SV five months following the Bitcoin Cash fork that resulted in two separate coins – Bitcoin Cash ABC and Bitcoin Cash SV, according to Forbes magazine. Given that Coinbase never listed Bitcoin Cash SV following the fork deciding instead to only list Bitcoin Cash ABC, this move was relatively unsurprising.
In its entire history, Bitcoin has never jumped 20% and entered such overbought conditions without pulling back significantly – sometimes as much as 50% – before heading higher, even in the throes of a bull market.
Given that we’ve seen only a 12.9% pullback since Bitcoin rallied to its current levels when it dropped from $5,345 to its weekly low of $4,778, we have no interest to get in to any trades, yet.
Until Bitcoin dramatically cools off its Daily oversold RSI levels, we’d prefer to miss out on further upside rather than expose ourselves to serious losses.