Market update: Health care sector not feeling so hot

This week in the markets

  • Health care has been the worst performing sector in 2019, possibly due to potential changes to the US health-care system.
  • Apple settled a two-year long dispute with Qualcomm, which caused Qualcomm’s stock to skyrocket 40%.
  • The Chinese economy has seen steady growth within the first quarter of 2019 despite trade tariffs imposed by the US.

The health care sector is underperforming in 2019

Health care has been the worst-performing sector in the stock market this year, rising by just 0.10% as of Wednesday, possibly due to potential changes to the US health-care system. A number of Democratic proposals call for eliminating private health insurance and replacing it with a universal Medicare plan, or “Medicare for all.” UnitedHealth Group’s CEO David Whichmann said Tuesday that the Medicare for all proposals would “surely jeopardize the relationship people have with their doctors and destabilize the nation’s health system.” As of Wednesday’s close, UnitedHealth Group’s shares were down 13% for the month of April.

Putting health care aside, the overall stock market seems to be doing rather well. At Thursday’s close, the S&P 500 rose 0.16%, the Dow Jones Industrial Average (DJIA) increased 0.40%, and the Nasdaq advanced 0.025%. Also, earnings season kicked off last week with more than 78% of the S&P 500 companies that have reported earnings topping analyst expectations, according to FactSet. Sounds like a successful start to 2019.

Qualcomm rose 40% after settling dispute with Apple

Apple first announced that it was suing Qualcomm, the telecommunications equipment company, back in January of 2017. Qualcomm had attempted (with some success) to get iPhones banned in key markets over alleged patent infringements, and even claimed that Apple had stolen proprietary technology. Apple, on the other hand, felt Qualcomm was abusing its position as one of the few companies to hold patents on necessary cellular technology.

This week, after two years of bitter legal battles, the two companies came to an agreement. As part of the deal, all legal action will be dropped, and Apple will buy Qualcomm chips again. After the settlement was announced on Tuesday, Qualcomm’s stock rose nearly 40%. Apple’s stock was also up 1% on Tuesday, in line with the broader market.

China saw steady economic growth in the first quarter

Despite the tariff war with the US, China’s economic growth held steady in the first quarter of 2019. China, which is considered the world’s largest economy, expanded by 6.4% in the first three months of this year. Consumer spending, factory activity, and investments within China have all accelerated according to the National Bureau of Statistics.

The Chinese economy is considered an international emerging market because it is still in the process of becoming a developed nation. As a MoneyLion member, you have the opportunity to invest in international emerging markets such as China, Brazil, and Taiwan through the Vanguard FTSE Emerging Markets ETF (VWO). You can see (and change) how your MoneyLion Investment Account is allocated by pressing My Portfolio within the Finances Tab.

And now for your weekly Lionomics wrap-up. 🤓

Lionomics: Finance made easy

This week in Lionomics, we discussed the interconnectivity of financial markets across the globe. You have the opportunity to invest in almost any market in the world, but should you? Learn what geopolitical risks are. 👉

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