The first presidential debate of the United States election has ended. In terms of the debate situation, Biden's on-site performance was less than expected. Although the victory or defeat of a single debate is not enough to completely determine the final result, expectations about "Trump's return" continue to ferment.

Currently, the gambling market judges that the likelihood of Biden winning the 2024 presidential election has reached a new low, while the probability of Trump has risen to a new high. According to Real Clear Politics, Biden's current chance of re-election in November is 19%.

The financial market reacted quickly. On Friday, most healthcare stocks rose, with $NeueHealth (NEUE.US)$ up over 1%. Royal Bank of Canada analyst Ben Hendrix said that Biden's lackluster on-site performance is expected to increase market confidence in the management-oriented healthcare/medical industry. If Trump returns to the White House, the healthcare sector is expected to usher in a more friendly regulatory environment, which means that the Federal Trade Commission or the US Department of Justice's reviews of vertical integration strategies will be relaxed or even cancelled, which is estimated to particularly benefit UnitedHealth.$UnitedHealth (UNH.US)$, $NeueHealth (NEUE.US)$rose more than 4%,$Humana (HUM.US)$rose by more than 3%,$CVS Health (CVS.US)$, $Elevance Health (ELV.US)$rose more than 1%.

Canadian Royal Bank analyst Ben Hendrix said that Biden's lackluster on-site performance is expected to increase market confidence in the management-oriented healthcare/medical industry. If Trump returns to the White House, the healthcare sector is expected to usher in a more friendly regulatory environment, which means that the Federal Trade Commission or the US Department of Justice's reviews of vertical integration strategies will be relaxed or even cancelled, which is estimated to particularly benefit UnitedHealth.

In fact, in addition to the continuous fermentation of the expectation of "Trump's return", the expectation of rate cuts is also rising.

In May, the year-on-year core PCE price index in the United States was 2.6%, the lowest record in three years, providing strong support for the expectation of a rate cut by the Federal Reserve in September this year. CME FedWatch Tool shows that the probability of a rate cut in September by the Federal Reserve has risen to 62%, and the probability of another rate cut in December is 62.5%.

Market participants believe that in recent three years, the biotechnology sector has been underperforming the broader market. Once the expectation of interest rate cuts is raised by the Fed, biotechnology companies, represented by innovative drugs, will have the ability to make up ground.

Because the research and development cycle of biomedical technology is long, the input is large, and the cost is high. In the early stage, it is highly dependent on external funding. When the yield of US bonds is high, it means that the return of low-risk investment is high, and funds are unwilling to take greater risks to invest in equity assets such as innovative drugs with heavy research and development.

With the decline of US bond yields, the market's risk sentiment will be boosted, the financing difficulty of innovative pharmaceutical companies will be relatively reduced, more funds will flow back to the stock market, and the medical sector will be favored by more funds, which will be bullish for the innovative drug sector.

However, it should be noted that biomedical companies usually have a high potential for growth but also come with a greater risk of failure. When investing in the biotechnology industry, not only the company's current business progress needs to be considered, but also the possibility of approval of new drugs by relevant regulatory agencies.

Although considering biotechnology as one of the diversified choices of the investment portfolio is undoubtedly wise, for non-professional investors, accurately selecting biotech stocks with potential in the complex market is undoubtedly a challenging task.

Therefore, biotechnology ETF may be an investment direction worth considering for investors. FUTU News has compiled several biotech ETFs for MOORers' reference:

1) SPDR S&P Biotech ETF (XBI)

$SPDR S&P Biotech ETF (XBI.US)$The top three components are small nucleic acid drug leader,

the company specializing in the development of drugs for pulmonary arterial hypertension,$Sarepta Therapeutics (SRPT.US)$$United Therapeutics(UTHR.US)$$United Therapeutics (UTHR.US)$RNAi leading company.$Alnylam Pharmaceuticals (ALNY.US)$All three stocks have recently hit new highs this year.

2) iShares Biotechnology ETF (IBB)

$iShares Biotechnology ETF (IBB.US)$It is a leading ETF that tracks a weighted index of biotechnology industry stocks, with assets under management exceeding $7.2 billion. The ETF ​​balances the stability of large-cap stocks with the high returns of small-cap stocks. Its current main investment targets include$Vertex Pharmaceuticals (VRTX.US)$, $Amgen (AMGN.US)$, $Regeneron Pharmaceuticals (REGN.US)$, $Gilead Sciences (GILD.US)$and other companies.

3) ARK Genomic Revolution ETF (ARKG)

$ARK Genomic Revolution ETF (ARKG.US)$It is an actively managed ETF under the ARK Invest umbrella, which invests (at least 80% of its assets) in multiple companies seeking long-term capital appreciation, including medical, information technology, materials, and companies focused on targeted therapies, stem cell research, and agricultural biology.

4) 3x Long Biotech ETF (LABU)

$Direxion Daily S&P Biotech Bull 3x Shares ETF (LABU.US)$It is a leveraged ETF issued by Direxion on May 28, 2015. In short, it also tracks the S&P Biotechnology Select Industry Index, but provides three times the daily performance of the index through derivatives and common stocks held. It is suitable for investors who want to hold a certain leverage and have higher risk tolerance.

In fact, in addition to the above four ETFs, there are also many biotech ETFs in the US stock market, including$First Trust Exchange Traded Fund Nyse Arca Biotechnology Index Fund (FBT.US)$, $VanEck Biotech ETF (BBH.US)$, $Invesco Biotechnology & Geno Funds (PBE.US)$, $Ishares Gold Trust Genomics Immunology And Healthcare Etf (IDNA.US)$and many more.

Mooers can find their favorite ETFs through Futubull APP> Market> ETF> Biotechnology ETF!Market>ETF>Theme ETF>Semiconductor ETFBiotechnology ETF, find your favorite ETF!

Editor/Somer