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Healthcare stocks may prevent your portfolio from requiring a health check

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New York (CNN Business)Forget the apple (or Apple) ) One day. Healthcare stocks may help keep investing doctors away.

Apple (AAPL)'s share plummeted by more than 20% this year. Big Tech and other vigorous stocks, FAANG, have been hit hard by concerns over slowing earnings growth and weakening economies. However, many Blue Chip Healthcare stocks haveNasdaqandS&P 500
in thisbear market. } Merck (MRK)and Biotech KingAmgen (AMGN)isDowPharmaceutical supplierMcKesson (MCK), cystic Fibrosis Treatment MakerTop (VRTX), Big Pharma LeaderEli Lilly (} LLY)and the insurance companyCigna (CI)are all winners S&Even with P500. Bristol Myers Squibb(BMY), Lily and Insurance CompanyHumana (HUM)is even close to the highest ever.
Please note that these are also not large stocks of Covid vaccines. Pfizer(PFE),BioNTech (BNTX),Moderna (MRNA)andNovavax ({130) } NVAX)all cooled down in 2022 after enjoying a huge pop last year. Antiviral drug makerGilead(GILD)andRegeneron (REGN)is in the red again this year.

The strong rise in other healthcare stocks is driven by the current business cycle rather than the pandemic. Healthcare stocks can withstand turbulent times well. They are recognized as a stable company that provides the products and services people need in times of recession.

Also, many healthcare leaders pay large dividends and are considerably cheaper than in other markets.

Solita Marcelli, Chief Investment Officer of UBS Global Wealth Management in the Americas, said in a recent report that healthcare is "traded in an attractive assessment of the late cycle environment."

She added that since 2003, global healthcare stocks have tended to outperform the wider market by more than 6% during a downturn in manufacturing. (May ISM Manufacturing Index measurements were the second lowest since May 2020.)

New York Life Investment economist and portfolio strategist Lauren Goodwin said, "As long as economic growth continues, flux Investors need to stick to high quality stocks at the "defensive turn". She specifically mentioned two other sectors known for their large dividends: healthcare, utilities and real estate.

The increase in mergers could further boost the healthcare sector. Pfizer, Bristol Myers Squibb,GSK (GSK)(formerly GlaxoSmithKline) all announce billion-dollar deals this year Did.

Of course there are risks. Depending on the outcome of the midterm elections, healthcare companies may receive more oversight from regulators and politicians. If the Republican Party gains control of the House of Representatives and the Senate, questions may arise about the future of the Affordable Care Act (Obamacare) and what it means for drug prices.

But as long as the Federal Reserve is aggressively raising interest rates and investors continue to worry about inflation, healthcare stocks can withstand whatever happens at Capitol Hill. There is sex.

“There was a flight to quality in the stock market,” said Edward Campbell, co-head of the PGIM Quantitative Solutions multi-asset team. "I'm not surprised to see that more classic defense sectors like healthcare continue to perform well," he said.

All attention to work

Thanks to rate hikes, soaring oil and gas prices, and concerns that the housing market may finally cool down. There is growing concern about a recession. However, the labor market, one of the most important parts of the US economy, remains strong.

Workers are in the proverbial driver's seat, and many companies find it difficult to hire workers in the midst of mass layoffs, so they are ordering a healthy salary. But even the employment market can be poised to eventually turn worse.

The government reports June salaries on Friday. The data summarizes weekly job news for a busy week, including weekly unemployment and monthly reports from payroll company ADP on jobs in the private sector, as well as government job vacancies and turnover (JOLTS) surveys.

Economists predict that 295,000 jobs will be added in June. This is still a healthy amount, but lower than the390,000 jobs earned in Mayand the modified jumps in April 436,000 jobs.

The unemployment rate is expected to be stable at 3.6%, but it could eventually start to rise even higher. Central bank members predict unemployment will end at 3.7% this year, rise to 3.9% next year, and reach 4.1% in 2024, according to forecasts made at the Fed's latest meeting earlier this month. doing.

{195 Of course, it's still historically low. But as wage growth begins to slow, there are concerns that American workers will not be able to keep up with the rampant inflation. The average hourly wage in May increased by 5.2% from 5.5% in April.

Economists, investors and job seekers will carefully monitor June figures to see if wage growth worsens.

Next appointment

Monday:US market closed due to Independence Day

Tuesday:US Factory Orders

Wednesday:USISM Non-Manufacturing Index. Minutes of the Federal Reserve Board from the June meeting

Thursday:ADP Private Sector US work. Weekly US unemployment insurance claims. US JOLTS; Levi Strauss (LEVI)

Revenue from Friday:6 Monthly US Employment Report