30 January 2018 at 14:32 GMT
- Amazon, Berkshire, JPMorgan announce healthcare partnership
- New initiative set to provide healthcare to US employees
- Deal sends shares of traditional healthcare giants down in pre-market
We have major news out in the US pre-market session... Amazon, Berkshire and JPMorgan are about to shake up the US healthcare system.
This is major risk-off factor for existing US healthcare providers, whose valuations reflect an above-normal profit environment in a system that is rigged against the consumer.
As we discussed back in November 2016, US health care is broken
. The country spends more than twice as much of its current GDP on health care as does the second-ranked nation, and this is sucking much-needed resources out of the economy that could be spent on improving infrastructure, education, and quality of life.
The Bloomberg report published today
claims that Amazon, Berkshire, and JPMorgan are setting up a separate health care company to provide healthcare services to their US employees without any profit-making incentive.
Shares of UnitedHealth, Aetna, Cigna, Express Scripts etc. are all down more than 5 % in pre-market trading
Here is a breakdown of US healthcare providers and service companies in our Equity Radar…given this single event the total score should be ignored for now:
Source: Saxo Bank
— Edited by Michael McKenna