Meet the new boss, same as the old boss.

UnitedHealth Group announced Tuesday that CEO Andrew Witty, who apologized on a conference call for the company’s recent performance, is stepping down for “personal reasons.” He’ll be replaced by chairman Stephen Hemsley, the former longtime CEO who turned the country’s largest health insurer into a financial juggernaut and is now in charge of a laundry list of struggles.

Medicare Disadvantage

Last month, UnitedHealth reported its first quarterly earnings miss since the 2008 financial crisis and slashed its 2025 profit forecast to $26 to $26.50 a share, down from a previous range of $29.50 to $30. In the subsequent weeks, the company’s stock price fell over a third, wiping away $190 billion in market value.

In a dramatic escalation Tuesday, UnitedHealth pulled its downgraded forecast altogether, placing the lion’s share of the blame on Medicare Advantage. The federal program pays private health insurers to provide Medicare-covered benefits to seniors and people with disabilities, and UnitedHealth is its biggest player. According to a KFF analysis, the company accounted for 29% of enrollees, or roughly 8 million people, last year.

The catch is that Medicare Advantage pays private insurers a flat fee per enrollee, and UnitedHealth said last month that care use by its enrollees increased by more than double the amount expected in the previous quarter, squeezing margins. UnitedHealth’s medical-cost ratio, an important metric used to assess the profitability of healthcare companies, rose to 84.8% in the first quarter, up from 84.3% last year. Enter Hemsley, who has all this and more to contend with:

• The Department of Justice is investigating how UnitedHealth reported diagnoses that would net additional payments from Medicare Advantage plans, while a separate DoJ antitrust probe is looking at its acquisitions of physician and doctor groups. The company is also still reeling from the reputational damage caused last year when it suffered the largest-ever health industry data breach — information on 190 million people, more than half the US population, may have been compromised.
• Although Medicare Advantage may continue to be a drag this year, the Trump administration announced last month plans to dramatically increase the payment rates the federal government makes to Medicare insurers in 2026. The Centers for Medicare and Medicaid Services proposed a rate increase of 5.06%, more than double the 2.23% proposed previously by the Biden administration.

Boomerang CEOs: When former and new CEO Hemsley first took over UnitedHealth in 2006, it had revenue of just $71.5 billion. That grew to over $200 billion in 2017, the year he stepped aside to become chair. Boosting the company’s fortunes may be a tougher task this time: A 2020 study by MIT Sloan Management Review found companies’ stocks perform 10.1% lower under so-called boomerang CEOs. Then again, UnitedHealth’s shares fell 17.7% Tuesday, so you could say he now has room to grow.

The huzzahs out of Washington, D.C., and Beijing post US-China trade talks are obscuring the biggest beneficiary of the Trump administration’s trade agenda — Japan.

Some $57 billion in foreign investments poured into the country’s securities in April as investors and central bank managers sought shelter from the Trump administration’s trade herky-jerky. According to the Japanese Ministry of Finance, net foreign purchases were substantially higher than monthly inflows on record dating back to 2005, and more than three times the month’s average over the past 20 years. The country may stick the landing even as global trade tensions ease while a broader macroeconomic trend — de-dollarization — threatens to keep diverting investments away from the US.

Dollar Frowns

The US stock market is all smiles, with Big Tech bouncing and pulling the S&P 500 back in the black year-to-date, yet the dollar chart frowns.

While the US Dollar Index (DXY) — a measure of the greenback’s relative value against a basket of six currencies including the euro and the Japanese yen — got a little boost recently, Trump’s tariff tactics may have accelerated the move away from dollar dominance. What investors have been doing with their money supports that theory:

• For starters, the record movement of US funds into Japanese securities last month looks like an effort to distance investors from the American currency, Yujiro Goto, chief FX strategist at Nomura, said in an interview with the Financial Times. Japan fits the profile of a market with the capacity to handle an influx of cash, he explained, and the rush into Japanese stocks as well as bonds backs up the idea.
• A Bank of America survey of institutional investors in May revealed that shorting the US dollar (a bet that it would fall) had become fund managers’ favorite play. Also, investor exposure to the dollar has fallen to a 19-year low.
• Warren Buffett’s yen-balanced play in Japan also appears to be paying off handsomely. Berkshire Hathaway has been acquiring stakes in the country’s largest trading companies since July 2019 and financing those investments with yen-denominated debt.

More broadly, dollar reliance has been waning for decades. By the International Monetary Fund’s estimates, official foreign reserve holdings show $6.5 trillion to $7 trillion in US dollar-denominated assets as of December 2024, higher than the $1 trillion held in 2000. However, those assets as a percentage of total foreign reserve holdings have declined from 72% to 58% over the same period.

Trump Card. In a preview of how Japan might approach trade negotiations with the Trump administration, Finance Minister Katsunobu Kato said last week that the nation’s $1.1 trillion in US Treasuries were “a card on the table.” Trade talks are set to resume this month after a reported standoff on auto tariffs, an issue that has become more pressing with Honda and Nissan forecasting grim profit figures.

Elon Musk just might be able to catch the midnight train connecting Baltimore to Virginia, via the nation’s capital. The US government has tapped the billionaire’s Boring Company as a potential candidate to help build an $8.5 billion tunnel on the busy route, according to The New York Times.

The Federal Railroad Administration, the agency that oversees US railroads, asked Musk’s company to check in on the progress of the 1.4-mile Frederick Douglass tunnel, which will replace an existing one that’s more than 150 years old. The project, which Amtrak has called its “single largest infrastructure effort,” has struggled with missed deadlines and ballooning costs.

The Boring Company, which is competing with other firms for the contract, told Amtrak it can help build the tunnel cheaper and more efficiently.

Train to Nowhere

Elon Musk has a complicated history with Amtrak. He has publicly criticized the service and other transportation projects, saying rail travel should be privatized. Amtrak responded that it’s on track to turn a profit for the first time in its history.

At the same time, Musk has promoted his own ideas about the future of getting from point A to B — rockets from SpaceX and cars from Tesla, along with tunnels from the Boring Company. But so far, the Boring Company has lived up to its name more than to Musk’s dreams:

• The Las Vegas car tunnel it completed the first phase of last year has been called pointless and impractical and scrutinized for potentially skirting labor and safety regulations.
• Other ambitious projects have quietly been scrapped or delayed, including the East Coast hyperloop Musk said he got a verbal greenlight to build in 2017. A loop between Baltimore and Washington was supposed to be finished in 2021, but the project was removed from the company’s website that year instead.

Crossed Tracks: If the Boring Company wins this contract, it could be a conflict of interest for Musk, who has a long LinkedIn resume. In addition to owning or running six companies, he led the Department of Government Efficiency to cut more than 280,000 government jobs this year, Challenger found. Several of Musk’s companies do business with government agencies that could be wary of DOGE’s bite — or just aware that Musk is Trump’s BFF. Last month, the White House installed SpaceX’s Starlink internet service and hosted a Tesla-only car show on the lawn.