Subscribe to receive these charts every morning!

1. Healthcare stocks are cheap and contrarian.

Healthcare stocks are trading near the cheapest valuations in over a decade, leaving investors wondering if peak pessimism toward the sector is near. But sentiment seems ripe for a turnaround — even the threat of 200% US tariffs failed to have much impact.

More eye-catching is the sector’s forward price-to-earnings ratio below 15, historically low on an absolute and relative basis.

“Healthcare is more a contrarian trade because it really underperformed as a sector in Europe particularly,” say BNP Paribas strategists Benedicte Lowe and Georges Debbas.

“But if you look under the hood at flows and positioning, it’s too oversold and we’ve seen, for the first time in maybe two years, three weeks of constant inflow into the sector.” The new drug pipeline for several companies appears healthy, the strategists say. Plus, tariff threats look largely priced in. Secretary of Health Robert F. Kennedy Jr’s push for lower drug prices is a bigger threat than tariffs over the long term, they say.

2. “We need private equity, we need more of it, and we need it now.”

Endowment and pension managers not only have to hit tough targets in terms of returns but are rewarded for portfolios that don’t seem volatile.

Enter high-fee, alternative investments like private equity and private credit. The median buyout multiple including debt was 6.5 times Ebitda, a proxy for a company’s cash flow, in 2009, according to McKinsey. That multiple hit 10 times in 2019 and 12 times by 2022.

3. “Welcome to the software disruption flood.”

Software and the cost of creating software are dropping massively, as tools like Cursor and Claude Code proliferate. What used to cost thousands of dollars in tokens now costs mere cents, as generative AI is making coding much cheaper and faster.

And as coding agents increase the supply of software, we go back to the real scarcity, hardware.

Here is the ETF Semiconductors (red) versus the ETF Software (blue)

4. Cathie Woods in perspective.

A couple of good weeks does not make your investment positive if you were a believer in 2021.

5. Google’s Gemini growing faster than ChatGPT.

Not a subscriber yet?