Market Insight 09/27/2016

Last night people around the globe watched the presidential debate in the U.S. As most presidential races have done, this year is no exception. Fed as expected did not raise interest rate and showed no sign for November but signalled that there is a high possibility for a rate hike in December (depending on the outcome of the election)

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On March 1st, Donald Trump won Super Tuesday with a sweep. On May 3rd, Ted Cruz dropped out of the race. On July 18th, RNC went more fluently than one had expected it to do.

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(Market Q, 09/27/2016)

Above is the 1 year chart, market was not really reactive towards Trump candidacy as a Republican nominee.

 

Lifelong goal of Hillary Clinton’s healthcare started politically in 1993. Hillary Clinton is the future of Obamacare. Investors are very catious towards healthcare stocks when it comes to Hillary Clinton. From August, JNJ, the biggest healthcare stock, has been on a downtrend. For past few weeks, JNJ has been hitting 120 moving average.

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(Market Q, 09/27/2016)

The above chart of JNJ tells the whole story.

 

Is it just JNJ, a single healthcare stock, that has been dropping from August. The answer would be No. XLV, one of the biggest health care etfs has been on the same track.

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(Market Q, 09/27/2016)

The question might be asked why have they started to fall from August. It is because both Republican and Democratic conventions were finished at the end of July. Moreover, the actual head to head polls became more real. In other words, before convention, although it was clear that the presidential race was going to be Trump vs Hillary, polls were less thought provokative. People and polls become more real once the specifics are fixed.

 

Investors should approach healthcare stocks with an extreme caution.

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