Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Risk-Off After Trump, Pharma Gets Murdered

By London Capital Group (Jasper Lawler)Market OverviewJan 13, 2017 06:20
uk.investing.com/analysis/risk-off-after-trump,-pharma-gets-murdered-200172303
Risk-Off After Trump, Pharma Gets Murdered
By London Capital Group (Jasper Lawler)   |  Jan 13, 2017 06:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Risk-off after Trump presser rant

Far from being the catalyst for the next leg higher in the ‘Trump rally’, The Donald’s press conference seems to have called a temporary top. The publishing of the unsubstantiated intelligence dossier seemed to have rattled the President-elect and probably shifted the emphasis of the presser. Markets were waiting for “pro-growth” Trump and they got “fake news” Trump. Stocks markets were mostly lower while traditional havens like gold and the Japanese yen rose in response.

All is not lost though. Not talking about fiscal stimulus on this occasion, doesn’t mean it’s cancelled. We view the sell-off as direct response to the specific comments targeting defence and pharmaceutical companies, rather than a general loss of confidence in the pro-growth agenda. If one can look through Trump’s bluster, higher infrastructure spending, given America’s high debt levels, would be much more sustainable if the government can broker better deals in areas such as healthcare and defence.

Pharma stocks get murdered

The sentence “They’re getting away with murder” was all it took to see healthcare stocks in the US then Europe plummet. Donald Trump’s views on the pharmaceutical industry were thought to be more tempered than Hillary Clinton’s. The focus on the industry during the presser came out of left-field.

A few high profile price gauging cases meant the momentum had already been building for a crackdown on high drug prices. If the rhetoric follows through to action, Donald Trump has just made the pharmaceutical industry as a group un-investable. At least from a US standpoint, biotech led the last bull market so a rule of thumb is that it was never going to lead the ‘Trump rally’, should it continue.

European-listed drug makers weren’t saved the pain. The likes of Shire (LON:SHP), Hikma (LON:HIK) and AstraZeneca (LON:AZN) in the UK as well as Bayer (LON:0P6S) in Germany all dropped in sympathy with industry peers in the US. The healthcare companies in Europe are typically global in nature and quite interconnected with the US so Trump’s comments bodes ill for the sector.

A retail earnings onslaught

An onslaught of Christmas updates from top UK retailers, almost all of which surprised to the upside shielded UK stocks from a generally risk-off tone following Donald Trump’s first press conference. M&S (LON:MKS), John Lewis (LON:JLH), Tesco (LON:TSCO), Debenhams (LON:DEB), JD Sports (LON:JD), Supergroup (LON:SGP), ABF (LON:ABF) and Ao World (LON:AO) were amongst those reporting.

Risk-Off After Trump, Pharma Gets Murdered
 

Related Articles

Risk-Off After Trump, Pharma Gets Murdered

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email