Street Hoping Healthcare Bill Passes

Investor’s first read – Daily edge before the open
DJIA: 21,397
S&P 500:2,434
Nasdaq  Comp.:6,236
Russell 2000: 1,404
Friday, June 23, 2017    9:03 a.m.
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         The Senate’s bill to repeal and replace ACA was released yesterday, though there will be little time for Democrats and Republicans to debate its clauses. It could go to a vote next week.

         Why the rush ?
         Failure to pass a healthcare bill has been a
stumbling block to pursuing  the GOP agenda of tax cuts, deregulation and a big spend on infrastructure and/or the military.
         If passed, Congress may then proceed to push for tax reform legislation.
         This is where this issue affects the stock market.  The surge in stock prices since Trump won the election in November is based solely on the expectation of a corporate windfall – tax cuts, deregulation, a big spend on the infrastructure and/or the military. The healthcare issue must be resolved before the Republicans can effectively move on to the rest of their agenda. A delay in spoon feeding the Street its promised goodies, could adversely impact the stock market.
         Passage is not certain.  Four senators (Ted Cruz, Rand Paul, Mike Lee, and Ron Johnson) don’t think it is conservative enough. Others may not like the Congressional Budget Office (CBO) scoring next week, others worry about the reaction from its voters, people on ACA, Medicaid, or  loved ones relying on it. No Democrats will vote for it.
        It is flawed, unfair and based on questionable assumptions. 
        Worse yet, it IS POLITICAL, a rejection solely  the result of a Democrat’s attempt to provide a wide reaching solution for  a common need – affordable healthcare. Everything grinds to a halt when a person can’t walk, lift a fork, breathe, void, or function normally without pain. Republicans were against Medicare and Social Security when introduced. Given a chance, they will gut these, as well.
         Look, 70 percent of our economy is consumer spending. A healthier populace goes a long way to ensuring a healthier economy, because it is not just those in need who detract from the economy, it is those who depend on them, and those who have to support them if healthcare is not affordable.
         Recipients of Medicaid are not deadbeats, studies show some 57% work full or part time jobs, 17% too ill to work, 16% in school, and 10% out of the workforce (retired).
TODAY
     Look for the stock market to meander.  There will be buyers betting on passage of the bill, and other investors selling, fearful of  a failure to pass.
     Odds slightly favor passage, since the Senate left wiggle room for fine-tuning the bill to bring in enough votes for passage.
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        Nasdaq’s high fliers, Facebook (FB), Amazon (AMZN), Apple (AAPL), Microsoft (MFST), Alphabet (GOOG) got slammed two Fridays ago, as hot money suddenly decided to lock in profits. This could signal the beginning of a correction (5% – 8%), except the same thing happened in May.  All five marked time yesterday. There is nothing wrong with a one-day stall, unless it signals buying interest has dried up.   

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SUPPORT “today”:DJIA:21,343;S&P 500:2,429; Nasdaq Comp.:6,211
RESISTANCE “today” DJIA:21,437;S&P 500:2,439;Nasdaq Comp.:6,246

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CORPORATE EARNINGS
(updated June 17, 2017)
Factset
      Q1 earnings are projected to increase 14.0%.      Q2 growth  is projected at +6.5 %, Q3 at +7.5%, and Q4 at +12.4%. For 2017 as a whole growth is projected at a plus 9.9%.  Currently, the P/E on forward  earnings is 17.7 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently.
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 6/13/17)
      On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
      As of  June 15, 2017,  a reasonable risk is 21,951 a more extreme risk is 20,703.Near-term upside potential is 21,418.
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POLITICAL/STOCK MARKET
NOTE: I have retained a lot of the copy here for new readers, but also because it is relevant, since assumptions and information are confirmed by unfolding news.
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TRIVIA: Donald Trump’s net worth is estimated at $2.9 billion. Vladimir Putin’s net worth is estimated at north of $40 billion, most of it in oil investments.
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Trump continues to call the Russia hacking a hoax, blaming the Democrats for not intervening before the election. Typically liberal in the Marquess of Queensberry sense, Obama did not want to delegitimize the election process by blaming the Russians in the event Trump won.  Well Trump won ! Next time, don’t turn the other cheek – hellooooo  !
      Damn it – gloves off time.      Trump’s inability to accept hacking is he can’t accept the  fact he didn’t deserve to win the popular vote or the electoral college vote either. His presidency is a mistake, and we are already paying for that mistake.
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 Russian hackers targeted at least 21 US state election-related systems last year and planted online propaganda in an effort to discredit Democratic candidate, Hillary Clinton.
      Reportedly, there is no evidence of any votes being manipulated.  I don’t believe that, Senator Angus King (I-Maine) has doubts, as well.
      NPR Politics reports Alex Halderman, a computer scientist form the University of Michigan, told the Senate Intelligence Committee Wednesday that our computerized election infrastructure is vulnerable to sabotage  and cyber attacks that could change votes.
       
Official sources would never admit machines can be hacked to flip enough votes from one candidate to another, the best was to rig an election, since one flipped vote has the impact of two votes.
       The election is what it is. If it was rigged in favor of Trump, there is nothing that can be done except prevent a repeat performance.
        Where this gets ugly, or downright dangerous to our constitutional representative republic is, Donald Trump, a narcissist in every sense of the word, is president.
         His dominate MO is divisiveness. He loves to pit one person against another. You are witnessing the dismantling of so many things we have held dear, and so many people gave their life to defend.
         His election was a big mistake, and when you make a big mistake, you will pay a big price.
          Everything this Congress will do will divide the country further – American against American, unless voters show up in November 2018 to stop the carnage.

