Research

The S&P500 sold off 10% from February 19th, 2025 through last Thursday. This represents the 18th biggest draw down of the S&P500 since 1986.

The Healthcare Sector is up 6.4% year-to-date, compared to the S&P500 that is down 4.5%. Healthcare remains our favorite sector, as we don’t think the recent outperformance is close to fully incorporating the long-term potential.

After the market sells-off, like it has here over the last several weeks, there is a phrase that nearly always gets trotted out by the Sell-Side Institutional community, “The Pain Trade Is Higher.”

We entered 2025 the most cautious on risk taking we have been in several years, worried about several issues:

Not surprisingly, the question we have gotten most in the last few days is “how far through this sell-off are we?” The large banks are generally telling their institutional clients that the sell-off is more than half over based on the amount of hedge fund deleveraging they have seen in their prime brokerage businesses, implied volatility in the options market, and trading flows.