Yahoo Finance

We're gonna talk about healthcare today. It has been flying this year, but that has not been the story over the last few years, as you just mentioned. So, I want to compare it to this S&P 500 performance, and to do this, I need to introduce a concept, and this is a definition called relative strength. And this is very general. Generally, relative strength compares the performance of a stock to a sector or an index in order to gauge outperformance or underperformance. So, what we're going to do here is take XLV. That is the Healthcare ETF. Goes all the way back to about the 2000 year, and then we're going to divide that by SPY. SPY is the S&P 500, and this is what we get. So, here we go. All the way back to 1999, and then we can do technical analysis on this ratio. And again, this is XLV divided by SPY. And you can see we got this nice high here out of the .com bust. That's when healthcare was once again leading out of this tech bust. But then we saw a decline into the global financial crisis, another spike. Then we exceeded these highs, got to a new high, and it's been trending down, trending down, trending down into the 2022 bull market when it or excuse me, bear market, when it outperformed again, and then it just fell off a cliff. So, we know that XLV is falling off a cliff relative to healthcare, but we want to see what it is done percentage-wise individually. So here we have XLV versus SPY, but these are individual tickers here that we've charted. So healthcare over the last 25 years, that is actually beating SPY, the S&P 500. 375% to 327 over the last 10 years. Just to show you that time frames matter here, guess what? Healthcare is taken the second place. Uh, the S&P 500 is almost doubled the performance. And then what we really want to find out is what's happened recently. What is happening this year? And you can see healthcare and purple here made a high into late January, made another high in early February, but it's kind of fallen off a little bit, hasn't done much over the last few weeks, but neither has the S&P 500. So, healthcare is retained its status as one of the leaders this year, and we can see this if we track the performance not only since the inauguration, that's what we're showing here, or healthcare in the number two spot to communication services, we can also track it year to date. And now we're actually in third place. Just a few days ago, last week, XLV was in the number one place, but still pretty close. You'll notice that XLC, that's communication services, financials and healthcare, all around 6 7% there. So, I'm gonna close with a few names that are reporting this week, and these are earnings. Uh, it's kind of a task for another day to figure out which of these names and which of the healthcare names are gonna lead this year. But I did want to leave with the notice that we got Gilead. Uh, we've got Humana. We've got, uh, Moderna. And a lot of these names have experienced different performance this year. So you look at Moderna, that's down 22%. Uh, probably no coincidence that some of these smaller stocks are also down, and then the larger ones, these larger names as defensive names, have kind of held up better. So, keeping in mind, healthcare, someplace you might wanna be this year as it goes through this turnaround story, and some of the bigger names probably doing better than some of those smaller ones.