Recent concerns over the impact of the coronavirus outbreak had put a strain on the national stock indexes in the past week. However, a surprising surge in healthcare stocks following the Super Tuesday primary elections has provided a much-needed lift to the markets.
Former Vice President and current Democratic candidate Joe Biden had a successful showing on Tuesday, winning nine out of the fifteen states in contention. This victory led to a substantial increase in healthcare stocks. The Health Care Select Sector SPDR ETF (XLV) saw a 3% rise, UnitedHealth surged by 10%, and Centene jumped up by 12.9%. These sudden spikes in healthcare stocks brought some relief to investors concerned about the impact of the virus fears. Consequently, the Dow Jones Industrial Average increased by 610 points, approximately 2.3%, while the S&P 500 and Nasdaq also experienced gains of 1.9% and 1.8%, respectively.
Biden’s triumph over fellow Democratic candidate Senator Bernie Sanders likely reassured investors. Analysts in the business world have not hidden their aversion to Sanders due to his far-left policies. Ed Yardeni, President and Chief Investment Strategist at Yardeni Research, expressed this sentiment in a statement to CNBC.
Yardeni explained, “Investors are wary of Bernie’s proposals to significantly raise taxes on the wealthy and provide free services to all. His belief in providing everything for free above all else seems to overshadow the value of freedom. It’s no wonder investors view him as a carrier of socialist ideas that may have a detrimental effect on the economy.”
Similarly, investors have reservations about Senator Elizabeth Warren’s plans to break up large financial institutions and increase taxes. Josh Brown, CEO of Ritholtz Wealth Management, shared his forecast for the market concerning Warren.
Stocks are likely to react positively to Warren’s expected concession, as they did to Biden’s strong performance. Wall Street experts have long harbored concerns about her due to her in-depth knowledge of financial matters.
— Downtown Josh Brown (@ReformedBroker) March 4, 2020
