Health care stocks may struggle to gain traction as Democrats prepare to take over Congress.
Jared Holtz, head of health care at Mizuho, said the outlook for the sector is uncertain given the expected impasse among lawmakers.
“I don’t see much happening over the next few years,” a sector expert at the company told CNBC’s “Fast Money” on Wednesday. “I don’t know if I want to own it all, but I can pick the names…For the first time in 20 years, pharmaceutical companies are trading more expensive than technology products. So I got out of pharmaceutical companies. I would look at medical technology.”
of State Street Healthcare Select ETF (XLV) It rose 3% the day after the election.
“We’ve had a very strange situation where normally all these categories don’t work together, but they did. So I think some things were a little bit off,” Holtz said Thursday, a day before Wall Street’s sell-off swept the health care industry.
A Democratic victory in the White House in 2028 could provide a real boost to the health care industry, Holtz said.
“You’ll see a setback in some of the Trump strategies, and that’s where I think health care might actually work,” Holtz said, adding that it depends on Democrats holding the Senate and House.
For investors with a long-standing interest in health care, Holtz said each subsector should be treated differently.
“Could we take some of the regulations that have been in place for the past few years and reverse them in the short term? I don’t necessarily think so,” Holtz said. “But if you do that, you probably want to be long on some of the medical device stocks that are at or near multi-year lows.”
of State Street Healthcare Select ETF This week ended almost flat. It has increased about 32% since President Trump took office in January 2025. S&P500 The difference was almost 9 percentage points.
