Is this the best-performing sector following rate cuts?

On Wednesday, the Federal Reserve slashed interest rates by 50 basis points (0.50%). It was a highly anticipated moment. And now that the speculation is over, it’s time to position our portfolios accordingly for the next year and beyond. [Header]( Is This the Best-Performing Sector Following Rate Cuts? Dear reader, On Wednesday, the Federal Reserve slashed interest rates by 50 basis points (0.50%). It was a highly anticipated moment. And now that the speculation is over, it’s time to position our portfolios accordingly for the next year and beyond. As you can see in the chart below, the biotech sector – as measured by the SPDR S&P Biotech ETF (XBI) – has greatly underperformed the S&P 500 over the past five years. [mmi 9-20] [mmi 9-20]But over the past year, XBI has managed to outpace the S&P 500 by several percentage points. Does that mean the tides have shifted in favor of biotech stocks in anticipation of lower interest rates? And more importantly, are biotech stocks a good investment for the next few years? The answer to both questions is yes. Biotech stocks are a must-own sector in any portfolio. Let me explain… --------------------------------------------------------------- After picking 27 “10-bagger” stocks, Matt McCall pounds the table on “EAI” [space ad 4]( He recommended Bitcoin in 2014… TSLA before it soared 2,600%... And NVDA before it climbed 3,600%. Now, Matt McCall is pounding the table on "EAI." Could this be his next “10-bagger pick? [Click here now to find out](. --------------------------------------------------------------- A large majority of biotech stocks aren’t profitable. That means they must rely on borrowing money to fund research in the hopes of gaining approval for potential drugs. The rise in interest rates over the last few years has increased the borrowing cost for biotech companies. Higher rates combined with negative sentiment in the sector has led to historically low exposure from hedge funds. According to investment firm Goldman Sachs’ Prime Book – which tracks hedge fund investments – the long/short position ratio on biotech stocks is in the 13th percentile for the next 12 months. Looking further out at the next five years, the sector falls to the bottom 4th percentile. So if and when money starts coming back into the sector, it will create a new long-term sustainable uptrend. In fact, the charts indicate that there may already be some accumulation – with a lot more money capable of flowing into the sector. That means it’s time to start adding some biotech stocks to your watch list… I’m happy to share a few of my own below. To be clear, I don’t personally own any of these stocks, nor have I recommended them in my newsletters. But these names should give you an idea of where to look when the time is right. Viking Therapeutics (VKTX) is a biotech with a drug candidate in the Glucagon-like peptide-1 (GLP-1) area for treating obesity. Structure Therapeutics (GPCR) is a pharmaceutical company that also has a drug candidate for the treatment of obesity. And Recursion Pharmaceuticals (RXRX) is a biotech firm that combines artificial intelligence (AI) with drug discovery. It also has its own pipeline of early-stage drug candidates. The company received a small amount of money from Nvidia (NVDA) last year, but the stock has been struggling lately. Again, these three stocks are not recommendations. They’re just some ideas to get you thinking about biotech stocks and the upside potential in this space in the years ahead. Here’s to the future, [Matt McCall signature] Matt McCall Editor, Market Insights Check Out My Latest Podcast [MMI Sept 18 Podcast]( I’m willing to bet most folks don’t think too much about energy drinks as an investment idea. But what if I told you one energy-drink maker was one of the best-performing stocks over the last 30 years? [On this new episode of SteadyTrade Podcast](, Tim Bohen and I dive into this particular stock. But it’s not the only consumer-staple stock that has been flying under the radar recently. This industry has more than doubled the return of the tech sector here in 2024. And two niche areas within this broader space could be the next big winners. [Click here to tune in now](. © Centurion Publishing 13809 Research Blvd, Suite 500, Austin, TX 78750 [CenturionPub.com]( *Results are not typical. Past performance does not indicate future results. All investing carries risk. Our Privacy Policy, along with our Term & Conditions, governs your use of this site. By using our site, or by accepting the Terms of Use (via opt-in, checkbox, pop-up, or clicking an email link confirming the same), you agree to be bound by our Terms & Conditions and our Privacy Policy. If you have provided personal, billing, or other voluntarily provided information, you may access, review, and make changes to it via instructions found on the Website or by replying to this email. To manage your receipt of marketing and non-transactional communications, you may unsubscribe by clicking the “unsubscribe” link located on the bottom of any marketing email. Emails related to the purchase or delivery of orders are provided automatically – Customers are not able to opt out of transactional emails. We will try to accommodate any requests related to the management of Personal Information in a timely manner. However, it is not always possible to completely remove or modify information in our databases (for example, if we have a legal obligation to keep it for certain timeframes, for example).If you have any questions, simply reply to this email or visit our website []( to view our official policies. To Unsubscribe [Click Here](