Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Earnings season is in full force on Wall Street, and as more components of the Dow Jones Industrials (DJINDICES:^DJI) start to report, the news they're providing is giving the market a much-needed boost after a gloomy start to 2014. Tomorrow morning, UnitedHealth Group (NYSE:UNH) and Goldman Sachs (NYSE:GS) will add their reports to the list, with Goldman continuing the litany of financial-company results while UnitedHealth gives an important read on the state of the health insurance sector following the implementation of Obamacare's insurance exchanges.
UnitedHealth is scheduled to release its previous-quarter financials at 6 a.m. EST and has scheduled a teleconference for 8:45 a.m. EST to discuss the results. Goldman expects to release its results at 7:30 a.m. EST, with a conference call to begin at 9:30 a.m. EST.
UnitedHealth investors have high expectations that the health insurer will have successfully navigated the opening of health-insurance exchanges under the Affordable Care Act to boost earnings substantially. With enrollment ongoing, the fourth quarter won't really reveal the long-term impact of Obamacare on UnitedHealth, especially as we're only now starting to get a solid sense of the demographic mix of people buying coverage on the exchanges. UnitedHealth has done a good job, however, of controlling costs and taking advantage of growth opportunities beyond its core U.S. business. Investors should look closely at the contributions that its stake in Brazilian insurance giant Amil brings to the table, as well as UnitedHealth's Optum unit, which incorporates a variety of health care services to give the company key diversification amid Obamacare's challenges.
Meanwhile, Goldman has a lot to prove to investors as it faces changing conditions in the capital markets. The turnaround in the bond market hurt Goldman's results last quarter, yet the investment bank has a long history of adapting to industry changes to tap the most promising profit opportunities in the business. The successful IPO of Twitter reestablished Goldman as a pre-eminent leader in equity underwriting, but new regulations like the Volcker Rule and the Federal Reserve's new look at banks' commodity businesses could pose a strategic threat as the company tries to navigate industry trends to find its best opportunities.
Given its high share price, Goldman has a greater chance of having the bigger impact on the Dow tomorrow. But UnitedHealth's outlook could have greater ramifications for the economy on the whole, especially as investors try to figure out exactly how Obamacare will ripple outward across the business community in its efforts to reform health care.