There were no S&P 500 earnings reactions on Thursday, but we need to talk about what's happening with healthcare.
The sector just got a shot of adrenaline straight into the heart of Wall Street via Donald Trump’s new deal with Pfizer $PFE.
For years, healthcare has been buried under a cloud of uncertainty. Investors worried about tariffs on imported drugs and medical devices, supply chains tied up overseas, and the constant threat of political crossfire over pricing.
Almost every stock in the sector lagged while money poured into flashier corners of the market like AI and semiconductors.
That all changed this week...
Trump’s Pfizer deal isn’t just about one company - it’s about removing a layer of risk that has weighed on the entire space. By striking a direct partnership and signaling support for domestic production, the administration has effectively pulled the rug out from under the tariff narrative.
Instead of wondering which drug or device would get caught in a trade war, investors can now focus on growth, innovation, and demographics. The sector finally has clarity, and markets love clarity.
The timing couldn’t be better...
With aging populations driving up demand, breakthroughs in diagnostics reshaping preventive care, and fresh government backing for research and manufacturing, the long-term fundamentals look stronger than ever.
You can see the market waking up in real time. Look at the Equal-Weight Healthcare ETF $RSPH:
The healthcare sector is ripping to new multi-month highs in its strongest five-day run since October 2022. As it was three years ago, we believe this is another initiation thrust - a rare period when a sleepy sector wakes up and starts a brand-new bull market.
You don’t get this type of vertical move without a structural change in the story. Right now, the story is shifting in favor of healthcare for the first time in years.
When a sector turns, the real money is made by finding the leaders. After digging through every corner of the group - fundamentals, technicals, and everything in between - one stock stands out to us. Its name is Grail $GRAL:
Grail is putting the finishing touches on a textbook base that has been building all year. The price looks poised to make a fresh leg higher.
But this isn’t just a pretty chart...
The company is a $2.4B diagnostics and research powerhouse sitting at the cutting edge of early cancer detection. Their core platform uses next-gen sequencing to detect cancer signals in blood with a level of accuracy that could fundamentally change how we think about preventive medicine.
We’re not talking about a “nice to have” product. We’re talking about technology that could reshape the standard of care and unlock a multi-billion-dollar market in early detection.
This exciting fundamental story, paired with the strong technicals is why we like the stock so much.
So long as GRAL holds above 64, the path of least resistance is likely to remain higher for the foreseeable future.
Happy Friday
-The Beat Team
P.S. Small-cap season is here - Steve Strazza and Patrick Dunuwila went LIVE to talk about which stocks they're buying and why.
