Healthcare and Medicaid
If we had to summarize in one word what the issue is with healthcare right now it would be Medicaid. The problem lies in how Medicaid is politicized and funded. All eyes will be on the Senate to see what they do with healthcare. The healthcare industry, as well as the markets, will be watching closely. Healthcare stocks are a large category that could be affected, from a political standpoint, once a decision has been made.
The Fed
The Fed is an important topic this week. For those clients who experienced 2008 you will find interest in this topic. Right after 2008, the capitalization of banks had very thin margins which resulted in lessening their lending. The more that banks can lend to consumers and corporations, the better the economy is. Since the regulations are changing in the financial sector we are seeing a lot of interest in this topic.
Energy and Oil Prices
A lot of people are going on vacation this week and might notice at the pump that energy prices are lower. This is great for the consumer, but it is really starting to affect some of the energy companies now. US producers, ideally, need around $50/barrel to thrive. We have been in the $40 to $45 range for a couple of weeks now. We are starting to see the negative effects of the high yield. If you go back to 2014 you’ll see how lower energy prices affected the housing market in areas like Texas and North Dakota. It is really a supply and demand issue. There is a lot of supply that energy producers in the US have brought to the market. It has been a really good boom to the US economy in that they are building housing and pipelines. Technology has played a major role in the energy sector which is pushing greatly down on the price. There are certain energy companies that can produce at $25/barrel which has really broken through in the last year. The thing to look at is, as energy prices come down do energy companies quit investing? Innovation could possibly reach the point of changing dynamics where they can produce it cheaper. This could essentially push prices down while keeping profitability up. That would help both the consumer as well as the energy sector. This might also push out some competition that can’t survive from a global standpoint.
Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here
Bobby Norman, CFP®, AIF®
Senior Vice President
Wealth Consultant
Email Bobby Norman here
Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here
Trey Booth, CFA®, AIF®
Senior Vice President
Wealth Consultant
Email Trey Booth here
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.
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