Health care mergers in doubt as Amazon looms large

1. Health care isn't so healthy: The fates of two giant health care mergers are suddenly in...

Posted: Aug 5, 2018 11:39 PM
Updated: Aug 5, 2018 11:40 PM

1. Health care isn't so healthy: The fates of two giant health care mergers are suddenly in question.

Drug store chain CVS wants to buy insurer Aetna, but the California Insurance Commissioner wants the Justice Department to block the $69 billion deal, citing concerns that prices will go up and competition will decrease.

Another insurer, Cigna, hopes to buy pharmacy benefits manger Express Scripts for $67 billion. However, there were reports last week that activist investor Carl Icahn has taken a stake in Cigna, with the hopes of convincing shareholders to vote against the Express Scripts merger on August 24.

Icahn reportedly thinks Cigna is overpaying. Cigna and Icahn did not respond to requests for comment from CNNMoney.

Cigna and Aetna both reported solid earnings last week -- and CVS is due to release its latest results on Wednesday morning. Investors will be eager to hear if CVS has any comment about the California Insurance Commissioner's claims. CVS and Aetna shareholders have already approved the deal.

Related: What merger mania means for health care

It's still not exactly clear what regulators in Washington think about these mergers. There were reports last month that the Justice Department would likely greenlight the CVS-Aetna deal.

But two mega insurer mergers were blocked by federal judges early last year on antitrust grounds. Aetna had hoped to combine with Humana while Cigna was planning to merge with Anthem.

It's possible that antitrust officials will decide CVS-Aetna and Cigna-Express Scripts won't harm consumers given the rapidly changing landscape in health care amidst emerging competition.

Amazon is creating a health care company along with JPMorgan Chase and Warren Buffett's Berkshire Hathaway. Amazon -- who else? -- also announced in June that is buying online pharmacy PillPack, which already has pharmacy licenses in all 50 states. Shares of CVS and its rival Walgreens both plunged the day of the PillPack acquisition.

Investors are increasingly worried that Amazon, which already has turned the worlds of retail, media and cloud computing on their heads, is now looking to become a big player in health care too.

That's a key reason why CVS shares are down 10% this year. New Dow component Walgreens has fallen 7%. And the stock of drug distributor Cardinal Health, which will report its latest results Monday, has plunged nearly 20%.

2. Media madness: Disney and most of 21st Century Fox are combining. So how strong will the new company be?

Disney will report earnings on Tuesday. "Solo" was a disappointment, and the company could face questions about its future plans for the "Star Wars" franchise. But "Incredibles 2" and "Avengers" were huge blockbusters in the spring.

Fox, which reports on Wednesday, could discuss its plans for live television, sports and news programming that will dominate the remainder of 21st Century Fox after Disney buys pretty much everything but Fox News, Fox broadcast network and FS1.

And Viacom will report on Thursday. CEO Bob Backish is majority owner Shari Redstone's pick to eventually lead a combined CBS-Viacom, a proposed merger that CBS is fighting in court. Following sexual harassment allegations against CBS CEO Les Moonves, Backish's comments will be closely scrutinized.

3. Inflation watch: Prices are rising, gasoline remains stubbornly expensive and commodity prices are going up. Inflation's kind of a thing again.

We'll get a better sense of how much prices are rising this week when the Labor Department reports its Producer Price Index on Thursday and its Consumer Price Index on Friday.

The Federal Reserve when it considers whether to boost interest rates. As inflation has picked up in recent months, the Fed has gained more slack to keep raising rates.

Though inflation isn't high by any stretch, it's close to even with the raises most Americans are getting, wiping out any potential wage growth. The Labor Department reported Friday that workers' paychecks grew just 2.7% compared to the same time last year.

4. Baby, you can drive my car: Uber hasn't destroyed the rental car industry. Not yet, anyway.

Hertz will report its quarterly finances on Monday, and Avis Budget Group will report on Tuesday. Both companies are trying to redefine themselves with partnerships and deals as ride-sharing companies take away mind share and market share of the transportation business.

Will they be able to act quickly enough to impress investors? This week will serve as a big test.

5. Iran sanctions: On August 6, the United States will once again sanction Iranian purchases of dollars and metals, including gold. It will also prevent Americans from buying the Iranian currency (the rial), the country's debt and some Iranian goods.

The sanctions are part of the Trump administrations' decision to wind-down America's involvement in the multi-nation agreement aimed in part at preventing Iranian development of nuclear weapons. More sanctions, mostly involving energy and shipping, will take effect November 4.

Iranians have been hoarding gold in the run-up to sanctions, according to the World Gold Council.

6. Coming this week:

Monday — Tyson, SeaWorld, Weight Watchers and Hertz earnings

Tuesday — Disney, Snap, Papa John's and Avis Budget Group earnings

Wednesday — 21st Century Fox, CVS, New York Times and Roku and earnings

Thursday — Viacom and Tronc earnings, PPI report, Samsung holds its "Unpacked" event

Friday — CPI report

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 155787

Reported Deaths: 2212
CountyCasesDeaths
Multnomah31892529
Washington21265212
Marion18486285
Clackamas13399175
Lane10287127
Jackson8407112
Umatilla766082
Deschutes595659
Yamhill378364
Linn359156
Malheur335158
Polk306942
Klamath279155
Douglas248554
Benton234416
Josephine234452
Jefferson196028
Coos149719
Union128419
Columbia127021
Wasco122126
Lincoln113320
Hood River106929
Morrow104914
Clatsop7756
Crook77518
Baker6597
Curry4296
Tillamook4142
Lake3766
Harney2736
Grant2231
Wallowa1424
Gilliam531
Sherman530
Wheeler221
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 3573549

Reported Deaths: 52491
CountyCasesDeaths
Los Angeles119295421467
Riverside2897733792
San Bernardino2867552940
Orange2614083921
San Diego2606253303
Santa Clara1107551781
Kern103422877
Fresno955481443
Sacramento935281484
Alameda807771242
Ventura77749852
San Joaquin668291126
Contra Costa62720681
Stanislaus56235949
Tulare48013761
Monterey42261328
San Mateo39059515
San Francisco34291422
Santa Barbara32050413
Solano30115164
Merced29147401
Sonoma28193298
Imperial26909635
Kings22082220
Placer19861232
San Luis Obispo19696235
Madera15496214
Santa Cruz14671183
Marin13231197
Yolo12851185
Shasta11017174
Butte10970163
El Dorado9160100
Napa905369
Sutter888097
Yuba577337
San Benito577261
Lassen562419
Tehama508652
Nevada397274
Tuolumne396059
Mendocino381643
Amador346641
Humboldt321033
Lake316441
Glenn223023
Colusa213613
Calaveras191049
Siskiyou176014
Inyo131337
Mono12144
Del Norte10035
Plumas6536
Modoc4564
Mariposa3957
Trinity3705
Sierra1000
Alpine820
Unassigned00
Medford
Clear
54° wxIcon
Hi: 62° Lo: 32°
Feels Like: 54°
Brookings
Clear
55° wxIcon
Hi: 60° Lo: 35°
Feels Like: 55°
Medford
Clear
54° wxIcon
Hi: 42° Lo: 18°
Feels Like: 54°
Medford
Clear
54° wxIcon
Hi: 63° Lo: 32°
Feels Like: 54°
Klamath Falls
Clear
51° wxIcon
Hi: 51° Lo: 24°
Feels Like: 51°
Sunny and warm stretch continues
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events