← The Rundown
The Rundown
Trump’s Medicare Proposal Tanks Healthcare Insurance Stocks, GM Delivers Rosy Profit Outlook
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Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zadad Mani, and Today is Tuesday, January 27th. In today's episode, we'll discuss why gold continues to outperform bitcoin. We'll also tell you why health insurance stocks are getting wrecked today and an earnings recap of GM and Boeing. Then stick around to the end of the show to find out why Michael Burry is buying gamestop. Got a great show for you today. Let's go. Markets kicked off the week on a positive note. Both The S&P 500 and Nasdaq were up about half a percent on Monday. Stocks have now gone up for four straight days, and the S P is now within 1% of hitting record highs and crossing the 7,000 mark. And the Nasdaq is 1.5% away from record highs, which could happen this week if big tech earnings come in strong. Remember, we got some heavy hitters reporting this week, including Tesla, Microsoft, Meta, and Apple. Now, outside of stocks, the more interesting story right now is what's happening in currencies and commodity. The US dollar continues to slide, hitting its weakest level since 2022. At the same time, gold and silver keep ripping higher. You know, investors are bracing for another potential US Government shutdown, which could happen on Friday. And there's still tariff threats and trade tension hanging over the markets. President Trump recently threatened Canada with 100 tariffs and if they make a trade deal with China. And he also threatens South Korea with 25% tariffs. So all that uncertainty keeps pushing investors into hard assets like gold. What's interesting, though, is that while stocks and gold continue to rally, crypto, especially bitcoin, has been left behind. Bitcoin is down more than 5% over the past week, and it's now more than 25% below its record highs from October. You know, bitcoin is just losing its reputation as digital gold. Clearly, investors would rather hold real gold during times of uncertainty. Gold is up 80% over the last year, while bitcoin is down more than 10%. On top of that, there seems to be no hype around crypto anymore. Trading volumes have thinned out and these crypto ETFs are seeing outflows. So we'll see if that changes anytime soon. But there seems to be no spark in the crypto markets right now. So, yeah, there's a lot to watch over the next few days. Things could get pretty volatile. Remember, we have a Fed meeting wrapping up tomorrow along with a Jerome Powell press conference. We'll be covering that along with the big tech earnings like I mentioned, Tesla, Meta, Microsoft and Apple report this week, along with a hundred other s P500 companies. So in, it's a great time to get subscribed to the podcast and tune in every day to stay in the loop. Let's run through some headlines, starting with health insurance companies. Health insurance companies are seeing their stocks plummet this morning after the Trump administration proposed keeping Medicare Advantage payments basically flat for 2027, which is a big shock for these companies. Now, a quick refresher on how this works. Medicare Advantage is how most seniors in the US get their Medicare coverage today. So instead of the paying doctors directly, the government pays private health insurance companies like United Health, Aetna, Humana, and others a fixed amount per patient to manage their care. And this has been the single biggest growth driver for the health insurance industry over the past decade. You know, as the US Population ages and more people get on Medicare Advantage, that's more money for these health insurance companies. And that's why today's proposal is a big deal. Under this plan, Medicare Advantage rates would rise by just 1 09% in 2027, which equals roughly $700 million in additional revenue for the entire industry. That is way below what the industry was expecting. For context, insurers got a 5% increase this year worth about $25 billion. Now, on top of that, the Centers for Medicare and Medicaid Services is planning to crack down on a billing loophole tactic these insurance companies have used called unlinked chart reviews. So see, these insurance companies get paid more money for a sicker patient. So insurance companies have a huge incentive to document every possible diagnosis a patient has so they can get more money from the government. But these insurance companies have started diagnosing conditions for patients that weren't tied to a doctor or a treatment. Essentially, the patient didn't necessarily get new care for a condition they had, but the insurance company still got paid from the government, as if the patient was sicker. You know, the health insurance industry has a reputation for being sketchy, and this is a great example of that. Now this lo loophole is closed, health insurance companies could see a hit to their revenue and profits. And that's why the market reaction has been so ugly. Shares of UnitedHealth, CVS, Aetna, and Humana are all down 10 to 15% this morning. Let's shift gears