- Market Commentary -

February 26, 2010 (FinancialWire) — The following is the follow-up commentary from Dr Joe Duarte’s most recent commentary (at http://www.financialwire.net/?s=djdrtreg0001):

Dr. Joe Duarte recently noted:

Shares of HMO companies Humana (NYSE: HUM) And Aetna (NYSE: AET) remained steady after the Beltway Health Summit.

Duarte added: 

There is something to be said when shares of a business sector which is under the radar outperforms the expectations of those who may be negative on the sector. In this case, it seems as if the Democrats are about to try to push health care reform through Congress without Republican support.

The problem for the Democrats, and what the market could be hanging onto here, is that the majority of the public doesn’t seem to want the kind of reforms that are being proposed. According to Rasmussen Reports.com: “President Obama and congressional Democrats are citing a jump in rates by a California health insurer as grounds for getting their national health care plan back on track, but voters are still more fearful of the federal government than private insurance companies when it comes to health care decisions.” Here’s the kicker: “A new Rasmussen Reports national telephone survey finds that 51% fear the federal government most when it comes to such decisions. Thirty-nine percent (39%) fear private insurance companies more.” According to the report, these views are unchanged since August 2009.

Overall, it looks as if the White House and the Democrats are pushing on a string as “Forty-one percent (41% ) of voters favor the proposed health care plan, while 56% oppose it. Just 23% Strongly Favor the plan while 45% are Strongly opposed. Support for and opposition to the plan are at the same levels they’ve been at since just after Thanksgiving.”

Duarte’s conclusion:

The fact that these two HMO stocks took a negative day for the stock market in stride is a signal that the market does not believe that the Democrats could pass any meaningful health care reform without significant consequences in the fall midterm election.   More to the point, even if they pass any reform, the market seems to be betting that after the election much of the reform won’t be enacted or will have to be retracted.  On the other hand, the market could be wrong.  All we can do is watch what happens and react accordingly. Making bets on the outcome at this point, may be prohibitively foolish.

For more insight and commentary from Dr. Joe Duarte (http://www.joe-duarte.com/), can be found by visiting Dr. Joe Duarte’s “Market I.Q.’ (at http://www.joe-duarte.com/free/order_choices.asp), Duarte’s “Intelligent Forecasts” (at http://www.intelligentforecasts.com), as well as by reading Duarte’s books (available via http://www.amazon.com/), which include “Market Timing For Dummies”, Successful Energy Sector Investing,” “Successful Biotech Investing”, “Successful Energy Sector Investing” and “After-Hours Trading Made Easy” (co-authored by Duarte).

Dr. Joe Duarte, In addition to regularly contributing to Investrend Weblogs (http://www.investrendweblogs.net/jduarte/), has logged many appearances on CNBC and is a frequent radio guest.  One of CNBC’s original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990.  He is a featured columnist on Stockwatch.com. His articles and commentary have been featured on Marketwatch.com, Barron’s, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines.  In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.

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