Market to Shoot Down because of Obamacare?

With all these new taxes (24% dividend/cap gain tax) wont it mean stocks/homes should be worth much less? We’ll see tomorrow if this bill passes. Though the new taxes don’t take effect immediately, their potential impact quickly drew concern and helped send the major averages lower in Friday trading. A 3.8 percent tax highlights the new levies, which target individuals making more than $200,000 a year and families making more than $250,000. The health package also hikes the Medicare payroll tax by 0.9 percentage points to 2.35 percent for the same group. There also is a 40 percent tax on health benefits that would be delayed to 2018 and apply only to premiums exceeding $10,200 a year for individuals and $27,500 for families. CNBC Poll: Tell Us What You Think Do you support President Obama’s plan to overhaul American health care? * 35220 responses Yes 25% No 75% Your response cannot be recorded. For assistance please contact MSNBC technical support. For investment advisors, the impact of the new taxes wasn’t hard to figure out. “For someone who makes $250,001 and you’re retired, it all comes to a $7,250 tax burden that didn’t exist two days ago,” said Jim Meyer, chief investment officer at Tower Bridge Advisors in West Conshohocken, Pa. “It’s several thousand dollars and it’s going to affect consumption.” The fiery battle over the plan—President Obama has been making emotional campaign stops this week in an effort to corral public support—was indicative to some of how much concern there was from investors. “The bickering and the level of rhetoric has reach such inflated levels—it could only get this nasty during a bear market,” said Walter Zimmerman, senior technical analyst at United-ICAP in New York. “We see the level of bickering coming out of Washington as clear indication that this bear market has legs.” As for health care stocks in particular, the market has known for quite a while that some type of reform was brewing and thus had time to bake in changes to stock prices. “If this bill passes there are provisions short-term (for health care stocks) that are not as bad as we thought, but it threatens to be an overhang for the sector,” ING’s Landesman said. “Clearly health care investors are hoping that this doesn’t go through. The sector’s outperformed after a a pretty bad run.” The impact of the health care bill could be felt beyond basic stock investing and into Treasurys. Some market pros were concerned that inflation and budget deficits the plan would generate would hit prices and raise yields on the 10-year note, which is traditionally a reliable gauge of inflation pressures. The 10-year yield actually edged lower in Friday trading, due likely in part to an influx of supply coming with next week’s debt auctions. “There are a lot of unintended consequences we could see developing, assuming it passes and how it goes over in the initial stage,” said Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco. “There’s too much uncertainty over how much exactly is going to transpire out of this. It’s pretty complicated. It’s fairly negative for the economy and could be fairly bearish for Treasurys.” Meyer predicted that municipal bonds would benefit, however, as they are exempted from federal taxes and could be used by investors to reduce taxable income. “You can presume that somebody who potentially is in that area close to $250,000 is going to make darn sure they can get their total income as a single less than $200,000 or as a couple under $250,000,” he said. The general uneasiness about the reforms will have wide-ranging effects, Meyer added. “As we get closer and closer to November the willingness of Congress to do much of anything as it relates to tax legislation is going to get less and less. We’re just going to keep pushing things down the road and creating more complicated problems,” he said. “To me that is a serious concern. I wish I could tell you how much we should be concerned, what the economic impact is going to be, but it’s certainly going to have an impact.”

You were the same person who everyday in January and February 2009 was posting stock market returns since Obama took the presidency. Since March 2009, you haven’t mentioned anything about “Obama’s stock market returns”. I believe Presidents have very little control over stock market returns, but judging from your posts 14 months ago you obviously felt differently. Can’t have it both ways. As for your current thread, I believe some version of “Obamacare” was already priced in the market. Of the list of factors that the market find important, this issue is not on top of the list.

Well this looks like it will go down as one of the worst predictions ever. UNH, WLP down a bit, AET up, CI flat.

Ultrashort Healthcare ETF (RXD) is down -1.96%; so much for shorting healthcare or the market for that matter. I think he should go work for them http://www.ebullio.co.uk/ourteam.html or maybe you could get your own talk show like Kramer has instead of Mad Money call it Crazy Money!

Everyone saw this coming.

@joemontana; I hope you know the US equities are up 0.58% or so.

joemontana Wrote: ------------------------------------------------------- > Everyone saw this coming. Exactly. It’s not news.

I must admit I’m a little surprised to see the market up. I would have thought that there were people thinking that it would be business-as-usual who now have to rearrange their expectations for the new health care expenses, and therefore would sell. It’s not that lots of people didn’t see this passing; it’s that there would be enough people who thought it wouldn’t pass that now have to change their minds and their positioning to have at least a mild effect. On the other hand, maybe this also reduces the level of uncertainty in the market, and the feeling is that large and small businesses can plan better now. Or maybe it’s just noise. This is a complicated enough bill that I think it might take a while to digest the implications.

so the bill doesn’t do anything about those greedy insurance companies???!

Anyone who has been following the healthcare debate knew Democrats were likely to win the vote. Efficient markets = already priced in