“If you have an approach that makes money, then money management can make the difference between success and failure… … I try to be conservative in my risk management. I want to make sure I’ll be around to play tomorrow. Risk control is essential.” – Monroe Trout

1. Trump Set to Unveil Drug Price Policy — President Trump’s plan will reportedly require Medicare Part D plans to share a portion of discounts they receive from drug manufacturers with patients, as well as including ways to allow the government to better negotiate. Secretary of Health and Human Services (HHS) Alex Azar stated “We’ll be building on the proposals in the president’s budget, but he wants to go further,” Also, the White House said the HHS will take steps to end the gaming of regulatory and patent processes by drugmakers to unfairly protect monopolies, advance biosimilars and generics, consider whether to include prices in drugmaker ads, and accelerate the approval process for over-the-counter drugs.
2. U.S. Imposes More Sanctions on Venezuela — the U.S. has announced new sanctions on three Venezuelans and 20 companies with ties to President Maduro, whom it blames for a deep recession and hyperinflation that have caused food shortages across Venezuela. Vice President Mike Pence also called for more nations to increase pressure and urged Caracas to suspend a May 20 election he denounced as a “sham.”
3. California Approves Plan to Require Rooftop Solar Power for New Homes — California has become the first U.S. state to require solar panels on nearly all new homes built after Jan. 1, 2020, as part of new energy efficiency standards adopted by the California Energy Commission. While the move is a boost for the solar industry, critics say it will add $8K-$12K to the cost of buying a house in the state. Solar already provides 16% of California’s electricity.
4. President Trump Abandoned a Nuclear Deal with Iran — President Trump abandoned a nuclear deal with Iran and announced the “highest level” of sanctions against the OPEC member. Financial or business activities outlawed by August 6 include exports of airplanes and parts, dollar transactions, trade in gold and other metals, sovereign debt and the auto industry. By November 4, sanctions will ban oil purchases and transactions with the central bank. Furthermore, the U.S. Treasury has imposed penalties on nine Iranian companies and individuals for allegedly operating a currency exchange network that – with the help of Iran’s central bank – transferred millions of dollars to the Iranian Revolutionary Guard’s elite Quds Force.
5. Cumulative Advance/Decline Line Made New All-Time High — the Advance/Decline Line has made a new all-time high with positive expansion in breath. Stocks recording new highs are also suggestive of higher prices even though the stock market is overbought on a near-term basis.

The week ahead — Economic data from Econoday.com: