Below is a chart and brief excerpt from today's Early Look written by Health Care analyst Tom Tobin.

We think Healthcare is underperforming because estimate trends lag every other S&P 500 Sector heading into mid- 2021, while other sectors are accelerating. In MicroQuad terms, the slope is in MicroQuad 3, which in any Macro Quad means reduced long exposure. In the current Macro Quad 2 environment, the back test tells us we want to be long reflation. The best sector exposures are Tech, Consumer Discretionary, Financials, Energy, and Industrials.

The worst sector exposures are Telecom, REITS, Consumer Staples, Utilities, and Healthcare. The MicroQuad trends agree with that sector positioning although allow a second level of ranking. Now, we have two data sets agreeing that Healthcare is likely to underperform. Additionally, we can look even deeper and see that Healthcare Services are in worse shape than Healthcare Equipment.

The reopening is likely to be a massive tailwind for medical spending, but it will not be evenly distributed. We think the massive government spending on COVID-19 that flowed primarily through service providers is a difficult compare that will mask some of the upside even with 40% of survey responses reporting delayed medical care because of COVID-19. 

CHART OF THE DAY: The Quad Outlook For Healthcare - ttt1

CHART OF THE DAY: The Quad Outlook For Healthcare - ttt2