Is The Biotech Bubble Bursting?

Tyler Durden's picture

Having been among the best performing sectors of the stock market for so long (up around 70% alone last year), the moves of the last few days - and especially today - are extremely worrying for the 'trend-is-your-friend' momo-following fickle investing public. The Nasdaq Biotech index is getting monkey-hammered this morning and is now 10% off its late-Feb highs. Crucially, this sector has been a major pillar of strength for the overall Nasdaq and that means the Nasdaq is also getting crushed - now down 0.9% from the FOMC and dramatically underperforming.

 

The Nasdaq Biotech index is plunging today and down 10% from Feb highs...

Here are the biggest losers...

 

Which has smashed the Nasdaq lower and dramatically underperforming... (the Dow is rallying on the back of Visa's surge as news that the Fed upheld debit card swipe fee caps)

 

And across sectors since the FOMC there is only one winner - financials - (and 2 clear losers)... with Healthcare dominated by the Biotechs... one question - if builders are dumping on higher rates (which we presume means pressure on housing) then why are financials rallying (especially given the collapse in the curve and thus lower NIMs and lower expected loan creation)