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We'll Tell You When It's Time to Tap Tesla

A week ago today, in a strategy story aimed at helping you survive and thrive in today’s whipsaw markets, Chief Investment Strategist Keith Fitz-Gerald told us to put Tesla Motors Inc. (Nasdaq: TSLA) on our “watch lists” for a likely future purchase.

“BP, Tesla is a definite ‘shopping list’ stock,” Keith told me back then. “We’ve been nibbling at it here, and have played it successfully several times. But it’s not yet at the point where I’m ready to jump all the way in. I think my rationale behind Tesla remains upbeat. I mean, you’ve got a real winning combination here – a disruptive sales model, a CEO who’s the most innovative guy on the planet, all the capital in the world that can be brought to bear. I don’t give a rat’s [tail] that New Jersey won’t let the company sell its cars there. There are much bigger opportunities. Wait ’til you see what the company does with China.”

  • Obamacare

  • Earnings Season Begins in the Stock Market Today Friday's negative jobs report is hanging over the stock market today as the markets opened lower Monday morning. Investors will look to corporate earnings of major companies this week as the second-quarter earnings season unofficially begins.

    Even though some major companies such as Research in Motion Ltd. (Nasdaq: RIMM) and Nike Inc. (NYSE: NKE) have recently announced earnings, Alcoa (NYSE: AA) unofficially kicks off the market's second-quarter earnings.

    Investors hope that earnings do not follow the disappointing trend set by RIMM and NKE, but many other companies have already issued lower guidance for the upcoming quarter. This does not bode well for the economy which is trying to shrug off manufacturing, jobs and consumer confidence reports that all point towards "Recession 2013."

    Many analysts expect earnings to be weak across the board. Corporate profits are starting to feel the sting of economic concerns overseas and at home.

    Later this week JPMorgan Chase (NYSE: JPM) and Well Fargo (NYSE: WFC) report their earnings as well as Google (Nasdaq: GOOG).

    Troubles in Spain continue to impact the confidence of investors as the yield on the Spanish 10-year bond crossed the 7% mark again.

    Along with Alcoa here are some other companies in the news today.

    To continue reading, please click here... Read More...
  • Don't Expect the Obamacare Ruling to Calm the Markets Even before the Supreme Court decision on Obamacare was handed down yesterday the markets were selling off hard.

    They were tanking on news that the latest European summit was unlikely to be a game-changer, that U.S. gross domestic product was a paltry 1.9% in the first quarter, and a New York Times story that JPMorgan Chase's derivatives loss could top $9 billion.

    Then came the long-awaited decision from the country's highest court on the divisive healthcare law, the Patient Protection and Affordable Care Act, which unhinged markets further.

    The Court's historic decision shook the markets for several reasons.

    But the single overriding effect of the mixed-bag decision will be its impact on markets going forward.

    That's because the divided decision further fuels partisan politics going into the November elections and sets the stage for an all-or-nothing battle between Republicans and Democrats.

    The chances of there being any compromise anywhere on any divisive issues before the elections is now mathematically zero, where before it was somewhere between slim and none.

    The Bigger Issues Behind the Obamacare Ruling

    What the markets now face aren't just healthcare, tax and spending issues.

    As a result of the Court's stunning decision, we face something much bigger -- Constitutional issues of the highest and deepest order.

    The High Court, with Chief Justice John Roberts unexpectedly siding with the Court's four liberal justices, rendered a 5-4 victory for President Barack Obama's prized legislation.

    The ruling upholds the "individual mandate" that requires citizens to either pay for "minimum essential" health insurance or pay a "penalty" through the IRS as a "tax" towards offsetting the shared costs of national healthcare.

    But the Court also struck down the Act's provision allowing the Federal Government to effectively "hold a gun to the head" of states if they failed to increase Medicaid benefits, largely expanded under the new law.

    In its original form, states could lose all Federal funding of Medicaid for non-compliance with Federal demands.

    By its decision the Court effectively admitted that the Commerce Clause argument underpinning the individual mandate's Constitutionality was null and void.

    But while they said that the individual mandate that "forced" citizens to buy health insurance wasn't intended as a "command" that fell under the Commerce Clause, they incongruously flipped the argument on its head and agreed (by a one-vote majority) that the mandate was legal under Congress' authority to "tax" citizens for the benefit of the nation.

    To continue reading, please click here... Read More...
  • Stock Market Today: Obamacare Upheld Volatility in the stock market today is high due to several factors both domestically and abroad.

    The Obamacare ruling is the main driver causing uncertainty in the market, followed by the start of the European Union summit today in Brussels.

    The Obamacare ruling had been anticipated with such fervor that reporters camped in front of the Supreme Court for days before the decision.

    They finally got one - and it may come as a surprise to many.

    The controversial mandate that requires everyone to purchase healthcare by 2014 or pay a small fine was upheld. The vote came in at 5-4 with Justices Scalia, Kennedy, Thomas and Alito dissenting.

    Chief Justice Roberts said that the mandate is not a valid exercise of Congress's power under the Commerce Clause, but it will survive as a tax.

    Republicans had been almost certain that the mandate would be stuck down and President Obama can now breathe a small sigh of relief that his healthcare overhaul has been upheld.

    Back to the EU summit, which has been awaited with such pessimism that the yield on Spanish 10-year bonds has risen above 7% again and the euro slipped to a three-week low of $1.24 versus the dollar.

    There is an unusual and detrimental air of division and discord among the European leaders heading into the summit. The continent needs to work towards more integration rather than fragmentation if they are to lay down a framework for better fiscal, financial and political union.

    U.S. unemployment claims fell slightly from the 392,000 initial claims reported last week to a still alarmingly high number of 386,000 for the week ended June 23. The final estimate for the first quarter's gross domestic product (GDP) came in at the expected 1.9%, but that estimate had already been lowered last week by the U.S. Federal Reserve.

    Looking beyond these reports, here are some stocks in the headlines today.

    To continue reading, please click here... Read More...
  • How to Trade the Obamacare Ruling During a visit today (Wednesday) to Fox Business' "Varney & Co." program, Money Morning's Keith Fitz-Gerald tackled the issues surrounding the Obamacare ruling and how investors can trade the news.

    Since the U.S. Supreme Court is scheduled to announce its Obamacare ruling tomorrow, we wanted to share with you this Q&A session with Keith on what you need to know about the decision.

    Keith also shared what he thinks of Facebook stock as the market is flooded with analyst opinions from the underwriting firms.

    You can see all of Keith's analysis in the video below.

    Q, from "Varney & Co." host Stuart Varney: The Obamacare ruling is imminent. Will insurance companies tank if it's repealed, and how would you trade that?

    A, Keith Fitz-Gerald: I can see this going two ways...

    1)If it's upheld, insurance companies will make bank, but businesses offering services to small and mid-cap companies that are likely to be hamstrung are going to do better. That includes Paychex Inc. (Nasdaq: PAYX) or Express Scripts (Nasdaq: ESRX), for instance. Both will help small companies spend their healthcare dollars more efficiently.

    2)If struck down, big insurance companies will have to retool and restructure as they are the ones that hold the biggest stake in this debate. It's a little late to make that bet today, but when the ruling is announced we'll have some clarity and can make a decision then.

    To continue reading, please click here... Read More...
  • