CRBP - Biotech Stocks 2024 Second Half Outlook - Buy Biotechs

2024-07-09 07:00:00 ET

Summary

• Biotech indexes lagged broader market indexes in the first half of 2024, and trade at the same level as in early 2022.
• Biotech valuations are closely tied to the Fed's interest rate policy and are highly correlated to the 10-year yield.
• Inflation is likely to trend lower, and, along with rising unemployment, should persuade the Fed to cut rates this year in September.
• An attractive opportunity for biotechs at the turn of an interest rate cycle that augurs well for above market returns over 2024 and beyond.

Biotech Pulse

During the first half of 2024, biotechnology indexes lagged as broader market indexes reached new highs. The Nasdaq ( QQQ ) and S&P 500 ( SPY ) indexes increased by 18% and 15%, respectively. The Nasdaq Biotechnology Index ( IBB ) rose by 1%, the S&P Biotechnology Index ( XBI ) increased by 3%, while the Prudent Biotech model portfolio lagged behind these indexes....

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