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Two biopharma stocks to consider outside of Moderna
Two biopharma stocks to consider outside of Moderna

Yahoo

time7 days ago

  • Business
  • Yahoo

Two biopharma stocks to consider outside of Moderna

Moderna (MRNA) shares are seeing a boost on Monday after the US Food and Drug Administration (FDA) gave the pharmaceutical giant limited approval for its lower-dose COVID-19 vaccine. Morgan Stanley Investment Management portfolio manager Jason Kritzer shares his perspective on the pharmaceutical industry amid pushback from the Trump administration's Department of Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr. Kritzer also weighs in on pet drug manufacturer Zoetis (ZTS). To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Moderna shares moving to the upside today, the FDA granting the company limited approval for its lower dose COVID-19 vaccine. This coming as the pharmaceutical industry has been under pressure, facing fractured relationship with HHS head RFK Jr., as well as tariff policy risks more broadly. Our next guest names two key areas of opportunity for investors in the healthcare space. Joining us now, Jason Kreitzer, Morgan Stanley Investment Management portfolio manager. Jason, great to speak with you this morning. Obviously, as we mentioned, a lot of headwinds for the pharmaceutical industry. What is giving you some optimism about how pharma stocks could do in the second half of the year right now? Sure. Well, we're we're trying to focus on areas where there's less attention that the administration has. Uh, medical devices and animal health are two areas that uh, really are kind of avoiding a lot of the spotlight, uh, from an administration perspective. Um, you know, if you look at healthcare, it's been very, very volatile this year. Uh, bottom of the leaderboard, uh, in terms of performance in the S&P from the S&P sector perspective. So, uh, trying to find areas where, uh, there are opportunities. On the medical device side, we're we really like, uh, Intuitive Surgical. This is a robotic surgery company. Uh, this is a very cool company that it's um, very uh, innovative in terms of its, uh, uh, design of its new products which are helping surgeons basically become better, better at their job. Uh, the addressable market for the uh, for the Da Vinci five, which is their new, uh, their new robot, it's had about eight million global procedures. Uh, and this is in neurology, general surgery, gynecology. The company's procedure growth is in the 13 to 16% range. That's volume growth. We don't really see that kind of growth in uh, in healthcare and so this has been a terrific long-term compounder. Um, you know, in the other areas, uh, we really like uh, animal health. Um, Zoetus is a uh, leader in uh, in the both companion animal, which is pet and livestock space. Um, for the last 10 years, Zoetus has grown above market. And that has been um, a core to that thesis, really has been their innovation. They're very large in uh, pain, in flea and tick and uh, also in dermatology. Pain is more recently. Uh, there are 27 million dogs under the care of uh, vets in the US that have um, osteoarthritis and their pain medicine is uh, really just scratching the surface. They're only uh, attributed uh, sales that space to about a million dogs. Yeah. been a lot of questions in the uh, in the market about, uh, uh, drug pricing uh, in human health. Um, keep in mind, there's no Medicare. There's no doggy Medicare, so from that perspective, uh, you know, we like animal health. Yeah, I thought that was a really interesting framework, Jason. Is animal health investing a way to be Washington-proofing your health portfolio right now? We think so. We think so. I mean, you know, really, if you look at, it's a cash pay market. As I mentioned, no Medicare. Um, as we all know, people love their pets and will be, uh, willing to spend a lot on their pets sort of out of pocket. And so while no, uh, sector is completely immune to economic, uh, uncertainties, uh, the pet market is, is one that's, you know, very exciting. And my guest host, Jay Woods, has a question for you, Jason. Hey Jason, I I think you're on to something big there. The ETF pause, PAWZ is a conglomerate of all those uh, stocks. And you mentioned Zoetis, you may have already answered most of this question, but why does that stand out? Uh, because there are other options within the pet insurance sector. Uh, was it the livestock side of it? What was the thing that stuck out the most to you about Zoetis? Well, if you think about uh, Zoetis, Zoetis was a was a spin about uh, 12 years ago out of Pfizer. And their roots are really in on the innovation side on the animal health rather than on the livestock. They do, they are a leader in livestock. Um, and so their, uh, innovation engine is really what's attractive. They are coming out with new medicines for pets that um, have um, great outcomes. And that is really fueling their growth and you know, they're an above market grower, um, which has made it uh, attractive to us. Jason, really appreciate your time this morning. Thank you so much. Thank you. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Strong earnings keep stock-market bulls in charge. What could bring the rally to a halt?
Strong earnings keep stock-market bulls in charge. What could bring the rally to a halt?

