Eli Lilly and Johnson & Johnson released new data. The data was good. The stocks went up. Software stocks went down because last week they went up and this week they went down because that's what stocks do when people who bought them last week sell them this week.
The Investing Club sends out something called the Homestretch every weekday. It's an actionable afternoon update. Actionable means you're supposed to do something with it. What you're supposed to do is anyone's guess. Buy Eli Lilly because the data was good? You already missed it. The stock bounced. Past tense. You're reading about it after it happened. That's the action you took.
Software stocks gave up last week's gains. Gave up. Like they had a choice. Like Microsoft woke up this morning and said you know what, I've been thinking about it, and I'd like to return these gains from last week. The gains were given up the same way your lunch money was given up in seventh grade. Someone bigger took it.
J&J bounced. Eli Lilly bounced. The biotech guys are having a week. The software guys are not. This is called sector rotation. Fund managers sell one thing and buy another thing and CNBC calls it a narrative. The narrative is new data. The data could say anything. Could be a clinical trial. Could be sales figures. Could be a press release that says we're still a company. Doesn't matter. The stock bounced on it.
Retail traders are now Googling "what is Eli Lilly" and "is software dead" and "how to buy pharma stocks." They will find the answer to all three questions by Friday when software bounces and healthcare gives up this week's gains. The Homestretch will tell them what happened an hour before the close. An hour they could've used to do literally anything else.
The new data works until it doesn't.
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