Options bets against healthcare stocks spike to three-year high as Trump picks RFK Jr. as health secretary
Companies that played a big role in Operation Warp Speed are being dumped by traders.
President-elect Donald Trump is putting forward Robert F. Kennedy Jr. as his pick to lead the US Department of Health and Human Services. The side effects for US healthcare stocks so far include symptoms more severe than nausea and an upset stomach.
Companies that developed vaccines — as part of President Trump’s Operation Warp Speed in 2020 — that facilitated a return toward normality and mitigated the worst possible mortality outcomes from the pandemic are now seeing significant selling pressure.
Shares of Moderna, BioNTech, Novavax, Vaxcyte, and Pfizer slumped late on Thursday when Politico initially reported this nomination. All are continuing to retreat this morning.
Kennedy Jr. has previously questioned the safety and effectiveness of vaccines.
Immediately following the election, JP Morgan Asset Management Chairman of Market and Investment Strategy Michael Cembalest warned about the potential for RFK Jr. to “take on some kind of advisory role in the administration with respect to public health,” and put forward this along with a list of links detailing Kennedy Jr.’s stance on the issue.
“Vaccines have been one of the most successful achievements in the history of human health, as confirmed by declining case counts after their introduction,” he wrote.
The S&P 500 Biotech Index is the second-worst-performing industry group since the election, off 9% through Thursday, while healthcare is at the bottom of the sector leaderboard since the November 5 vote with a retreat of 2.3%.
Put volumes (that is, bearish options bets) on the Health Care Select Sector SPDR ETF spiked to a more than three-year high on Thursday.
The biggest trade in the most actively traded put option came before the Politico report was published.
We would consider reaching out to Cembalest to get his take now that the RFK pick is official, but he closed his note by writing, “Please excuse me while I retreat to my undisclosed location given RFK’s potential impact on public health and the scientific method.”
