Here Comes Biotech Earnings: How to Trade Them

Last week, we had a rash of tech earnings that dominated the release calendar – highlighted by META Platforms Inc. (META) and Inc. (AMZN).

This week, biotech will take center stage – with names like Vertex Pharmaceuticals Inc. (VRTX), Amgen Inc. (AMGN), Eli Lilly & Co. (LLY), and Gilead Sciences Inc. (GILD) set to report.

Could this offer you a trigger catalyst to play a name such as VanEck Biotech ETF (BBH), which has their top three holdings as Amgen, Vertex, and Gilead?

Here’s why I believe the answer is “Yes”…

Last year, the entire biotech sector was a major laggard.

For instance, look at these returns….

Biotech: Major Laggard in 2023

  • SPDR S&P Biotech ETF (XBI) gained only +7.6% in 2023
  • iShares Biotechnology ETF (IBB) gained only +3.8% in 2023
  • SPDR S&P Pharmaceuticals ETF (XPH) gained only +1.6% in 2023

As you can see, all of these top biotech funds severely underperformed the S&P 500’s gain of +24%. Why?

Fed Rate Hikes

Since so many biotech firms borrow capital for research and development – when the Fed is aggressively raising rates – money gets expensive – and cash-burning biotech companies get crushed.

But guess what?

Here in 2024, we’re expecting Fed rate cuts.

This could be the trigger for biotech to bounce back hard.

After a year of under-performance, the VanEck Biotech ETF BBH is now starting to poke above $168. If this can continue, and it stays above this year-long resistance level – that could be an early indication that higher prices are coming.

Biotech ETF Could Rise Higher



Now that we’re entering into a Fed rate-cutting cycle here in 2024, this could offer biotech the time to shine. And with a series of high-profile earnings reports scheduled for this week, now could be the time to start that upside swing. After an under-performance in 2023, I fully expect a stronger 2024 – which is why I’m already starting to get my War Room traders positioned for a big biotech year.

If you’d like to join us inside The War Room to trade this biotech resurgence, you’re invited to join our elite trading community.

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