On Wednesday, despite removal of the word “patient” from the March FOMC statement, Federal Reserve Chair Janet Yellen said in a subsequent press conference, “Just because we removed the word patient from the statement doesn’t mean we are going to be impatient [about raising interest rates].” Yellen had previously said that the promise to be “patient” means the Fed would likely wait at least two meetings before raising rates; the next two meetings are scheduled for April and June.
The market rallied in afternoon trading on Wednesday as a result. Essentially, market participants are now assuming that interest rates won’t rise until July or September (the next two meetings), whereas some were looking for a June hike. Assuming the market does continue higher with this news, this intrduces greater risk around the June meeting with expectations low for a rate hike. This is something to be aware of coming into mid-year if the market continues higher.
It’s starting to feel like the market can do no wrong, and the healthcare sector even more-so. Every small-cap is having its day (see Coronado (CNDO) on Thursday) and we’re talking to investors and traders who are simply looking for biotech names “that haven’t run yet.” Screening for stocks simply because they haven’t ripped higher in the last two months (read as “richly valued”), like many other names in the sector certainly says something about the current state of affairs. This is also eerily similar to the sector’s performance in February/March of last year just before the 2-month correction that rocked the sector.
With this in mind, we’re suggesting taking profits on many of our big winners, with details below. Remember, Premium members can always find a list of our “open” ideas at PropThink.com.
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