Uncertainty Mounts for GOP Healthcare Plan-Fewer Patients Higher Costs?
Worse Day of the Year for the Market
Despite a strong opening this am the market made an abrupt reversal to the downside as investors began to worry about delays in implementation of the Trump agenda especially tax cuts which were promised following healthcare reform. Republicans have warned that there will be no massive tax cuts unless Obamacare has been repealed.The broad sell-off in Nasdaq, healthcare and biotech stocks was triggered by yet another bashing by Trump at a populist rally in Kentucky last night where he promised to tackle high drug prices following approval of the American Healthcare Act. Trump said, “medicine prices will be coming down way down”. Although this is not news it has the same damaging effect reminding biotech investors of the possibility of competitive bidding for prescription drug prices that are part of Medicare Part D.
The market had one of its worst days of the year as many investors became concerned about the Trump political agenda starting with concerns about the healthcare bill. But the market is up over 10% since the election not just because of an improving economy but high expectations for tax reform in Washington. So given the political risk and big moves since November profit taking would be expected. Analysts and pundits have warned for months about the strength of the 2017 rally without so much as a 1% move on daily basis.
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