After Hours Summary: HUM +11.8%, CVS +6.6%, UNH +5.4% higher on WSJ report that private Medicare rates to rise; AVGO +3.1% on $10 bln share repurchase program; PCRX +15% settles patent litigation; LEVI +2.6%, PLAY +2.5% on earnings
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: LEVI +2.6%, PLAY +2.5%
Companies trading higher in after hours in reaction to news: PCRX +15% (settles patent litigation), HUM +11.8% (Private Medicare plans to get large rate boost from Trump administration next year, according to WSJ), CVS +6.6% (Private Medicare plans to get large rate boost from Trump administration next year, according to WSJ), UNH +5.4% (Private Medicare plans to get large rate boost from Trump administration next year, according to WSJ), MRVL +4.2% (to sell its automotive ethernet business to Infineon for $2.5 bln), PNC +4% (names former BlackRock exec as president), AIR +3.3% (forms joint venture with KIRA Aviation), AVGO +3.1% (authorizes new $10 bln share repurchase program), NDAQ +2.9% (reports March trading volume), AGX +2.5% (receives notice to proceed on contract), GME +0.9% (CEO/Chairman Ryan Cohen bought 500000 shares), FANG +0.8% (files for 6,842,625 share offering by selling shareholder), NKE +0.8% (Director bought 8600 shares), CACI +0.4% (wins US Navy $66 mln task order), AAPL +0.4% (Consumers rushing to buy iPhones before tariffs, according to Bloomberg), CORZ +0.3% (provides March data)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: CVRX -18.2%, GBX -4.1%
Companies trading lower in after hours in reaction to news: ASR -5% (reports March traffic)
Private Medicare Plans to Get Big Payment Boost From Trump Administration
Medicare Advantage plans will get a 5.06% rate increase, well above the 2.23% bump that the Biden administration proposed
The Trump administration will substantially increase payment rates for Medicare insurers next year, generating more than $25 billion in additional revenue for the industry and doubling the boost proposed in January.
The rate increase of 5.06%, compared with 2.23% in the earlier proposal from the Biden administration, overshoots even optimistic expectations from many Wall Street analysts, and will likely lead to a rally in the shares of big Medicare insurers such as UnitedHealth Group, Humana and CVS Health, parent of Aetna.
The Centers for Medicare and Medicaid Services announced the increase for 2026 payment rates on Monday. Investors are expected to view the bump as a sign of the Trump administration’s support for Medicare Advantage, the program under which private insurers administer the benefits of the federal program for older and disabled Americans.
The Medicare agency said the increase in the planned payment rate reflected rising medical costs, and that more recent data had led to the steeper final rise compared with the January proposal.
The agency said it is “ensuring that Medicare Advantage continues to offer access to critical services in an efficient, accountable manner, further strengthening the program’s ability to serve beneficiaries.”
The Trump administration did stick with a Biden administration policy change that limits certain billing practices that have boosted payments to Medicare Advantage insurers. The change was being phased in over three years, to be completed in 2026, and the agency rejected suggestions from some insurers to pause the process.
The rate increase, combined with a rule issued last week that withdrew a Biden administration proposal to cover drugs for obesity, provides a turnaround for big insurers after a difficult year when the long-profitable Medicare business became a drag on margins and share prices.
Mehmet Oz, the new head of the Medicare agency, who was confirmed last week, had long been a strong supporter of private insurers’ role in Medicare.
More recently, though, he publicly criticized Medicare Advantage industry practices that can increase insurers’ payments by documenting more diagnoses in their patients. Medicare Advantage insurers get higher payouts when patients have certain conditions. During his Senate confirmation hearing, he criticized “upcoding” in Medicare Advantage and said, “I pledge if confirmed I will go after it.”
The Wall Street Journal reported in a series of articles last year that the federal government paid Medicare Advantage companies more than $50 billion for payment-boosting diseases that weren’t identified by any treating doctors or hospitals from 2019 to 2021. Findings from the stories were referenced in senators’ questions to Oz.
Former Tesla exec Drew Baglino’s new startup is rethinking the electrical transformer
Former Tesla executive Drew Baglino has a new startup developing solid-state transformers for the electric grid, Axios reported.
