Health Care Is Strong But Is Feeling LonelySeptember 30, 2014
The health care sector has undeniably been the stock market leader over the past four years. Looking at the Developed Markets (DM) and Emerging Markets (EM) together, the health care sector has returned 122.4% over the past four years. Besting, the second place consumer discretionary sector by over 22%. If we separate EM and DM, health care remains on the top of leaderboard for DM and near the top for EM. DM health care sector is up 129.4% over the past four years and EM health care is up over 89%, behind the consumer discretionary sector for best performing sector.
Emerging and Developed Markets Combined Performance
Developed Markets Performance
Emerging Markets Performance
Year-to-date, health care stocks have remained strong returning 12.7% in DM (versus just 2% return for the average stock). However, the health care sector is starting to be the last leg for this bull market to stand on, especially in the Developed Markets. Only 48% of stocks in the MSCI World index are trading above its 200-day moving average (MA). We say only because this is the fewest number trading above its 200-day MA since November 2012. In Europe, only 24% of stocks are trading above its 200-day MA. However, if we look at just European health care stocks 68% of stocks are trading above its 200-day MA. Overall, 74% of all MSCI World Index health stocks are trading above its 200-day MA. No other sector in the MSCI World Index has more than 53% trading above its 200-day MA and six sectors are below 50%. In Europe, no other sector has more than 38% trading above its 200-day MA and there are three sectors, Materials, Energy and Industrials where less than 20% of the stocks are trading above its 200-day MA.
MSCI North America