Short Thoughts, new today.I cover Medicaid fraud/Molina, Shift4, Fannie Mae, the job market and “AI,” etc.On that last point, during COVID, Medicaid redetermination – that is, re-confirming participant qualifications to be part of Medicaid – were suspended – and this continued for over 3 years!About 25% of Molina’s membership is in California, where Medicaid enrollment is 10x bigger than Minnesota.https://t.co/nCxSgQwcUG ...

United Health and Elevance lower today amid growing worries over a spike in premiums tied to the expiration of Affordable Care Act premium tax credits. The change would affect millions of Americans. Let's bring in Lance Wilks who covers healthc care services stocks for Bernstein Research.Lance has got an outperform rating on United Health and Elevance. Lance, great to have you with us. >> Great to be here.First, I want to I want to get your take on on President Trump's truth social post earlier today basica ...

Core Insights - Centene Corporation (NYSE:CNC) is heavily reliant on healthcare subsidies, which has raised concerns about its investment viability [2][3] - The stock experienced a significant decline of 8.8% recently, following a broader market downturn led by other healthcare firms [2] - In July, Centene withdrew its full-year guidance, resulting in a record single-day stock drop of over 40%, prompting negative sentiment towards the managed care sector [2] Company Overview - Centene Corporation is one of the largest healthcare benefits management companies in the United States [2] - The company has been highlighted in discussions regarding the necessity of healthcare subsidies for its operations [2] Market Context - The healthcare sector, particularly managed care companies, has faced challenges, with Centene being a notable example of a company struggling in the current market environment [2] - Jim Cramer has indicated that while the sector may not be entirely uninvestable, the reliance on subsidies poses significant risks [2]

RT Dutch Rojas (@DutchRojas)7 health insurance CEOs made $335 million in 2022. That’s extraction.When you outlaw competition, via political donations this is what happens:Certificate of Need laws block new entrants.Stark and Section 6001 ban physician-owned systems.Site-neutral rules reward consolidation.So insurers and “nonprofit” health systems keep printing money while physicians fight for scraps.If doctors could build and own health systems again, these CEOs wouldn’t be making yacht money from your prem ...

Market Performance Amid Government Shutdown - The S&P 500 index reached a new all-time high of 6,740.28 points on October 7, 2025, marking eight consecutive days of gains [2] - The Nasdaq Composite also increased by 0.71% to 22,941.667 points, while the Dow Jones Industrial Average dipped 0.14% to 46,694.97 points, ending its six-session winning streak [2] Analysts' Perspectives - Analysts suggest that the economic impact of the government shutdown is "limited," with most economic activity merely "delayed" rather than lost [3] - UBS advised investors to focus on market drivers such as Fed rate cuts, strong corporate earnings, and AI capital expenditures instead of shutdown fears [3] Tariff Announcements and Reactions - President Trump announced a new 25% tariff on imported medium- and heavy-duty trucks, effective November 1, 2025, aimed at protecting American manufacturers [4] - Automakers expressed concerns that these tariffs could raise production costs and reduce competitiveness, with Stellantis labeling them "counterproductive" [5] Pharmaceutical Industry Developments - A previous threat of a 100% tariff on branded pharmaceutical imports was mitigated by a deal with Pfizer, which agreed to cut U.S. drug prices in exchange for a three-year exemption from tariffs [6][8] - Pfizer's stock surged nearly 7% following the announcement, positively impacting the broader pharmaceutical sector, with other major companies also experiencing gains [7][8] Healthcare Sector Reactions - President Trump's willingness to negotiate on healthcare subsidies during the shutdown led to significant stock increases in healthcare companies, with Oscar Health rising 8% and major insurers like Humana and Cigna also seeing substantial gains [9][10] - The iShares U.S. Healthcare ETF (IYH) is up 5.4% year-to-date, reflecting positive sentiment in the sector despite a slight cooling by October 7 [10] Overall Market Dynamics - The stock market under President Trump operates in a unique environment where traditional economic indicators are often overshadowed by presidential announcements [11] - The market has shown resilience and adaptability, thriving on policy changes and tariff negotiations, indicating a shift in how investors perceive volatility and uncertainty [12]

Molina shares fell as much as 10% when markets opened Thursday after the US health insurer cut its outlook for the second time this month https://t.co/OkLCZ3QoOS ...

Healthcare Sector Performance - Healthcare sector has underperformed the S&P by 25 percentage points over the past year, with the sector down 11% while the S&P gained 14% [1] - Healthcare sector has only outperformed when the overall market was down [2] - In 2022 and 2023, the healthcare sector underperformed the market by over 20% annually [8] Challenges in Specific Areas - Large cap pharma is facing issues [3] - Managed care companies like Centene, Molina, and Elevance have experienced significant challenges [3] - UnitedHealth Group, one of the largest healthcare companies, has lost 50% of its market capitalization this year [5] - Higher utilization in the system, particularly in Medicaid, is a headwind [5][6] - Potential changes to Obamacare and Medicaid coverage are creating uncertainty [7] Potential Investment Opportunities - Some investors are starting to see the current situation as a potential entry point [7] - The question remains whether these stocks are value stocks or value traps [8] - Need to see numbers reset and Medicare/Medicaid rates reestablished [9] - Procedure volume backdrop needs to improve [9]

Company Analysis - Xtep (1368 HK) reported a slightly weaker performance in Q2 2025, but maintained its guidance for FY25, expecting overall sales growth and a net profit increase of over 10% [2][4] - The main brand of Xtep is projected to achieve mid-single-digit growth, while Saucony is expected to exceed 30% growth [2][4] - The management remains confident in achieving the annual guidance, supported by strong performance in the running category, which saw over 30% growth in professional products [4][5] Market Overview - The Chinese stock market showed mixed results, with healthcare, consumer staples, and utilities leading, while materials, energy, and financials lagged [3] - The report anticipates a volatile phase for the Chinese stock market in Q3, with weakening fundamentals in consumption and profits, but continued liquidity may lead to structural gains [3] - The US stock market saw gains led by financials, technology, and consumer staples, with TSMC's ADR hitting new highs due to strong AI chip demand [3] Retail Performance - Xtep's retail sales growth in Q2 2025 was slightly below expectations at low single digits, attributed to increased competition and weak e-commerce growth [5][6] - The company reported a healthy inventory turnover ratio of 4-4.5 months, indicating strong inventory management [6] - Retail sales growth improved in July, driven by summer demand and promotional activities, with e-commerce performance particularly strong [6] Strategic Initiatives - Xtep is progressing with its DTC (Direct-to-Consumer) transformation, planning to repurchase 100-200 stores in Q4 and 300-400 stores in FY26, with capital expenditure of approximately 400 million RMB [6] - The company is also upgrading its product and membership management systems to enhance DTC operational efficiency [6] Investment Rating - The report maintains a "Buy" rating for Xtep with a target price of HKD 7.20, based on a 14x FY25 forecast P/E ratio, which is attractive compared to the historical average of 15x [5][6]