UnitedHealth Group Leads the Dow Jones Today as Market Waits for Fed Taper Announcement

Federal Reserve to give latest update on quantitative easing at 2 p.m. EDT.

Mar 19, 2014 at 1:30PM

The Dow Jones Industrial Average (DJINDICES:^DJI) was up eight points, to 16,344, at 1:30 p.m. EDT while the market waits for the Federal Reserve's statement on the taper of its economy-stimulating quantitative easing effort. The S&P 500 (SNPINDEX:^GSPC) was up one point to 1,873.

UnitedHealth Group (NYSE:UNH) was pulling the Dow Jones up with a 2.8% rise to $80.18. Health care is the only sector in the S&P 500 up for the day, rising 0.3%.


Source: Finviz.com.

A Kaiser Family Foundation report released yesterday found that health insurers had largely maintained their market share despite all the new insurance enrollments due to Obamacare. We are now less than two weeks away from the March 31 deadline to sign up for health insurance. There were only 943,000 new enrollees last month, which brought the total to 4.2 million, well below the government's target of 7 million. Since we're a nation of procrastinators, March's numbers should be better than February, though I have not seen anything to confirm this or explain why health care is up for the day. With Wall Street plugged in to the government bureaucracy, it wouldn't surprise me to learn there is another change coming that will be beneficial to health insurers that we don't know about yet. No matter what happens, Fool analyst Dan Carroll recently highlighted UnitedHealth as one of the three health care dividend giants every investor needs to know about.

What will the Fed do?
The Federal Reserve Open Market Committee's statement is due in less than 30 minutes, followed by Federal Reserve Chairwoman Janet Yellen's press conference at 2:30 p.m. The central bank is expected to announce another $10 billion taper of its asset purchases, to $55 billion a month. It also appears likely to announce changes to its language regarding when the committee will raise short-term interest rates from the current near-zero interest rate policy.

In previous statements, the Fed has said "the current exceptionally low target range for the federal funds rate of 0 to 1/4 percent will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."

More recently, the committee added to its statement the line, "It likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent."

With unemployment at 6.7%, members of the Federal Reserve have been out in the media emphasizing the phrases "at least as long as" and "well past the time" when it comes to the 6.5% unemployment level. The Fed wants to reassure the market that interest rates will remain at zero for quite some time.

The Fed is expected to change the language away from an explicit level of unemployment to something more vague. Expect to see some line similar to this language from its current statement, that "the Committee will also consider other information including additional measures of labor market conditions." The key point is that interest rates of close to zero are here to stay for another year or two. That's good news for banks, but bad news for savers.

Foolish takeaway
So what can an investor do in times like this? It's hard to stay sober while everyone around you is drunk on Fed-stimulus punch, telling you to join in on the fun. My advice: Keep learning, focus on your goals, have an investing plan, stick to it, and ignore the crowds.

Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.

Dan Dzombak can be found on Twitter @DanDzombak or on his Facebook page, DanDzombak. He has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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