Will Obamacare be good for stocks?
The Supreme Court has given the thumbs up to the Affordable Care Act. Now investors wonder what's next.
The deed's been done. The highest court in the land has given its approval to President Barack Obama's health care reform legislation and its controversial insurance mandate. The justices held the mandate constitutional as a tax but not as a penalty. Same difference. If you don't play, you'll pay.
Stocks have sold off in response to the decision, which is seen as an expansion of the government's power, a precedent for increased regulation, and other broad-stroke negatives that are scaring away investors. But for health care stocks, according to Barclays Capital, the decision could actually be a boon to their bottom line.
The risk for insurance providers was that the Supreme Court would cut down the individual mandate but leave the other provisions of the law intact -- provisions that require them to accept people with preexisting conditions. The fact that it didn't, according Barclays' U.S. Managed Care analyst Joshua Raskin, should be worth a high-single-digit percentage move in names like Amerigroup (AGP), Molina (MOH) and Centene (CNC).
Why? It ensures a steady stream of new customers. These names are moving because of the court's favorable decision that the federal government can't cut a state's existing Medicaid funding if there is noncompliance with expansion provisions in the Affordable Care Act. Raskin notes that expansion in Medicare set for 2014 will bring 16 million to 20 million new patients into the system.
As for the rest of the market, we're mired in an ever-tightening trading range, as shown in the chart above. All eyes remain on the eurozone summit.
While the overall market is a bit of a snoozer, there is plenty of excitement just beneath the surface. Just look at action in weight-loss-drug maker Orexigen Therapeutics (OREX). Shares have surged in response to the Food and Drug Administration's first approval of a weight-control medication in more than a decade. Orexigen is working on a medication called Contrave, with a targeted 2014 release.
I recommended OREX to my subscribers on June 13. The position is now up more than 50%.
Check out Anthony's investment advisory service The Edge. A two-week free trial has been extended to MSN Money readers. Click here to sign up. Contact Anthony at email@example.com and follow him on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.
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GM and Chrysler will be needing a new Cash for Clunkers/ Volt handout.
This will also make any chance Oduffus had at reelection drop in probability dramatically.
The other side is that many employers are going to force an enormous weight on this bill by immediately removing all employees from their insurance policies and WHEN, NOT IF, the estimates for the costs of Oblamocare explode to 2.5-4x what the GAO guessed them at (since no one has ever had all the specifics to make estimates) and unemployment rises as the NEW RECESSION gets underway it will have to be far more borrowing or cutting back, and since Obuttboy, hasn't a clue how to cut back on anything ............ big troubles for all American except politicians!
The only "positive" taxes that I can think of are some types of consumption taxes. Positive in that if people are able to afford to purchase these - it means these is excess money to do so. Especially those of goods that are truly optional. Not gasoline, food, etc. Any mandated tax that is enforced with further fiscal penalties is not good for anyone (except the government). Maybe, some types of collection agencies that are subcontracted to enforce the paying of taxes. Other than that, it is a ridiculous notion.
I like Presidents Romney's first order, to EXEMPT all companies and individuals from Obamacare. A veryeasy out. Instead of just t=your 3,000 odd campaign contributors exmepted, everyone will be.
That should work just fine....
“Obama Has Been The Best President For The Stock Market” .. and the worst president for the middle class ever….
Look, rich people get wealthy because they are astute at following the flow of money. The more money flows, the better the chances to tap into that flow, invest and get rich. President Obama and his push to flow money through the economy by creating huge deficits to be paid by future generations is the best thing that could happen to the market and wealthy investors. At the same time it is the worst thing that can happen to future generations and the middle class that will have to pay for it by higher taxes.
So yeah, Obama is great for rich people, not such for the middle class and poor people still looking for jobs.
ok look. corporations DON'T MATTER! They do not employ the number of people you think they do. Inform yourself!
...not to mention, um, gosh... THEY ALREADY PROVIDE INSURANCE.
Stop the mindless blather and regurgitated horsesh!t. It stinks.
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[BRIEFING.COM] S&P futures vs fair value: +12.10. Nasdaq futures vs fair value: +6.00. The S&P 500 futures trade 12 points above fair value in reaction to a better-than-expected nonfarm payrolls report.
February nonfarm payrolls came in at 175,000 while the Briefing.com consensus expected a reading of 163,000. Nonfarm private payrolls added 162,000 against the 170,000 expected by the consensus. The unemployment rate rose to 6.7% while the consensus expected a reading of ... More
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