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Takeaway: Pick your poison. Fed rate hikes, leverage, slowing utilization and the latest JOLTS data, all spell trouble for Healthcare.

Editor's Note: Below is a brief note from Hedgeye Healthcare analyst Tom Tobin and Andrew Freedman. For more information about our institutional research contact sales@hedgeye.com. Also, check out Tobin's piece "Why a Perfect Storm Is Brewing in Healthcare" for a detailed analysis of his #ACATaper thesis.

Gloom & Doom? No. But Short Healthcare On #ACATaper - stormy

Rate Hikes…

That’s what many investors were talking about yesterday. Well, a Fed rate hike is certainly not good for the highly-leveraged healthcare sector with slowing medical consumption. Take a look at the charts below.

Click images to enlarge

Gloom & Doom? No. But Short Healthcare On #ACATaper - andrew leverage1

Gloom & Doom? No. But Short Healthcare On #ACATaper - andrew jolts3

Meanwhile, the latest JOLTS report continued to slow with +8.0% YoY in the 3-month rolling number of healthcare job openings.  This is consistent with our #ACATaper thesis and in-line with our expectations heading into the report, although we would have liked to have seen a weaker number.  

Gloom & Doom? No. But Short Healthcare On #ACATaper - andrew jolts1

The biggest surprise was the increase on Layoffs and Discharges, which posted the largest monthly increase since April 2009 at +50.5% YoY and supports our short thesis on AHS.  

Gloom & Doom? No. But Short Healthcare On #ACATaper - andrew jolts2