UnitedHealth continues falling following Harris-Trump debate

UNH stock fell on Wednesday, Thursday falling reduced odds of Trump victory.
UBS says UnitedHealth stands to benefit from Trump presidency.
Oppenheimer still has a $650 price tag on UNH stock.
August core CPI appears to be a drag on UNH share price.

Clay Webster FXStreet

UnitedHealth Group (UNH) traded about 0.7% lower to $587 on Thursday, continuing on from Wednesday’s 1.6% decline. The leading US health insurer has been hurt by the week’s higher core inflation reading, as well as a perceived win by Vice President Kamala Harris in Tuesday’s presidential debate.

The Dow Jones Industrial Average (DJIA), which allots UNH its largest position, is consolidating on Thursday despite gains from the S&P 500 and the NASDAQ.

UnitedHealth stock news

UnitedHealth stock is pulling back from recent highs achieved last week and following consolidation at the start of the week. The first culprit was Vice President Harris seeming to win her first presidential debate with former President Donald Trump on Tuesday night in Philadelphia.

There was plenty of back-and-forth sniping between the two candidates vying for the US presidency ahead of the November 5 election, but most pundits appeared to think Harris won the ABC debate by baiting Trump into angry tirades. Republican-leaning Fox News ran a focus group that came to the same conclusion.

Some Wall Street analysts think that a Trump presidency would be better for UnitedHealth. UBS affixed UNH stock to its list of top stocks that would benefit from a “red sweep”, meaning Trump’s Republican Party would win the House and Senate, as well as the presidency. However, prior to the debate UBS gave 35% odds of a red sweep occurring, and those odds may be lower following Trump’s unimpressive debate performance.

Oppenheimer posted a similar ranking of stocks by whether they would benefit from Republican or Democratic administrations but chose competitor Humana (HUM) as its top health insurer for a Trump presidency. However, Oppenheimer is most bullish on UnitedHealth overall, writing in late August that it “exhibits the strongest trend in the managed care sub-industry” and handing it a $650 price target.

Wednesday’s August Consumer Price Index (CPI) just added to the headwinds for UnitedHealth. The CPI report showed that core inflation was still slightly stubborn, rising 0.3% MoM rather than the 0.2% consensus.

Nearly 90% of the uptick in core inflation was caused by rising housing costs, but the CPI miss caused the market to give less credence to possibilities of a 50 bps interest rate cut from the Federal Reserve (Fed) meeting scheduled for September 18. The market is now firmly on the side of 25 basis points, which is less beneficial to large corporations like UnitedHealth.

On Monday, the Biden administration formulated new rules for private health care plans to improve access to mental health services, which may increase insurer costs.

UnitedHealth stock forecast

UnitedHealth remains in a healthy uptrend that began in early July. For now, UNH stock is well above it's 50-day Simple Moving Average (SMA), which trends near $565.

The Moving Average Convergence Divergence (MACD) indicator is bearish, but there won't be any true bearish sign unless shares descend below recent support at $557. Until then, expect UNH stock to regain its composure.

UNH daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.