Big Pharma Stocks Are Breaking Out. Here Are Some Winners.

Big pharma stocks are trying to break out to new heights. They have reported more-than-satisfactory earnings and are expecting further progress on new pipelines of drugs.  

These stocks had been outperforming the broader market all year because they are defensive; their sales are unaffected by changes in economic demand. The Federal Reserve is lifting interest rates to reduce demand in the U.S. economy and to lower inflation. That has sent the


S&P 500


down 18% for the year, while many big pharma stocks have posted gains. Plus, those drug stocks are producing cash profits now; those immediate cash flows don’t lose as much value as rates rise and thus are less affected by the Fed.