For once, there really wasn’t that much news out of Europe.
And there really wasn’t even that much corporate or econ in the news.
In fact, the biggest story came out of the Supreme Court and the decision to consider the individual mandate portion of Obamacare.
Mike O’Rourke of BTIG talks about the real story of the day, and its potential impact on markets.
But perhaps the biggest news of the day was made when it was announced (not unexpectedly) that the Supreme Court will hear the arguments against the Affordable Care Act (ACA). The case is expected to be heard in the spring with a decision shortly thereafter which would surely and obviously influence the 2012 election. While the announcement was not unexpected, it seems likely that the debate surrounding the law’s constitutionality will weigh on the sector, not unlike performance surrounding the original debate. As health care is one of the year’s top performing sectors, the next few months may see less appreciation.
As for the potential outcome, we will leave that to others more versed in the specifics than we are however it seems thoroughly unlikely that the entire law will be deemed unconstitutional. Much of the focus will be on the individual mandate; the part of the law that requires everybody to buy health care by 2014 or else pay a fine of up to $2085. This is not unimportant for hospitals and managed care as they are likely to still see the benefits of the ACA in the form of new patients with subsized care. But for the health care sector as a whole, a shift into neutral seems like the most obvious outcome.
Worth noting that several of the healthcare companies — after being up early in the day — finished with losses more severe than the market.
Obviously this market likes the individual mandate.