ABC News: As Vote Looms, Closely Watched Insurance Stocks Rally - See no Public Option

[sabra]

http://abcnews.go.com/Business/obama-health-care-reform-stock-market-signals-vote/story?id=10138397

<snip>

"Major reform, particularly a public option, would really hurt the health insurance providers," Dion said. "When it looked like this bill was closer to passing, IHF shares got hammered. Back when Scott Brown got elected -- when it seemed like Obamacare was dead -- IHF shares rallied. "

Mixed Signals?

IHF, an exchange-traded fund, closed up nearly 2 percent Thursday, moving up to around $52 per share from around $51. Another popular health care ETF, the Health Care Select Sector SPDR (NYSE: XLV), also finished higher on the session. (An ETF is a collection of stocks, like a mutual fund, that can be bought or sold as a unit on a stock exchange.)

...

"That the IHF is rallying isn't necessarily a signal that the market thinks reform will fail," countered Michael Johnston, senior analyst at Chicago-based ETF Database. "I think the market has come to accept that the worst-case scenario, i.e. the public option, is not going to happen. The stock's movement just shows that the market no longer has an expectation that health care reform is going to hurt these insurance providers one way or another."

...

But if the Democrats do have the votes?

"One possible play would be to immediately short the IHF to take advantage of the knee-jerk reaction," he said. (Selling a security short is essentially a bet that it will go down.)

"But I think eventually the IHF goes back as people realize there is minimal impact or that any material impact is a long way off. However, the market is fickle -- this overhang has been around for almost a year -- so the IHF could rally anyway."

[msongs]

1. health scare industry is gonna make a lot of $$ if this passes, they happy nt

[tridim]

5. Smart Insurance companies that play ball with the new laws will make lots of money.

Companies that don't will wither and die due to simple economics.

IMO that's the whole point of HCR.

[TheWraith]

8. Besides which, the insurance stocks have been going up no matter what.

They went up when the House bill passed, they went up when the bill looked dead, and they went up when the Senate bill looked about to pass, and now they're going up again. Perhaps insurance stocks are simply going up at the moment?

[kenny blankenship]

2. YES WE CAN!

[Karmadillo]

3. A rising tide lifts all boats!!!!

nt

[Mari333]

4. guess I should have bought health insurance stock

silly me.

[hedgehog]

6. Is this the same market that had no idea about Madoff's swindle,

or how the investment firms were about to tank?

[TheWraith]

7. +100.

Somebody did a study and found out that the "best picks" of Wall Street investors actually performed worse than the market average.

The way that the Wall Streeters make money isn't by "investing," it's by skimming off the top from all the money everyone else invests with them, and by brute force manipulation of the market, particularly for commodities.

[Gaedel]

9. Win-win

HCR fails, they are still making money. HCR passes, they can virtually print money.

[ipaint]

10. Yippee!!11! We have saved the industry from serious decline as a result of

the coming migration of over 100 million baby boomers to medicare in the next two decades. Not only did we bail out the industry we strengthened it so they can continue to abuse our children and grand children.

What a fuckin' accomplishment.

[skipos]

11. I love that no one mentions that IHF is flat with the S&P for the last year

and even the last two years. Fox News would be proud.

[berni_mccoy]

12. Insurance Stocks are in line with the Market fluctuation. But make up BS all you want.

Like reading chicken bones or tea leaves.

[Romulox]

13. Translation: both banskters and insurance execs will be enjoying taxpayer funded bonuses this Xmas!

[Individualist]

14. This rally is nothing compared to how high they'll go once this POS bill is passed.