Yahoo

time20-05-2025

  • Business
  • Yahoo

Strong earnings keep stock-market bulls in charge. What could bring the rally to a halt?

U.S. stocks have mounted a strong comeback, with the S&P 500 and the Dow Jones Industrial Average wiping out their 2025 losses last week. But lurking behind that optimism is one of the market's old problems: Stocks are pricey once again. Within just a few weeks, investors went from trimming exposure to risky assets to chasing the relief rally on solid first-quarter earnings and easing trade tensions between the U.S. and some of its major trading partners. As a result, stocks are back to being expensive, which raises questions about how far this rally can really go from here. 'They will drown you too': My coworker found out I inherited money — and harassed me to give him a loan Recession indicators are out of control. When will this madness end? My husband will inherit $180K. I think we should invest the money. He wants to pay off his $168K mortgage. Who's right? My wife and I paid off my stepdaughter's $415K mortgage in exchange for her house, but it's now worth $310K. Should we sue? I'm 57 and ready to retire next year on $7,500 a month, but my wife says no. Who's right? The forward price-to-earnings (P/E) multiple of the S&P 500 SPX, calculated by dividing its current price by Wall Street analysts' consensus estimate for its earnings per share (EPS) for the next 12 months, surged to 21.5 as of Thursday afternoon, from 18.02 on April 8. The forward P/E ratio was also at the highest level since Feb. 28, and above the five-year average of 20.25, according to Dow Jones Market Data. U.S. stocks on Friday wrapped up a strong week on Wall Street as investors breathed a sign of relief after officials from Washington and Beijing agreed on a 90-day pause in their tariffs, easing concerns that escalating global trade tensions could hurt the world's two largest economies. What's more, a batch of softer-than-expected inflation data also showed tariff policies haven't added to price pressure in the U.S. economy — at least for now. Also see: Stock futures fall after Moody's strips U.S. of its top credit rating The S&P 500 rose 5.3% last week, while the Dow DJIA jumped 3.4%, after both indexes clawed back to positive territory for the year to seal a stunning comeback just over a month after they had tumbled to recent lows amid President Donald Trump's aggressive and far-reaching tariff plans. The tech-heavy Nasdaq Composite COMP also popped 7.2% to score its best week since April 11, according to Dow Jones Market Data. 'A lot of this rally was short-covered by hedge funds and institutions that were very convinced that the economy was in trouble and the market was going down,' said Andrew Slimmon, head of applied equity advisors and lead senior portfolio manager at Morgan Stanley Investment Management. But in fact, the solid first-quarter earnings from American companies showed 'the fundamentals looking backwards didn't validate,' he told MarketWatch in a phone interview. Indeed, with 92% of the S&P 500 companies releasing quarterly results as of Friday, 78% of which have reported a positive EPS surprise, while 62% of which have reported a positive revenue surprise. The blended annual earnings growth rate for the S&P 500 in the first quarter is 13.6%, which marks the second-straight quarter of double-digit earnings growth reported by the large-cap benchmark index, according to FactSet data. See: The 'Magnificent Seven' are back in the stock market's driver's seat — but are they still a buy? Despite the widespread earnings beats in the first quarter, Wall Street analysts still seem to be spooked by what company management said on the conference calls about the rampant uncertainty and pessimism on how Trump's tariff policies could squeeze corporate profit margins. Of all the companies that conducted earnings conference calls over the past month, 411 have cited the term 'tariff' or 'tariffs' during their calls for the first quarter. This marks the highest number of the S&P 500 companies commenting on tariffs on quarterly earnings calls