MARKET ROUNDUP | |
Dow | +38.82 to 18,135.72 |
S&P 500 | +2.51 to 2,101.04 |
Nasdaq | +15.67 to 4,982.81 |
10-YR Yield | -0.011 to 2.112% |
Gold | -$2.60 to $1,198.30 |
Crude Oil | -$0.65 to $50.88 |
The European Central Bank met today. At that meeting and in the post-meeting press conference, ECB President Mario Draghi confirmed that Euro-QE will start next week, running at a pace of 60 billion euros per month. On the surface, that sounds euro-negative.
But Draghi also talked up the euro-zone economy, and raised forecasts for both growth and inflation in the next couple of years. He said that policymakers “see objectives are gradually being obtained” and that risks “have diminished following recent monetary policy decisions.”
That’s not exactly a victory lap. But it does suggest that he doesn’t think the euro currency needs to go to zero and rates need to go to negative-1,000% in order to get growth back on track. You could argue that’s actually euro-supportive.
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The ECB Governing Council. |
At the same time, we learned today that initial jobless claims filings here in the U.S. rose 7,000 to 320,000 in the most recent week. That was the highest level since May.
A separate report from outplacement firm Challenger, Gray & Christmas said companies announced 50,579 layoffs in February. That was up 21% from a year ago, with energy sector cuts accounting for a sizable chunk of them.
Stronger growth in Europe, and somewhat weaker (but not recessionary) growth in the U.S.? After a period of time where everything and anything was breaking the dollar’s way? And when everyone except for five Martians went long the buck and short the euro? That would tend to argue for a lower dollar and euro bounce.
Stated another way, the markets are in a state of flux. I’ve argued for some“Big Reversals” in various assets, and advocated a strategy of buying in 2015 what you previously sold in 2014, and selling what you previously bought.
I’m seeing some encouraging signs, such as the fact supposedly “bearish” oil inventories news isn’t causing prices to fall. We’re still hovering around $50 a barrel, give or take, versus the January low of $43-and-change.
“Stated another way, the markets are in a state of flux.” |
But until we get some more clarity – on policy plans, currency values, and the state of the job market (tomorrow is the big data day there!) – I’m sitting on my hands for a bit in my shorter-term trading services, even as I’m continuing to pursue opportunities in services focused on longer-term trends.
So how about you? Do you think the market outlook is getting more or less cloudy? Are you interested in continuing to ride old trends, or do you agree that some big reversals in those trends are brewing? What do you think of the ECBs latest move? The news on the U.S. economy? Let me know at the Money and Markets website.
Our Readers Speak |
Obamacare’s day in court clearly grabbed your attention, as more than 150 comments came in regarding the latest legal challenge to the health care insurance program.
Reader Kathy B. said: “Obamacare needs to be scrapped and replaced. Tort reform, buying across state lines, health savings accounts … people need to have some skin in the game! Insurance should be available to the uninsurable.”
Reader John M. added that “Health care and health insurance have always been separate. Insurance is inherently inflationary due to the loss of quality and cost transparency. College costs rose when student loans became guaranteed. Medication costs rose when medications became covered in health plans. Home prices skyrocketed when mortgages were broadly guaranteed.
“Whereas you probably know which local grocer has the best prices on favorite items, which has the best bakery, which has the best produce, and which has the best meat and seafood. If you want to make healthcare affordable, you add transparency to the market and trust consumers to make suitable choices about health care from a broad menu of health care (not health insurance) choices. You don’t create a corporate welfare program for insurance companies and mandate consumers participate. Insurance is the cause, not the solution.”
But Reader John R. said there are ways to fix Obamacare without scrapping it entirely, and that coverage in a country like ours can and should be offered to those who can’t afford care. His view:
“Health care should be a regulated utility. It is needed in a developed economy, and as a community we are more productive if we have healthier people.
“Real health reform means actually getting rid of a system where we pay when sick and figuring out how health care dollars can be spent to reduce illness and incentivize healthy living. The only ‘socialized’ targets should be the children and elderly who tend not to have the resources or knowledge to invest in healthy behaviors.
“The ACA should be progressively amended not demonized. The intent was to decrease the embarrassing situation of poor health outcomes and excessive health care spending that left large numbers of people out of the health care loop.”
And Reader Mike S. summed up the anti-Obamacare argument in this simple fashion: “The Republican version of healthcare for the average American citizen: They (the 1%) have it and you (the 99%) don’t. :(“
Clearly there are no easy answers, and a lot of passion on both sides of the Obamacare debate. It’s a shame we’ll have to wait until June for a Supreme Court decision, as it leaves everyone in a state of limbo.
In the meantime, if you have any other thoughts you want to share on the U.S. health care situation, make sure you share them at the website.
Other Developments of the Day |
M&A action keeps heating up in the health care industry. The latest: Abbvie (ABBV, Weiss Ratings: C) agreed to buy Pharmacyclics PCYC, Weiss Ratings: B-) for $21 billion, or $261.25 in cash and stock.
