Health companies can celebrate thanks to Trump’s address to the joint members of Congress on Tuesday. During his speech, Trump made it clear that he was focused on healthcare replacement bills, and that healthcare was his top priority during his term.
Thus, several healthcare stocks surged on the Dow Jones Industrial Average on March 1st, hitting their all-time high.
The average was just above 21,000 points for the first time. Also, energy and material companies gained along with health insurance companies, and utility stocks went stagnant, says News on 6.
Tax Cuts and Insurance Reform Encouraged Stock Health
Some analysts have suggested that Trump’s absence of protectionist comments and his tone during the speech were enough to boost the confidence of world investors. Because of that increased confidence, global equity markets skyrocketed to some impressive numbers.
After the Dow Jones had surged more than 300 points, the index balanced at 6.7 percent. The S&P 500 index increased by 34 points – approximately 1.4%. Financials were up with the most gains, energy stocks gained 2%, and defensive sectors traded lower by going down by 0.7% to 0.2%. However, the benchmark index was still up by 6.9% since the start of 2017.
A Sign of Good Things to Come?
Trump’s speech made many promises, but one of the biggest was that he was going to make America better. Through improved schools, tax cuts, and healthcare reform, Trump promised to foster better federal spending and an improvement in America’s economy.
The economy has already been improving, and manufacturing numbers are higher today. The surge in stocks was on the heels of Trump’s speech, making it evident that his words played a massive role in the success of the stock market today. Also, the rate increase by the Federal Reserve is expected to come mid-March, which will be significant for the consumer housing market. However, the Federal Reserve’s plans to increase the interest rates is a sign that they are optimistic about the economy.
Trump called on Congress to not just replace Obamacare, but find a better resolution with more access, lower costs, and better healthcare overall.
He proposed including continuing coverage for those with pre-existing conditions, and to let Americans use their tax credits with larger Health Savings Accounts. Trump thinks governors should have more flexibility with Medicaid in their state, and he wants to protect consumers from price hikes that give insurance companies more power. At the same time, Trump wants to let insurance companies have more flexibility so that they can be bought and sold in multiple states.
His favoritism for a more streamlined healthcare system is likely to blame for the surge in health insurance stock prices. With health insurance being able to expand to other states and sell to consumers regardless of their location, health insurance companies will be more competitive, and prices competition could benefit consumers just as much as the insurance companies offering the policies.