The global economy is currently at a turbulent intersection, one that even the most celebrated economic pundits and fiscal savants cannot seem to accurately navigate. While some say that the economy is headed for a “soft-landing,” others exclaim that a full-blown recession is inevitable.
The healthcare industry is by no means immune to these economic pressures. In fact, healthcare has had many years of its own unique fiscal challenges— those that were uniquely exacerbated by the Covid-19 pandemic. Regardless, over the last decade, venture capital (VC) funding and investments in healthcare have actually been quite strong, as investors were eager to invest in cutting-edge technologies and the next generation of care delivery. Now, however, these same sources of funding are starting to slow down in fear of economic turmoil, indicating that rapid innovation in healthcare may indeed take a pause.
A recent report by Rock Health indicated that there has been a significant slow down in healthcare funding, specifically in the areas of the digital health. The report authors explain: “For the digital health sector, 2022 was a downhill ride—one that we think signals the tail end of a macro funding cycle centered around the COVID-19-era investment boom […] 2022’s total funding among US-based digital health startups amounted to $15.3B across 572 deals, with an average deal size of $27M. Not only did 2022’s annual funding total come in at just over half of 2021’s $29.3B2, but it also just squeaked past 2020’s $14.7B sum. Notably, 2022’s year’s Q4 $2.7B total was less than half of last year’s Q4 raise ($7.4B).”
As the report alludes to, the digital health industry has seen an incredible boom over the last decade. The U.S. Food and Drug Administration (FDA) defines digital health broadly as anything which “includes categories such as mobile health (mHealth), health information technology (IT), wearable devices, telehealth and telemedicine, and personalized medicine.” And given its relatively broad scope, digital health tools have had tremendous impact over a variety of healthcare sub-industries, ranging from diagnostics and care delivery, to augmented healthcare insights and tools for data-driven decision making.
One of the most notable areas has been the boom of telehealth and virtual health services, which was especially fueled by stay-at-home and social distancing restrictions during the Covid-19 pandemic. Notable names in this space that captured an immense amount of attention are Teladoc and Amwell. These companies continue to innovate in the virtual care space.
In terms of “big tech,” companies such as Amazon, Walmart, Google, and even Oracle have continued their investments in digital health and healthcare technology. For example, Amazon’s bold purchase of One Medical will undoubtedly give the eCommerce giant a significant leap forward into healthcare delivery. Leveraging its incredible technology platform, millions of insights on consumer retail patterns, and last-mile logistics network, this venture by Amazon will definitely be a game-changer.
However, even “big tech” has not been immune to economic pressures. Last year, Google announced that it would be moving many of its employees from its Health division into other positions around the company, indicating a “shake-up” of its health vertical. Similarly, Amazon itself shut down its “Care” business, citing that Amazon Care was likely not the best way to deliver valuable impact to its clients or patients. These moves candidly illustrate that even the most successful companies have to execute challenging decisions to maintain fiscal responsibility.
Assuredly, economic conditions will not improve overnight, and a sense of uncertainty will likely last for the coming months, if not for years. The healthcare system as a whole is already skating on thin ice, balancing razor-thin margins while also dealing with macro-economic issues such as increased costs, a significant labor shortage, and changing consumer preferences. Given these circumstances, investments in healthcare innovation and technology will likely also slow down in the near future. However, as history has indicated, the healthcare industry is resilient and relentless. Undoubtedly, both the economy and consumers will find a way to reinvigorate it in due time, and innovation will be bountiful, yet again.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