PCYC was also in the sights of Johnson & Johnson (JNJ, Weiss Ratings: B+), but the health care giant got outbid. The deal will add the cancer treatment Imbruvica to Abbvie’s portfolio, which includes Humira for the treatment of arthritis.
Chinese policymakers admitted the economy is slowing there, and cut their 2015 growth forecast to around 7%. That would be down from 7.4% in 2014.
Of course, there have been questions about the accuracy of China’s economic statistics for a long time. So it’s tough to know how quickly GDP really is growing. But the real message here is that after cutting interest rates twice in the past few months, China doesn’t appear poised to launch a massive stimulus package to boost growth like it did in the wake of the Great Recession.
So who “won” at yesterday’s Supreme Court hearing on Obamacare? The analyses I’ve read were mixed. But it appears the court is divided on the legality of insurance subsidies in states with federal marketplaces, based on the questions that were asked of government and challenger attorneys.
A decision won’t be forthcoming until June. But it’s worth pointing out that hospital stocks like Tenet Healthcare (THC, Weiss Ratings: C) and Universal Health Services (UHS, Weiss Ratings: A-) rallied strongly yesterday. That suggests some investors are already anticipating a pro-Obamacare verdict based on what they heard in court.
Meanwhile, the U.S. ambassador to South Korea Mark Lippert is recovering after taking a knife to the face from a 55-year-old protestor. Kim Ki-jong was reportedly angry at U.S. policy in Korea.
If you have any thoughts on these stories, don’t forget to use the website to share them.
Until next time,
Mike Larson
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I don’t even bother to read the “opinions” of individual readers, as I/we have absolutely NO idea of their knowledge of what’s going on. Please get rid of them ASAP. I do very much appreciate your input, as I know at least a bit about your background. (Thanks, Martin!)
Your criticism is valid but also applies to virtually everything on the Internet, in fact people who claim credibility are the ones you should be the most suspicious of. I appreciate the wit and wisdom of many of Mike’s readers. Taken with the proverbial grain of salt I find it harmlessly entertaining and occasionally very insightful. You should lighten up and give it a try. You might have a previously undiscovered talent for commentary. You certainly don’t have a sense of humor. Jim
Agreed, Jim. I enjoy most of the comments, even those I disagree with, and sometimes even find some good tips. But isn’t that the same with the newspaper or magazines?? And yes, lighten up…..chill out a little. Life is too short to not listen a bit to your neighbors.
Roger
One of the greatest things we can all share is a point of view. We don’t all agree, however it is helpful in adding to or assisting with an informed position to develop policy. I wish congress would listen to this website and its contributors.
I need a wealth look up FOR HENRY LEE Dawson JR LIGHTININGRICH21012@OUTLOOK.COM
The only sensible solution is single payer, FREE healthcare for all (as in England) paid for by the government via higher taxes, of course. No insurance companies are involved.
Why is this solution which is that of most advanced countries not even discussed?
I submitted this idea a day or so ago and you, too, did not mention it or feature it. Are you, too, pressured by the insurance company lobby to keep this quiet? If so, shame on you!
I don’t want the government involved in my healthcare on any level. If you want a system that features hundreds of billions in fraud, waste and sub standard treatment than by all means get the government to do it. The VA is a great example. We treat our veterans like shit even though none of us wants that. Their number one cause of death at present is suicide. I just don’t see how the number of working people we have left could ever pay everyone’s healthcare bills. The greatest country on Earth must have a better solution.
I call B.S….. The VA system was running darn well until Cheney/bush took us into THREE wars and the Stock Market Crash and Depression of October 2007-2009…. The current problem is that thousands of veterans are returning and can’t find jobs and therefore, they are using the VA for their Medical care instead of the health insurance that was once there in private companies…. To make matters even worse, the funding for the VA was not increased to handle that huge spike in demand….
Richard,
You are right on!….. I’ve lived in England and America and England has a BETTER Medical system for the average citizen and LOWER drug costs than America…. Incidentally, virtually the same SOCIALIZED Medical System can be found in every country in the Civilized World….
IF; “rBST” is still being used by farmers, so cows could produce up to 25% more milk, and
if; genetic altered corn, soy beans and other “GMO’s” are killing people, and if; rBST and
the weed killer “Round-Up” got a “pass” from the FDA (Fed/food/drug/adm.) because an
officer from Monsanto Company worked for the FDA; WHY isn’t the whole NATION upset,
raising h—, and the s… hitting the proverbial fan?
