XLV ETF

The final trades of the day with CNBC's Melissa Lee and the Fast Money traders.

In their last meeting of 2024, the Federal Reserve lowered interest rates by 25 basis points, but the markets reacted negatively when officials indicated there would only be two rate cuts in 2025. Carol Schleif, chief market strategist at BMO Private Wealth, noted that during a press conference, Fed Chair Jerome Powell highlighted the economy's strength, suggesting that inflation is not decreasing as quickly as expected. Looking ahead, Schleif anticipates increased market volatility in early 2025 and advises investors to keep diversified portfolios, particularly in sectors like technology, industrials, biotechnology, and financials.

Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the Health Care Select Sector SPDR ETF (XLV) is a passively managed exchange traded fund launched on 12/16/1998.

The healthcare sector, including the SPDRs Select Health Care ETF, faces high uncertainty due to political factors and elevated valuations, prompting a downgrade from hold to sell. My investment approach prioritizes low-risk and tactical decisions. In the current market climate, that produces more short-term gains rather than long-term holds, which increasingly lead to whipsaw situations. XLV's technical indicators suggest more downside risk than upside potential, with a 60% chance of the next 10% move being down, not up. That makes it unattractive for now.

The healthcare sector shows resilience and strong earnings growth prospects for Q3 and Q4. The entire US market is expensive, driven by peak company margins. Healthcare sector showed strong returns during US interest rate cut cycles.

Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the Health Care Select Sector SPDR ETF (XLV) is a passively managed exchange traded fund launched on 12/16/1998.

I am bullish on the Health Care Select Sector SPDR ETF (XLV) due to its attractive valuation, strong technical setup, and favorable seasonality heading into Q4. Eli Lilly (LLY) is a standout component, contributing significantly to XLV's valuation, but the ETF remains appealing even when backing out LLY's high P/E ratio. XLV offers diversified exposure across various healthcare industries, with significant holdings in large-cap stocks like UnitedHealth Group (UNH), Johnson & Johnson (JNJ), and Merck (MRK).

Chris Verrone, Strategas head of technical and macro research, joins 'Fast Money' to give his health care playbook.

The healthcare sector has gained momentum lately on market rotation, with investors rushing to buy beaten-down stocks while shunning the hot technology sector.