Health Care Sector Ahead of SCOTUS Ruling

With less than a half hour to go before the Supreme Court issues its ruling on Obamacare, it is somewhat surprising to see just how well Health Care sector stocks have been performing relative to the S&P 500.  The chart below shows the relative strength of the S&P 500 Health Care sector versus the S&P 500 over the last year.  When the line is rising, it indicates that the sector is outperforming the S&P 500 and vice versa.  

As shown in the chart below, the relative strength of the Health Care sector is currently at its highest levels in more than a year.  It is often said that uncertainty is the number one enemy of the stock market, but don't tell that to investors in the Health Care sector!

While the S&P 500 Health Care sector has been outperforming the S&P 500 in recent weeks, on an absolute basis, the performance has not been so great.  As shown in the table below, just 19 stocks in the sector are currently positive for the second quarter.  Edwards Lifesciences (EW) leads the sector with a gain of 40%, and is followed by Biogen (BIIB) and Perrigo (PRGO), which are the only two stocks in the sector up by double digits.  It will be interesting to see how these stocks perform post 10 AM, but one thing you can probably count on is much more volatility.

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