        According to  a 50-metric survey conducted by U.S.-based, nonprofit “Social Progress Imperative,” the United States leads the  world in access to higher education but lags 17 other countries in health, environmental protection, anti-discrimination.
         What in the Hell are people thinking ?  Feeling ?
ROSENSTEIN OUT ?      Who Takes Over ?
     Expect Rod Rosenstein, Deputy Attorney General – DOJ will  likely be fired or have to recuse himself possibly as soon as this week, odds favor the latter. The real target here would be special counsel, Robert Mueller, who would be fired as a desperation stalling tactic by President Trump ‘if’” Trump can find an attorney general who would fire Mueller.  Trump cannot fire Mueller directly.
      Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.

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 IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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      Yielding to intense pressure from Democrats, some Republicans and the press, Senate Majority Leader, Mitch McConnell (R:KY) introduced a draft of the Senate’s healthcare bill which will move to the floor next week (week of 26th) after getting a cost estimate from the Congressional Budget Office (CBO).
      Some modifications will be made to appease fence-sitters. It is imperative for the Republicans to get this bill approved so they can move on to tax reform. That explains the secrecy, the refusal to follow standard procedure.
       While passage would please a dwindling “base,” the bill stands to be unpopular with a high percentage of Americans, some who will get skewered by it, others who will have friends and loved ones hurt, and others who simply have a conscience.
     

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BREAKING NEWS: TRUMP – OBSTRUCTION OF JUSTICE
       Special counsel, Robert S. Mueller III, has entered into a criminal investigation of President Trump for obstruction of Justice
with Director of National Intelligence, Daniel Coats, NSA head, Mike Rodgers, and his recently departed deputy, Richard Ledgett agreeing to be interviewed last week.
      Reportedly, In March, Trump asked Coats to intervene with FBI director James Comey to curtail its  Russia probe of  former national security adviser Michael Flynn.
       Shortly after, Trump  contacted Coats and Rogers separately, asking them to issue public statements denying collusion between Trump’s campaign and the Russian government. Neither would comply.
       I think collusion regarding influencing the election is only part of something much bigger, like major league money transfers for options on oil investments, real estate holdings, and land deals. That’s why it is taking so much time.
       The investigation is now examining Jared Kushner’s international financial dealings.
      Vice President Pence has retained legal counsel.  Why not ?  He was there in the catbird’s seat during the campaign and afterwards.
      There are so many people who know so much, and they are going to be watching out for number ONE, and that is not Donald Trump.
      HOWEVER, Trump will stop at nothing to preserve his self image – Expect firings, scapegoating,  delaying tactics, and  unscrupulous lawyering.
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“Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald and Eric Trump – Wilbur Ross – Jill Stein – Michael Cohen – Ezra Cohen Watnick – Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Russia’s Felix Sater – Sergey Gorkov –  Sergey Kislak, ambassador to the U.S..all connect directly or indirectly to the Trump/Russia investigation and have a connection to Brexit, as well. According to the “Observer, Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.
      Additionally,  Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz has represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin. 
       WHY SO MANY RUSSIANS ? WHY ALL THESE RUSSIAN CONNECTIONS ?  THIS IS GETTING BIGGER – IMHO THIS WILL BE THE BIGGEST SCANDAL “EVER” AND MAY TAKE YEARS TO FULLY UNWIND.
          Was there a GLOBAL POWER PLAY here ?  Britain, United States, France, Netherlands, Sweden, Italy ?   Who was the puppeteer who were the puppets ?
        The new kid on the FBI “person of interest” block in its US counter-intelligence investigation is Nigel Farage, a Brit, former UK Independence Party (UKIP)  leader and tactician for Brexit. He may be positioned to have a lot of pertinent information about 2016 election tampering. Reportedly, he has had direct or indirect contact with all of the above.  …………………………………………………………………………………..
  President Trump’s budget is obviously DOA, with lots of blowback by Republicans looking to their prospects of re-election in 2018. The budget is a disgrace to who we are as Americans, as it skewers a portion of our society with little ability to defend itself, much less survive.     
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PREUTERS WORLD NEWS APRIL 19, 4:20 PM
“A Russian government think tank controlled by Vladimir Putin developed a plan to swing the 2016 U.S. presidential election to Donald Trump and undermine voters’ faith in the American electoral system, three current and four former U.S. officials told Reuters.
      Russian documents appear to confirm what U.S. intelligence agencies have believed  all along that Russia influenced the outcome of our presidential election. 
      It recommended that a, “propaganda campaign on social media and Russian backed global news outlets to encourage U.S. voters to elect a president who would take a softer line toward Russia than the administration of then-President Barach Obama.
     Additionally, a second institute document recommended Russia end its pro-Trump propaganda and intensify messaging about voter fraud to undermine the U.S. electoral system’s legitimacy and damage Clinton’s reputation.
      So far, investigations by U.S. institutions and Congress have not concluded collusion between Trump’s team and Russian operatives occurred.

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TRUMP TO PUT US  ON  A WAR FOOTING !
      
Expect the Trump administration to put the United States on a war footing within one year, probably regarding North Korea.  For one, it would justify its big military spend. For another, it would facilitate a mid-term election victory, since voters are reluctant to change  Congress significantly when the nation is gearing up for war.. It worked for George Bush in 2003.  Finally, it would deflect attention away from the Trump/Russia issue, that could sink the administration.
ALL OF THE ABOVE HAS THE POTENTIAL TO ADVERSELY IMPACT THE STOCK MARKET  AND   MERITS CONSIDERATION.
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Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

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