"GOVERNMENT PICKING WINNERS & LOSERS" - Wild Semiconductor Swings, Pharma Price Cuts

 

📊 Market Sector Tracker - Gary Kaltbaum's "Investor's Edge"

Tracking leading/lagging sectors, top stocks, and market positioning

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📅 Friday, December 19, 2025

"GOVERNMENT PICKING WINNERS & LOSERS" - Wild Semiconductor Swings, Pharma Price Cuts

Market Action - Week

• NASDAQ: +0.48%, NASDAQ 100: +0.59%, S&P: +0.10%
• Dow: -0.67%, Russell: -1%, Mid-cap: -1.5%
• SOX: +0.5% (BUT wild swings - see below)

The Wild Semiconductor Reversal 🎢

Wednesday crash → Thursday/Friday ramp:

• SOX: 74.19 → 66.95 (Wed close) → opened 69.50 Thurs → recovered
• NASDAQ: Closed 22,692 (Wed) → opened 23,048 (Thurs) - "350 points off big ugly-looking drop"
• SanDisk: 240 → 200 in 2 days → 240 in 2 days
• LITE: 375 → 310 → 371 in 5 days
• NVIDIA: Defended yesterday, up 4% today, "still in middle of range going back to July"

Gary: "20 percent moves down Wednesday, up Thursday, up Friday. It's amazing to watch."

Government "Picking Winners & Losers" 🎯

ORACLE (ORCL):

• Up $12 to $192 (6%+) - was $345 in September
• Got piece of TikTok deal
• Partners: Silverlake (private equity), UAE's MGX (45% ownership!)
• Gary: "Why does United Arab Emirates own 45% of US entity? Oh, that's right. Major deals going on in UAE with all kinds of Trump stuff and Trump family stuff"

COREWEAVE:

• Up $15/22% to $83 (was $187 June, $153 October)
• Chosen by Dept of Energy "Genesis Mission"
• Gary: "Government choosing... picking winners and losers"

SPACE STOCKS:

• Rocket Lab: Up 18% + more aftermarket - $800M missile defense contract
• ASTS: Up $10 to $76 - "hardly any revenues, lose a ton"
• Triggered by Trump executive order: "Ensuring American Space Superiority, which means absolutely freaking nothing"

CRYPTO:

• Gary: "Don't even get me going... government way up the wazoo with crypto, we don't like it at all. Doesn't even pass the smell test."
• Trump family "big into crypto... losing their butts"

💊 MASSIVE PHARMA PRICE CUTS (TrumpRx)

9 manufacturers agreed to "most favored nation" pricing: Amgen, Bristol-Myers, Boehringer-Ingelheim, Roche, Gilead, Glaxo, Merck, Novartis, Sanofi

INSANE PRICE DROPS:

• Amgen Repatha (cholesterol): $573 → $239
• Bristol-Myers Riataz (HIV): $1,449 → $217
• Boehringer Jardiance (diabetes): $525 → $55
• Gilead Epclusa (Hep C): $24,920 → $2,425 (90% cut!)
• Novartis Mayzent (MS): $9,987 → $1,137
• Sanofi Plavix (blood thinner): $756 → $16 (98% cut!)

Gary: "How the hell can they do that? Obviously they have a lot of margin in there."

"Standing ovation to the president on this. Standing ovation, as much as I complain about him."

"How can you lower price 90% and make money? Are you telling us you had a thousand percent markup?"

Leading Sectors/Stocks 🟢

• Semiconductors (Thursday/Friday recovery): NVIDIA, SanDisk, LITE
• AI stocks (after Wednesday bloodbath)
• Oracle, CoreWeave (government deals)
• Space stocks (Rocket Lab, ASTS)

Lagging Sectors/Stocks 📉

HOUSING CRASH CONTINUES:

• KB Homes: Down 8.5% - sales -15%, earnings -24%
• Hovnanian: Sales -17%
• Lennar: Earnings -50%, revenue -6%
• Home Depot: "Acting like south end of northbound jackass"
• Housing stocks, housing-related all hit hard

MANAGED CARE:

• Got hit after pharma announcement
• Trump said "we're going to be talking to managed care companies about what they are charging"

Gary's Key Points

On Government Intervention: "Government picking winners and losers. We're totally against it."

"We absolutely loathe" the White House interventions, "but we have three more years of it."

"First intervention was Liberation Day. That was crashing the market and going to crumble the economy. But that weekend... backed away from Liberation Day."

On Pharma Pricing: "Do you know how many stories I read of people that cannot afford medication? Zillions of stories. Do you know how many stories I read of people in debt because of medication? A bazillion stories."

"I think that's magnificent news. If anybody disagrees, I'd like to hear from you."

"I have a question how somebody can lower the price 90 percent and make money. That's a very good question."

On Market Volatility: "The Dow moved 2,000 points in eight minutes" (Liberation Day context)

"Wednesday they closed it out. Often really bad days they reverse intraday indicating washout. They closed it out. Oh, what did they do yesterday? They gapped the market out of nowhere. Like nothing happened."

On Semiconductors: "As I'm doing my scans, holy crap, the artificial intelligence stocks just getting bloodied up. More and more technology stocks breaking down... going deep, deep, deep into their bearish phase."

"To be clear, there's still plenty that are toast, broken down. But to be clear, they really ramped up our favorite names."

November 20 NVIDIA Reversal Context: "In normal circumstances, what we saw that day on November 20th normally indicated to me, oh, we're topping out, we're going to go through some heck. Well, the next day, we gapped down, finished good, and just ran back up to the old highs."

"The market had a real chance to follow through the downside off of that."

On Housing: "We continue to avoid the home builders."

Critical Watch Level: "Yields today, watch 4.2 percent. If the 10-year goes above that, we'll be talking."

Personal Hospital Bill Story: "I was in a hospital for eight hours. They charged me $26,000... When it goes to insurance... the $26,000 turned into three."

"My wife... in Boca Raton. They had the nerve... to show Tylenol $26. And you know what their reasoning was? It's called cost sharing."

"If the president ever got the hospitals in line, then we're talking."

Bottom Line

Wild week - semiconductors crashed Wednesday, government gapped them back up Thursday/Friday. Gary loves pharma price cuts but hates government intervention picking winners (Oracle/TikTok, CoreWeave, space stocks, crypto). Housing crash continues. Watch 10-year yield at 4.2%.