Week of Mar 10 2017 Weekly Recap & The Week Ahead
“Only when the tide goes out do you discover who’s been swimming naked” – Warren Buffett
1. Trump Endorses GOP Healthcare Plan to Replace Obamacare — President Trump is “proud to endorse” a plan to replace Obamacare backed by Republican leaders in Congress, and called for its quick passage even as opposition to the American Health Care Act hardened among conservatives. Alongside the end of health insurance mandates, the proposal would create a new tax credit tied to a person’s age and income for those who cannot get insurance through their employer, and would restructure the country’s Medicaid program. Trump also tweeted plans to lower drug prices. “I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!”.
2. Soda Industry Prepares for Tax Hit — Philadelphia’s new soda tax has high stakes for the beverage industry, with PepsiCo (NYSE:PEP) recording a 40% drop in sales and Coca-Cola (NYSE:KO) seeing volumes slump 30%-50%. A much bigger market, Chicago’s Cook County, has passed a similar tax that goes into effect July. Boulder, San Francisco and others also voted on related measures, while Santa Fe has a hearing on the issue this week.
3. Oil Drops Below $50 for First Time Since December on Supply Glut — Oil dropped below $50 in New York for the first time since December as concerns that OPEC’s output cuts are failing to restrain record U.S. stockpiles triggered the biggest slump in more than a year. Oil had fluctuated above $50 a barrel since the Organization of Petroleum Exporting Countries and other nations started trimming supply for six months starting Jan. 1 to reduce a global glut. The market swoon stoked the second-highest WTI options trading volume ever and sent volatility surging.
4. President Trump Pushes for $1 Trillion Infrastructure spending — President Trump is pushing his White House team to craft a $1T infrastructure spending plan that would pressure states to streamline local permitting, WSJ reported. He suggested a 90-day deadline to start projects and said they would be financed through public and private capital.
5. Bullish Sentiment Figures At Dangerous Levels — chart below show the S&P500 weekly index Investor’s Sentiment spikes above “Dangerous Level”. In the three times the reading has been that high since 2011 it has led to declines of 7% (2/11), 8% (5/13), and 3% (11/13). Also of note is that late last week the number of stocks making new 52-week highs on the NYSE collapsed by some 80%.
Aso shows the Composite Index from 1929 to present.
The week ahead — Economic data from Econoday.com:
