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The S&P 500 Index in November 2017: What You Should Know

PART:
1 2 3 4 5 6 7 8 9 10
Part 8
The S&P 500 Index in November 2017: What You Should Know PART 8 OF 10

The Healthcare Sector: Will the Rally Continue in December?

Performance of the healthcare sector

The healthcare sector had a strong performance in November 2017. The Health Care Select Sector SPDR ETF (XLV), which tracks the performance of the healthcare sector, rose 2.9% in November 2017. On a year-to-date basis, it has returned 22.4% as of December 1, 2017.

The Healthcare Sector: Will the Rally Continue in December?

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Johnson & Johnson (JNJ), Pfizer (PFE), UnitedHealth Group (UNH), and Amgen (AMGN), which are major holdings of XLV, returned 0.55%, 4.3%, 8.9%, and 0.9%, respectively, in November 2017.

The healthcare sector also added significantly to the overall performance of the S&P 500 Index (SPX-INDEX) so far this year and in November 2017. As we saw in the previous part of this series, the sector rotation and continued position in defensives mainly drove the healthcare sector’s performance in November.

Tax reform

The proposed tax reform bill could have a significant impact on the S&P 500 Index (SPX-INDEX) (COMP-INDEX) as well as the healthcare sector. A lower corporate tax rate is expected to increase the net earnings of major healthcare stocks. But if there’s any negative news about the tax reform bill, then healthcare could be pulled down since it’s a defensive sector.

In the next part of this series, we’ll analyze the performance of the industrial sector.

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