A Volatile January for Financials, Healthcare

Did i not tell you that January's going to be volatile? This week proved that beyond any doubt... bad week for the market, with almost every sector treading 1-2% down. With good news from Genzyme (GENZ), Celgene (CELG), Isis (ISIS) and others, Healthcare did repay our trust amidst this troubled economy. And, the winner among all losers? - Financials!

Though they have not seen any significant correction given the beating they have taken over the past 2 months, Financials did bounce back. Despite good gains Friday for MBIA (MBI) & Ambac (ABK) (bond insurers), Citigroup (C), Wachovia (WB), Merrill Lynch (MER), E-Trade (ETFC) and others, this sector has still taken way too much of a beating in the last 30 days.

FINANCIALS

Let's see how Financials did in the last 30 days:

MBIA (MBI) down 48% - market over-reaction to bond insurers.

ETrade (ETFC) down 25% - short sellers galore; last past 3 days did see some counter-action!

American Express (AXP) down 18% - Isn't lower guidance natural in this market?

JPMorgan (JPM), Bank of America (BAC), Citi (C), Wachovia (WB) all down 9%-11%!

Goldman Sachs (GS) down 7% - Why on earth punish GS?

Notable exceptions: State Street (STT) up 6% - diversified business model with strong custodial services business.

Fannie Mae (FNM) - more of a correction; its still down 44% past 3 months! Though there would be more volatility this month, hold on to Financials and note entry opportunities! It's hard to believe any market crash can take out 26% of value from Bank of America and 40% from Citi!

HEALTHCARE

As expected, Healthcare beat the market tide. Let's see how some marquee names did over the past 30 days:

Humana (HUM) up 10% - Healthcare services will hold against the slow down.

Genzyme (GENZ) up 7% - biotech holds strong. Not very sensitive to economic cycles.

Pfizer (PFE) up 1% - Note this one - its going to go a long way. Still down 5% over past 90 days!

Notable 30 days losers are Amgen (AMGN) down 5% & United Healthcare down 3%.

Hold on to big Pharma names, load up PFE.

Among others, beware of Commodities like Goldcorp (GG), Newmont Mining (NEM), Oil like Exxon Mobil (XOM), Chevron (CVX). Stay away unless you want a wild ride! And, remember to hold tight through the January roller coaster!

Disclosure: None.

Comments

[Georealist]

This IS self congratulatory garbage...you told us what??? This is a compendium of vague generalizations ("load up on PFE???") and after the fact nosense...

[tyrantofwallstreet]

Well so far you are correct but there are other sections of the market taking hits like technology, all that it would appear that they will be getting positive gains in the upcoming month. Although I would like to note your comment about Goldman Sachs, with the big boost in the investment banking market, GS is almost back to 200. Will it last, only time will tell with a crazy market like this.

[sunrises]

is it advisable to sell cvx at 2-3% loss prior to earning report?

[PromodRadhakrishnan]

sun rising: Sorry, didn't see your question. Now that the event's over, i hope you did exit. Oil this year might not have a good run.