Fed Out of the Way, Wall Street Focused on Presidential Election
$DIA, $SPY, $QQQ, $VXX, $AET, $CI, $UNH
Who becomes the next US President now Wall Street’s focus this week and beyond, beginning Monday with the 1st debate between Donald Trump and Hillary Clinton.
Mrs. Clinton’s lead in opinion polls has faded, and with just over 6 weeks until Election Day, some investors see a contest creating volatility in certain sectors, including health insurers, drugmakers and industrials.
Many on Wall Street worry about the uncertainty of this Presidential election.
Some investors believe US equities may edge higher this week after the US Fed last Wednesday left interest rates unchanged.
In a recent report, Wells Fargo (NYSE:WFC) said a Hillary Clinton presidency with a divided US Congress would have a “Neutral” impact on financial markets, and that a Donald Trump victory and a divided Congress could have a “slightly Negative” market impact.
To date the election has been too close to call and too far away to trade specific stocks against its outcome.
Many savvy investors see a Hillary Clinton Presidency as broadly negative for pharmaceutical companies because of criticisms she has made about high drug prices. Mrs. Clinton frequently said during the primary that she would fight pharmaceutical companies, part of an attempt to counter criticism that she was too closely tied to the insurance industry.
Donald Trump’s disapproval of FTA’s (free trade agreements) suggests that industrial companies and other major exporters could suffer should he become President.
With Donald Trump vowing to repeal the Affordable Care Act aka Barack Obamacare, and Mrs. Clinton promising to build on it, health insurance stocks could swing if the debate produces a clear winner.
Health insurers have been big winners since President Barack Hussein Obama signed his healthcare overhaul in Y 2010. UnitedHealth Group (NYSE:UNH) has jumped 325%, Aetna (NYSE:AET) is 234 percent higher and Cigna (NYSE:CI) has risen 257 percent. During the same frame, the S&P 500 rose 85%.
Have a terrific week