The new company, Heron Power, is raising between $30 million to $50 million for a Series A, according to the report, with Capricorn Investment Group pegged to lead the round.
Baglino was a longtime employee at Tesla, starting at the company in 2006, two years before Elon Musk took over as CEO. He rose through the ranks, designing the powertrain for the first Model S and leading engineering for Tesla’s battery storage products before being named senior vice president of powertrain and energy.
Baglino left Tesla last April, the same time the company laid off 10% of its staff.
In founding Heron Power, Baglino is tackling a part of the electrical grid that hasn’t seen much innovation in over a century. Transformers have been largely unchanged in that time, and having been commoditized, the majority of them are now made overseas.
Solid-state transformers are more capable than existing transformers, regulating dips in voltage that might arise from solar panels and wind turbines. They’re also a lot more compact, can quickly transition from one source of power to another, and can be actively managed, boosting grid stability.
Heron Power isn’t the only startup hoping to shake up the transformer market. Singapore-based Amperesand is also in the process of raising a Series A after closing a $12.5 million seed round in early 2024. Like Heron, Amperesand also counts Tesla alumni among its executive ranks.
Closing Stock Market Summary
The stock market exhibited extreme turbulence on the first session of the week on above-average volume. The S&P 500 (-0.2%), which traded in bear market territory (i.e., 20% below its recent peak) near its worst level of the session, swung more than 400 points between its intraday high and low. The index was down 4.7% shortly after the open and surged 3.4% at its high.
The Nasdaq Composite, down more than 800 points at its low, closed 0.1% higher thanks to rebound action in mega caps and chipmakers.
The initial bounce off session lows coincided with an erroneous report that NEC Director Kevin Hassett said President Trump is considering a 90-day pause on the tariffs, except for China. The White House called the report fake news, and President Trump later indicated that the U.S. will impose an additional 50% tariff on imports from China, starting Wednesday, if China does not withdraw its 34% tariff on U.S. imports.
Selling increased in response, but major indices remained well above their worst levels of the session. One factor keeping equity indices elevated relative to session lows was the reversal in the Treasury market.
Market rates have been sinking on safe-haven interest of late, but the 10-yr yield jumped 17 basis points today to 4.16% and the 2-yr yield rose six basis points to 3.73%.
- Dow Jones Industrial Average: -10.8% YTD
- S&P 500: -13.9% YTD
- S&P Midcap 400: -16.1% YTD
- Russell 2000: -18.8% YTD
- Nasdaq Composite: -19.2% YTD
Today's economic data was limited to consumer credit, which decreased by $0.8 billion in February (consensus $15.1 billion) after increasing by a downwardly revised $8.9 billion (from $18.1 billion) in January.
- The key takeaway from the report is that February marked the third contraction in consumer credit in the last four months.
L’éditorial de Jacques-Olivier Martin: «Trump écoutera-t-il Musk sur les droits de douane?»
Alors que la panique gagne les marchés, le patron de Tesla a plaidé pour un accord de libre-échange total avec l’Europe. Bruxelles défend la même stratégie.
Les Bourses asiatiques qui s’effondrent au petit matin, les places européennes qui dévissent à leur tour, Wall Street qui chancelle un peu plus tard… Des milliers de milliards d’euros de capitalisation boursière effacés en une journée. Donald Trump a provoqué lundi une panique boursière, conséquence directe de ses droits de douane réciproques sur toutes les importations.
Ce choc planétaire ne présage rien de bon. Dans une économie mondialisée, où un même produit peut traverser cinq frontières avant d’être achevé, taxer, c’est désorganiser les chaînes de valeur, renchérir les coûts, plomber la compétitivité. À court terme, on le voit, les marchés vacillent sur fond d’incertitudes, et les représailles se multiplient. À moyen terme, les échanges vont ralentir, les usines, souffrir. Et, plus tard encore, c’est l’innovation qui reculera, les économies qui s’appauvriront. François Bayrou avance un demi-point de croissance en moins pour la France si l’Amérique persiste. La BCE redoute jusqu’à 0,8 point de PIB perdu pour l’Europe.
