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Quarter-End Insights

Our Outlook for the Health-Care Sector

Political winds could cast a cloud over health-care companies.

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Even though it seems like health care has bottomed out in the second quarter and despite the sector's usual status as a safe haven during turbulent times in the market, we believe the prospect of changing political winds could cast a dark cloud over many companies in our sector. Health care is a perennial on nearly every politician's list of key priorities. Granted, there's always some level of chatter around reforming our systems for health-care financing and delivery, and scholars of public health who have tracked the cycles of interest in health-care reform readily admit that very little change comes of all the talk. However, we think the next few years could become tougher for health-care companies due to the convergence of several key issues.

Debbie Wang has a position in the following securities mentioned above: NVS. Find out about Morningstar’s editorial policies.