over the past 10 years, according to FactSet data. As a result, full-year earnings expectations for the S&P 500 have softened over the past month, with Wall Street now seeing the 2025 consensus EPS estimate at around $263.40, down from $271.05 in mid-March, according to FactSet data. See the problem here? An elevated forward P/E multiple combined with downgrades to earnings expectations for the S&P 500 suggests stock prices are becoming even more stretched. Adding to the concern is the tension between stocks and the U.S. government debt, which has resurfaced as Treasury yields gained traction last week with the 10-year rate BX:TMUBMUSD10Y on Monday breaking the 4.5%-level for the first time since February. The yield on the 30-year Treasury bond BX:TMUBMUSD30Y also hovered right below the 5%-level, threatening to hurt the stock market's return. Despite backing off slightly from those levels on Friday, both the 10- and 30-year yields still rose over 6 basis points last week. It was the largest weekly yield gain since April 11, according to Dow Jones Market Data. See: Powell signals return toward inflation-first strategy However, the high valuation of the S&P 500 may also suggest that the U.S. economy is expected to avoid a recession, according to Yardeni Research. 'Usually in recessions, the forward P/E of the S&P 500 falls into the single digits. It hasn't done so this time because the stock market isn't pricing in a recession. Neither are industry analysts, according to their latest EPS estimates,' said a team of Yardeni's strategists led by Ed Yardeni, president and chief investment strategist. 'During the previous bear market, the forward P/E bottomed at 15.1 on October 22, 2022. That too was a relatively high P/E and occurred because the most widely anticipated recession of all times was a no-show,' they said. 'History may already be repeating itself in the performance of the stock market and the economy so far this year.' See: Stock-market recovery suggests equities must fall this far to spark a 'Trump put' or pivot Another way to assess the health of the economy is through the lens of consumer strength. Last week, retail giant Walmart Inc.'s WMT quarterly results beat Wall Street estimates on every key metric, but the company will still push prices higher because they said they are not able to absorb all the pressure 'given the reality of narrow retail margins.' 'There's consumer pressure and consumers have been through a really difficult inflationary period,' said Marta Norton, chief investment strategist at Empower. 'There's enough discernment in the consumer that companies need to be careful in pricing.' That makes earnings from other major retailers some of the key market-moving events this week in an otherwise quiet calendar on the economic data front. Home Depot Inc. HD is due to report its quarterly result on Tuesday before the opening bell, followed by Lowe's Companies, Inc. LOW and Target Corporation TGT on Wednesday morning. It's worth noting some of the consumer stocks — much like Big Tech — have already traded at pretty lofty levels. The S&P 500's consumer staples sectorXX:SP500.30 is one of the top performers among the large-cap index's 11 sectors this year, up 6% while the S&P 500 has risen 1.3% year to date, according to FactSet data. 'Investors who turn to these areas for defensiveness might find that there's very little margin of safety for those types of consumer companies,' Norton told MarketWatch via phone on Thursday. 'That doesn't mean they won't do well if markets collapse, but I have less enthusiasm about their future given where their valuations are.' Bond yields jump after Moody's downgrade of U.S. credit. Why it matters for consumers — and Congress. My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? The U.S. just lost its last pristine credit rating. What that means for markets. My husband and I spend more money on our daughter and her family than on my single son. Do we compensate him? Sign in to access your portfolio

Wall Street banks say EMs' wasted years are over
Wall Street banks say EMs' wasted years are over