and talk about General Motors. GM reported fourth quarter earnings before the bell today. And while the quarter itself was mixed, the outlook for 2026 is what really excited investors for Q4, GM beat earnings expectations but slightly missed on revenue and overall 2025 was a down year, annual SAL down 1% compared to 2024. But moving forward, the automaker says it expects to profit between 10.3 and $11.7 billion in 2026, driven almost entirely by strong demand for its highest margin vehicles, which are gas powered pickup trucks and large SUVs. So think Silverados, Sierras, Tahoes and Escalades. GM also announced plans to buy back up to $6 billion of its own stock and raise their quarterly dividend by 20%, which is a clear management feels confident enough to return more cash to shareholders. The company also gave more details on tariffs which remain a real headwind for them. GM says that tariffs on vehicles and parts cost the company $3.1 billion last year, though about 40% of that was offset by shifting more production back to the U.S. looking ahead though, GM expects tariffs to cost between 3 to 4 billion dollars in 2026. The company's also shifting away from EVS. Earlier this month, GM took a 6 billion dollar write down as it pulled back on its EV ambitions. Now GM still produce EVs, but losses from that business should shrink by one to one and a half billion dollars this year. So overall investors like what they heard and GM stock is up 6% this morning at the time of this recording. Let's talk about some stocks making moves today. Micron shares are ripping higher this morning after the memory chip maker announced a 24 billion dollar investment in Singapore. The money will be spent over the next decade to expand Micron's existing NAN memory facility as the company looks to keep up with the surging demand for memory from AI and data centers. So the company has been aggressively expanding capacity. They recently broke ground on a $100 billion chip complex in upstate New York and they also announced a $1.8 billion acquisition of a chip factory in Taiwan. Now there are some concerns that Micron could overbuild and that could lead to a supply glut in the future. But the company says they are aware of those concerns and they plan to be further flexible with production to avoid that issue. Investors are loving it. Micron stock is up 4% in pre market trading today and if you zoom out, the stock is up over 300% over the last year. Other memory companies like Sandisk and Western Digital are also up this morning. Now on the flip side, Boeing stock is down this morning despite the airplane maker reporting decent Q4 earnings. Boeing's revenues jumped 57% year over year to nearly $24 billion, thanks in part to delivering the most planes since 2018. Company also generated positive free CA flow for a second straight quarter, and management sounded optimistic about 2026. But the stock is still down this morning because a big chunk of Boeing's earnings beat came from the sale of its Jefferson Digital Aviation unit and not from the core airplane operations. If you strip out that sale, the underlying profitability was weaker than expected. Plus their defense unit continues to be a drag on earnings. So while Boeing is making progress from where they were two years ago, there's still some risk moving forward, and that's why Boeing Stock is down 2% this morning. If you zoom out though, Boeing stock has surged more than 40% over the last 12 months. Let's wrap the show with the fun fact Michael Burry has been buying up GameStop stock. The man who became famous for shorting the housing market in 08 wrote in a very long substack post that I read that he's buying GameStop, but what's funny is that he's not actually bullish on their business. He said that GameStop's core business, which is selling games and collector items, is crappy. But he likes CEO Ryan Cohen and he likes the fact that GameStop has $8 billion in cash on their balance sheet. He thinks that Ryan Cohen could eventually turn GameStop into a Berkshire Hathaway type company where they buy entirely different businesses with the cash they have. And honestly, I think I agree because I feel like the only way GameStop is going to survive moving forward is if they go into a totally different line of business because people aren't going to start buying more games at brick and mortar stores anymore when everything is moving to a subscription service and digital downloads. We'll see if GameStop can pull off this pivot. By the way, GameStop stock did pop 8% yesterday after the Burry post, but the Stock is still down 70% from its 2021 meme stock highs, which was five years ago. That's still one of the craziest moments I've ever seen in the markets. By the way, let me know in the comments on Spotify and YouTube what you think about GameStop today. And if you agree with Michael Burry's bull thesis, well, all right guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. And if you are listening on Spotify. Don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.
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