Jusqu’à quand Donald Trump pourra-t-il résister à la pression des marchés ? : http://www.lefigaro.fr/conjoncture/jusqu-a-quand-donald-trump-pourra-t-il-resister-a-la-pression-des-marches-20250407
Mais le président américain ne veut rien entendre, en tout cas pour le moment. « Ne soyez pas faibles, ne soyez pas stupides », a lancé lundi Donald Trump avant l’ouverture des Bourses américaines, comme s’il avait toutes les cartes en main. Il peut certes stopper son offensive douanière, mais il ne maîtrise pas les réactions des pays qu’il attaque. La Chine, par exemple, s’est engagée dans le bras de fer en érigeant à son tour des barrières contre les biens américains.
Quant à l’Europe, elle cherche l’équilibre entre fermeté et ouverture : des contre-mesures sont programmées, mais Bruxelles propose aussi de supprimer tous les droits de douane sur les produits manufacturés entre les deux rives de l’Atlantique. Une porte de sortie raisonnable, gagnante pour tous ceux qui croient encore que le commerce sans barrière crée plus de richesse qu’il n’en détruit.
En se prononçant dimanche pour un accord de libre-échange total entre l’Europe et les États-Unis, Elon Musk, son conseiller très écouté, n’a pas dit autre chose. Est-ce que cela suffira à convaincre Donald Trump ? « Ne soyez pas stupide, Monsieur le Président », pourrait lui glisser le patron de Tesla…
Trump Orders New Review of Nippon-U.S. Steel Merger
White House says the review is meant to assist the president in determining whether further action would be appropriate
President Trump ordered a new national security review of Nippon Steel’s 5401 -7.05%decrease; red down pointing triangle plan to acquire U.S. Steel X 16.13%increase; green up pointing triangle, offering a new life for a $14 billion deal that was blocked by former President Joe Biden.
The White House on Monday said a fresh look conducted by the Committee on Foreign Investment in the U.S. would help the president determine whether further action would be appropriate. The review gives the administration the flexibility to craft an agreement that could allow the companies to complete a deal.
Nippon Steel said that “an objective, fact-based review of our proposed partnership with U.S. Steel will show that it strengthens American economic and national security so that U.S. Steel remains a proud American company.”
U.S. Steel shares surged 16% in afternoon trading.
The blockbuster deal, which would shift the storied U.S. steelmaker to a much-larger Japanese steel company, has been in limbo since President Trump took office earlier this year.
Biden blocked the merger in January, citing national security concerns after an earlier Cfius review. Nippon Steel and U.S. Steel are challenging the decision in federal appeals court, arguing that the deal wasn’t given fair consideration by the Biden administration.
“We appreciate and commend President Donald Trump’s leadership,” U.S. Steel said. “His action today validates our board’s bold decision to challenge President Biden’s unlawful order.”
The new Cfius review will be conducted de novo, meaning it won’t be bound by previous decisions, according to the White House.
Nippon Steel and U.S. Steel struck their deal in December 2023, following a monthslong bidding process conducted by the Pittsburgh-based company. U.S. Steel shareholders approved the sale of the company a year ago, though the United Steelworkers union has opposed it.
For Nippon Steel, acquiring U.S. Steel would provide an entry point to the U.S. steel sector, where prices have been higher than many overseas markets. Nippon Steel has struggled for years in its home market with falling steel demand and anemic prices.
Both Trump and Biden had opposed the deal over the past year. Since taking office, though, Trump has encouraged Nippon Steel and U.S. Steel to restructure their deal so that the Japanese company would invest in the U.S. steelmaker, without fully owning it.
Nippon Steel executives said they would discuss options with the U.S. government, but that large capital expenditures would only be possible if the Japanese firm could invest in equity. Nippon Steel has said that a joint venture with U.S. Steel wasn’t appealing, since that would limit the Japanese company from fully deploying its technology and operational strategies.
“Regardless of how much scrutiny the proposed USS-Nippon deal receives, it does not alter the urgent threat it poses to our national and economic security, the long-term future of the steel industry or our members’ jobs,” said Dave McCall, president of the United Steelworkers.
By launching another review of the deal the Trump administration would be able to fashion its own security agreement with Nippon Steel. A second review also would help the Trump Justice Department defend the companies’ allegations that the deal wasn’t given adequate consideration, analysts said.
“I think this is more pro-Nippon than negative,” said Elena McGovern, managing director for Washington-based Capstone, a national security and business policy consulting firm.