Inside today’s issue:
- This is no time for investors to panic
- The best place in America to make money? Health care stocks exhibit extraordinary relative strength as the broad market struggles.
- Tech supergiant Google reaches a new all-time high as it moves ahead in the AI race.
- Bitcoin puts in a bottom near $85,000. We bet it rallies from here.
The Best Place in America to Make Money? Health Care Stocks Exhibit Extraordinary Relative Strength as the Broad Market Struggles
Typically, November is a great month for stocks. Since 1927, November has been positive 59% of the time. It’s part of the traditionally positive end-of-year period for markets.
That historical tendency hasn’t held up well this year. The S&P 500 has declined as much as 4% this month. As I pointed out on Friday, some high-growth, high-risk stocks have declined by more than 20% this month.
The overall market’s weakness has garnered plenty of press recently. What hasn’t garnered much press – but should – is the extraordinary relative strength of the health care sector.
Last week, as losses filled Wall Street trading screens, a wide variety of health care-related stocks and ETFs reached new 1-year highs.
On October 1st, I sent a note to colleagues that highlighted the bullish upside breakout in the world’s largest health care ETF, the Health Care Select Sector SPDR Fund (XLV). This fund owns a diversified basket of drug makers, hospital operators, and medical device makers. Since then, this trend has been your friend. XLV reached a new 1-year high last week.
Biotechnology stocks are also ripping. The SPDR Biotech fund (XBI) – which holds small-cap biotech companies – reached a new 1-year high last week.
The iShares Biotech Fund (IBB) – which holds large biotech stocks – broke out to a new 1-year high last week.
As for Big Pharma, it’s a bull market in taking pills. The Invesco Dynamic Pharmaceuticals ETF (PJP) reached a new high last week.
Senior living-related real estate firms are having a great November. Senior living giants Welltower (WELL) and Ventas (VTR) reached new 1-year highs last week. The world’s largest medical device maker by revenue, Medtronic (MDT), reached a 1-year high last week. America’s largest hospital operator, HCA Healthcare (HCA), reached a new 1-year high last week.
What’s going on here?
Why is health care climbing while the market is dropping?
The health care sector has a gale-force tailwind in its favor. The giant Baby Boomer generation is in the stage of life where spending on health care and longevity skyrockets. At least once a month, the typical Boomer goes to a health care facility to have something looked at, tested, fixed, or removed. It’s raining money on a lot of health care businesses.
During times of broad market weakness, I like to look and see what stocks, ETFs, and themes are holding steady or advancing. It’s a “stress test.”
If the market drops 3%, you want to see what drops just 1%. If the market drops 2%, you want to see what climbs 1%. That sort of thing. This is often referred to as “relative strength.” It allows you to spot the safer megatrends for investment.
It’s like looking at a beachfront neighborhood after a hurricane. Some homes lost their roofs, and some were blown away. But there are some homes unbothered by the storm. Those are the strongest homes.
It’s not getting much attention, but I believe the strong performance of the health care complex in a weak overall market is one of the most significant financial events of 2025.
Knowing why a market should go up is one thing… but it’s a heck of a lot more important to have the market agree with you. The market agrees with the Boomer health care bull case. It’s an opportunity-filled bull market.
Market Notes
- Tech supergiant Google (GOOG) soared 5% today to reach a new all-time high. The company’s latest AI model, Gemini 3, is getting strong reviews, which could spell big trouble for Google competitor OpenAI and its ambitious spending plans.
- The $80,000–$85,000 range is the one to watch for Bitcoin. The leading cryptocurrency bottomed there over the weekend. Bulls have a “toehold” from which to stage a bullish run. The chief driver of Bitcoin — global financial liquidity — is still flowing and is set to continue.
- The market value of Cummins (CMI) reached an all-time high today. Cummins is the world’s largest maker of high-horsepower diesel engines. These engines power trucks, bulldozers, generators, cranes, and excavators. A new high for Cummins is a good sign for the global economy.
- With a big gain of 33.7% over the past three months, the SPDR Biotech ETF (XBI) is at the top of our Trend Leaderboard.
The Trend Leaderboard
Top performing trends of the past 3 months
