Why the prognosis for healthcare stocks is uncertain ahead of Congress’ new makeup — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Healthcare stocks face an uncertain near-term outlook as Democrats prepare to take Congress, with Mizuho’s Jared Holz attributing the caution to likely gridlock and little policy action over the next couple of years.
- Jared Holz advised investors to pick individual names rather than own everything, pointing to medtech because pharma has traded more expensively than tech for the first time in 20 years.
- State Street Health Care Select ETF (XLV) jumped 3% in one day after Election Day as all healthcare categories rose together, an unusual pattern Holz said left some of the gains looking overdone.
- Democrats’ retention of the Senate and House, together with a Democratic White House win in 2028, formed the scenario Holz linked to rolled-back Trump-era strategies and better healthcare performance.
- Medical-device stocks at or near multi-year lows were Holz’s preferred pick if regulation from the past couple of years is reversed, although he doubted that reversal would happen in the near term.
- State Street Health Care Select ETF ended virtually flat for the week after being caught in Thursday’s Wall Street sell-off, but remained about 32% above its level when Trump took office in January 2025 and beat the S&P 500 by nearly 9 percentage points.
Why it matters: For healthcare investors, likely gridlock leaves no major policy catalyst over the next couple of years, while pharma’s first trading premium to tech in 20 years prompted Holz to back away from the group. His medtech preference makes stock selection, not a broad healthcare allocation, the immediate decision.
Ask SkimNews
