On Tuesday this week, we saw stocks take heavy falls after US inflation data printed higher than expected. This raised expectations for a 100bps rate hike from the Federal Reserve next week and the potential for an even higher terminal rate. This is a natural headwind for stocks. However, health care stocks tend to fair well in a recession as most people still prioritise health care for understandable reasons.
Using Seasonax tool we can easily compare the seasonal patterns of big health care names in order to try to narrow down the best potential seasonal pattern.
Major Trade Risks: The major risk here is if the seasonal pattern for either Johnson and Johnson or Pfizer does not play out this year.
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