Rosemary's Baby - Revisited

Biotech, RFK, Eli Lilly etc!

As regular readers know, Shrubstack affectionately refers to the Biotech Sector (ETF: XBI) as “Rosemary’s Baby”: given it’s a rate-sensitive and cash-burning sector, it looks like the unholy offspring of Cathie Wood and TLT, the ultra-long bond ETF!

The sector rallied by +50% since we first conceived “Rosemary’s Baby” (pun intended) back in November 2023, pretty close to the lows of this cycle.

Biotech was continuing its healthy run, until Trump appointed RFK as his Health Secretary this week, which sent the sector down by 8%.

RFK is known to be an anti-vaxxer. He’s also known to have had a worm in his brain that ate a portion of it, but anyway:

The Market reacted as if the new Health Secretary is the Exorcist that will cleanse Rosemary’s Baby from “evil”!