(Bloomberg) -- Health-care investors who basked in a mellow August should enjoy this weekend's Labor Day holiday before a September fraught with policy decisions kicks off what may prove a volatile end to the year, according to Raymond James analysts.
Expectations for President Trump to follow up on a planned Executive Order that shook biopharma investors' psyche in July, paired with drug pricing plans from the likes of Speaker Nancy Pelosi and the third round of Democratic Presidential debates, should make the month โlit,โ analysts led by Chris Meekins wrote.
While health-care has outperformed the broader market's decline in August, falling just 1.6%, the sector remains higher by a measly 4.4% in 2019 and is the second-worst performer, ahead of only energy. That's going into a month when the closely-watched Health Care Select Sector SPDR ETF has underperformed the market in 12 of the past 18 years.
The range of anticipated announcements from President Trump and his administration are expected to โmake September unofficially โHealthcare Month,'" Meekins said. Expectations the administration will issue an executive order on drug prices next month โcould be the most aggressive action, on paper,โ seen from the administration, though its impact may be lessened by legal challenges.
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Additional updates on plans to replace the Affordable Care Act, a potential executive order on flu vaccinations, as well as various spending bills and Speaker Pelosi's drug pricing plan may further add to volatility.
Add to the mix the third round of Democratic presidential debates on September 12, with fewer candidates able to differentiate themselves, and investors should brace for volatility through year-end, Meekins said. But Raymond James continues to believe that it is โunlikely any policiesโ will hurt earnings before the 2020 election.
To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper
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