Stocks opened the Tuesday trading session with downside action as the prospect of higher interest rates is causing investors to take some food off the table. The Dow ended the day lower by 362 points on heavy trading volume to close at 26,076. Large techs did reverse higher. Losses occurred mostly in health insurance related stocks.
Jeff Bezos, Warren Buffett and Jamie Dimon are teaming up to come out with their own healthcare firm in an effort to lower costs and improve health for employees of their three companies (Amazon, Berkshire, JP Morgan/Chase). The company name will be “ABC Health solutions”. Warren will prescribe the drugs, Jeff will deliver them and Jamie will do the billing. The news was disruptive to shares of several traditional health care companies. United Health, Cigna, Express Scripts and others all pulled back hard as investors see Amazon taking market share from the dominant providers.
Consumer optimism pushed higher than anticipated in January to a reading of 125.4 which was better than expectations calling for a figure of about 123. Lynn “Frankie” Franco, Director of Economic Indicators at The Conference Board, said that "Expectations improved, though consumers were somewhat ambivalent about their income prospects over the coming months, perhaps the result of some uncertainty regarding the impact of the tax plan," confidence had been over 129 in November but declined in December to 122 and now appears to be on the move once more.
McDonald’s gave the market a happy meal by reporting better than expected earnings. Net income was up 19% while revenue fell 11%. The company was optimistic on forward guidance saying that tax savings will be mostly invested back into new stores plus existing store upgrades to focus on digital ordering and delivery. Could we possibly see a flock of chicken mcnuggests winging over head on their way to the eating grounds!