Have recently been in Missouri, Texas, Michigan (live in Ohio) and “its” being discussed that Mrs Clinton (Hillary) gave a speech praising the reduction of regulations
(Monsanto) & other companies have to endure. What’s the scoop?
every where. Also that Mrs Clinton (Hillary) gave a speech in California supporting the
“reduction” of regulations that businesses
If the citizen has to pay back his health care costs then he will shop for price. If the citizen has guaranteed payment for service then the hospitals will not have to do the cost spreading that you were talking about and they will not be reticent to offer treatment. I want citizens to have all three payment choices open to them: save, buy insurance, or borrow. To do this I envision the creation of a fund or a bank that will lend upon demand, emergency money, instantly, to be repaid on a ten year amortization. I envision this fund being created by depositing $5000 for each citizen born. This would then grow at 7.2% rate so it doubles every decade. The growth would be paid out of tax funds. I expect that the fund would stabilize and like a bank would only need 1/10 of the deposit on hand, and it would become cheaper as unused funds are recycled. There are 100 million children under twenty years old, times 15,000 dollars each, time 1/10= 150 Billion dollars to set it up. And it would cost about $20 Billion/yr to run. That is small compared to the 15 trillion dollar US Economy. RWM
Mike could you tell us about the $231 trillion in derivatives the US banks are trading and also the $191 trillion traded on interest rates not going up, What happrns if for some reason the fed raised the interest rates. I see that ECB is QE so does that mean that the european central banks are trading trillions on derivatives also?
Mike, I think the event on this site last night would be one you ignore at your own peril. We talk about the ECB, oil, interest rates, etc you get 15 or twenty comments. Big
Deal! The Obamacare forum drew hundreds of passionate and erudite responses. This is
THE hot button issue of our generation. There are 75 million boomers futures dramatically impacted by this legislation, and we all are fully aware of it. Reader Howard hit the nail on the head by pointing out that what’s wrong with it is that it is pure politics, pitting groups against each other. Anything our current government does is going to be pure politics and therefore doomed. The solution must be apolitical. Whatever your political stripe you want good healthcare and you want it for everybody. Martin Weiss is a very respected man and its great he wants to make us all millionaires but what if he directed his efforts to seeing we all got good healthcare ? You too for that matter. What a public service you would perform and what a massive loyal following you would have in no time. Financial advisers are a dime a dozen, unselfish citizens that perform a vital ,public service are quite another. Last night was an opportunity presenting itself, don’t let it pass. Jim
Weiss is a good guy.
But he sells paper written by Guys who do not trade.
Really, a Guru makes lots of money.
Playing an Apostle does not.
If everything in this life is just about money then you are absolutely correct. Forgive my naïveté. Jim
the power of one thought; Let’s open walk in clinics in every city in U.S. in all of the vacant space in retail locations. This will be tax neutral approach as the property owners will receive tax credits for the use, dollar for dollar. Utilily companies will be compensated in like manner for all usage. Pharmacy companies will stock clinics will same arrangement, dollar for dollar tax credits. We will hire older doctors to staff these clinics along with P.A.s. the work will be done by hiring new doctors right out of medical school at $35,000 a year for 4 years. In return we will pay off their college debt.. after they are free to go into private practice as we need them to be the next generation of innovative doctors in the private sector. Also we will institute a program to pay for 10,000 new doctors a year to go thru medical school, if these should fail, drop out, etc. they will be require to repay their debt on a low cost basis. The real beauty of this is that most fraud in the broken system we now have occurs at the primary care level. This offers basic medical access to the estimated 40,000,000 uninsured in our country as a first line of totally accessible primary medical attention. If they need more serious medical care, then they are referred to a hospital where medicare or medicaid can kick in. No one utilizing this free access is allowed to sue anyone. The cost saving alone by bypassing the primary care fraud level will more than pay for educating the new crop of doctors; the new jobs required to gear up the production of the medical supplies will be enormous. Health insurance works for those who have it at their jobs or can afford it, but this will help keep at large part of our population healthier and will provide hope for students who would make great doctors but cannot afford medical school..obviously this doesn’t keep parents who can afford to send their kids to become doctors, from sending them to schools that they can afford. The long range effect is that we will produce 100,000 doctors in 10 years and imagine what that will help to accomplish in reducing the ever spiraling cost of health care. This is neither Democratic or Republican or any other party, but rather a potential solution for all Americans first and foremost. It offer hope to thousands of students who would otherwise be locked out of a medical career, it save millions, if not billions in fraud costs, and anyone who needs immediate medical attention can now be seen regardless of economic status… a hope, a path, and possible solution.
What a great start sir! Innovative thinking like this can fix our mess. Thanks for your thoughts. Jim
You can see your idea in practice in most any country in the Civilized World, except the United States….. One of the most successful Labor Unions in the world is the AMA…. If Ike had had his way back in the 50’s, America would have joined the rest of the Civilized World then….. Instead we got a lot of Millionaire doctors, Expensive Drugs, and 2nd rate Medical Care.
The obamacare program should have concentrated on controlling the amount charged for any medical treatment, medications n other medical services provided by medical providers. Instead of subsidizing the current amounts charged by Drs., hospitals, n Pharmacies. This program did not address the enormous amounts billed by all service providers. This would minimize any subsidies made.
Wouldn’t ti be wonderful if all of our elected officials really wanted all of us to have reasonable health care? A single payer system would cover everyone. Maybe the insurance companies would have to settle for supplying the public with other types of insurance. Oops! I forgot. If you really need insurance, the companies aren’t really interested in you.