News and Analytical survey

US Stock Market: Trump delivers new healthcare law

The new law provides tax breaks for Americans to purchase health insurance policies. In addition, the law is to significantly change the free medical care program and allow the states not to grant the right to this program to unemployed. This law is essential for America as a whole, but for investors it is even more important. More precisely, not even law itself, but the process of its adoption. Based on the results of voting on this law in Congress, traders will judge the possible prospects for other initiatives of new U.S. President and assess the likelihood of their implementation. Donald Trump insists on reducing the time for the approval of the bill and its adoption by the House of Representatives on March 24.

The President’s activity is liked by investors - despite the uncertainty with the healthcare bill markets are growing. In general, it is necessary to note very short terms of trying to pass the new law (AHCA (American health care act)) in comparison with Obamacare, which was discussed by several months.

Investors remain optimistic, the markets near their absolute highs. Investors are ready to take risks, this can be seen not only by the low levels of the CBOE Volatility Index, but also by the demand for risky assets: MuleSoft’s shares have been successfully listed, stocks of companies which recently went public - Snap Inc., ZTO Express, Trivago – are also quite popular among investors. At the same time, there are a lot of people wishing to hedge their portfolios - gold, long-term U.S. bonds and utilities are all rising. This might be reasonable, however, during this year I believe that the broad market will outperform hedging assets.

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