Time of India

time19-05-2025

  • Business
  • Time of India

Wall Street banks say EMs' wasted years are over

New York: Wall Street's emerging-market faithful are finally seeing better returns after missing out for years as US stocks soared. Morgan Stanley Investment Management, AQR Capital Management , Bank of America and Franklin Templeton are among those betting the tables may finally be turning in favour of developing-market equities. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like If You Eat Ginger Everyday for 1 Month This is What Happens Tips and Tricks Undo Bank of America's Michael Hartnett calls them "the next bull market." AQR predicts they'll deliver local-currency returns of almost 6% annually in the coming five to 10 years, outpacing a 4% gain for US shares in dollars. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Despite the S&P 500's rebound of recent weeks, the gauge was flat on the year as of Friday's close, while an emerging-market equivalent is up 10%. The gain is kindling hopes that a decade and a half of thwarted promise - in which the US benchmark rocketed more than 400% versus a meager 7% advance for developing-nation shares - could be at an end. Among the reasons: a struggling dollar, rollercoaster S&P and questions over the safe-haven status of Treasuries, all of which have investors increasingly looking away from the US as President Donald Trump's trade war takes off. Live Events Concerns about ballooning debt and deficits, which prompted Moody's Ratings on Friday to downgrade the US credit rating, add to the headwinds for continued US market outperformance. Some investors seeking alternatives to the US market have headed to the Japanese yen, German bunds and euro, but those willing to accept a bit more risk are rethinking the practice of yanking cash from emerging markets and pushing it into the US at moments of stress. 'The depreciation risk of the US dollar is a wake-up call for investors,' said Christy Tan, an investment strategist at Franklin Templeton, who touts developing-nation debt as an alternative to US Treasuries. 'We think the US exceptionalism is over for the time being.' Agencies The dollar's four-month slump through April means the local-currency gains cited by AQR get a boost when they're converted back into the greenback. MSCI Inc.'s benchmark emerging-market currency index hit a record at the start of May after gaining about 5% this year. 'Finally now we have the catalyst,' said Jitania Kandhari, deputy chief investment officer at Morgan Stanley Investment Management, who declared two years ago that the era of emerging markets had arrived as she switched from US to EM stocks. She's more confident this time round: based on historical averages, the dollar's weakening can contribute to one third of EM equity returns, she said. Having failed to match the US stock market in the past two years, her fund has returned 17% this year, beating 97% of peers, according to data compiled by Bloomberg. Debt Burdens Now Kandhari's digging deeper, looking for stocks in banking, electrification, health and defense that are exposed to local demand, and therefore less vulnerable to higher tariffs. At AQR, Managing Director Chris Doheny is turning his attention to emerging-market companies with a smaller capitalization that he predicts will perform well in the medium to long-term. Inflows to US-listed ETFs that invest across emerging markets, as well as those that target specific countries, totaled $1.84 billion in the week ended May 9, more than double the previous week's amount, according to data compiled by Bloomberg. To be sure, market reversals, political upheavals and local crises are a baked-in feature of the EM asset class, and the gains this year could yet stumble. Spotty earnings growth in some developing nations compared with those of the US and other developed markets in addition to transaction costs also give pause to some investors. 'On the one hand, emerging market GDP is growing faster than developed market, but the real issue is recurring earnings growth,' said Michael Bailey, director of research at Fulton Breakefield Broenniman. 'One long term example is China, where the economy is growing quickly, but many times Chinese companies issue so much stock that earnings growth disappoints, compared to the US and non-US developed,' he said. 'India is another compelling emerging market in theory, but it can be hard to access with high transaction costs, and long term returns have been similar to the S&P 500.' And so far, the shift from the US to emerging markets isn't showing up in broader capital flow data, while appetite for European assets is, according to Gabriela Santos, JPMorgan Asset Management's chief market strategist for the Americas. But if the dollar continues to weaken 'then that second step could spill over to emerging markets in a positive way,' she said. Compared with some of the larger emerging markets, the US looks constrained in terms of what it can do to bolster the economy as its outstanding debt rises toward $30 trillion. Countries including India and the Philippines already moved fast with aggressive rate cuts, while the Federal Reserve is wary of easing too aggressively in case it reignites inflation. 'The fundamentals of major emerging markets are robust, characterized by lower external debt and favorable debt-to-GDP ratios,' Franklin Templeton's Tan said, citing Turkey, Saudi Arabia, South Korea, and several Asian nations. 'This low debt profile is a significant draw, especially when compared to the US.'

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