Another devastating 1,000-point sell-off has given way to another incredible rally.
All after more primary victories for former Vice President Joe Biden.
According to Barron’s, “The rebound in Biden’s fortunes stave off what the current issue of the Economist called ‘America’s nightmare’ that would result from what it said was the ‘increasingly likely’ prospect of Sanders, the self-described democratic socialist.”
“By no means are we endorsing Biden, but we think he will be better for markets than Sanders,”
added Andrew Brenner, head of International Fixed Income at National Alliance Securities.”
Even Ed Yardeni, president and chief investment strategist at Yardeni Research, as quoted by CNBC said, “Investors fear Bernie because he wants to cut off the head of capitalism by raising taxes significantly on the rich and using the funds to provide free everything to everybody else. Getting everything for free trumps freedom, according to Bernie. No wonder investors are reacting to him as though he is going to infect us all with the virus of socialism.”
Health Insurance Stocks the Other Clear Winners
On the Biden news, shares of UnitedHealth Group Inc. (UNH) were up $24 a share. Humana (HUM) soared $37. Anthem (ANTM) was up $34. Cigna (CI) was up $20.
All thanks to the Biden comeback.
In fact, according to Stephens analyst Scott Fidel, Biden’s win is a bullish catalyst for healthcare.
“These developments in the Democratic primary could set the MCO and Hospital stocks up for a relief rally as the market likely prices in reduced risk of Bernie winning the Democratic nomination.” Fidel said, as quoted by Benzinga.
Bank of America’s Kevin Fischbeck also said it’s just what the doctor ordered.
“As a moderate Democratic candidate, he has said that he would build on the ACA to expand coverage through his ‘public option’ form of coverage, which would offset any negatives from higher taxes. Sanders’ Medicare-for-All proposal contains provisions that would eliminate for-profit hospitals by cutting rates for providers, as well as disintermediate MCOs,” he said.
While we’re not endorsing any particular candidate, we simply wanted to show you what’s moving the overall market and healthcare stocks at the moment.
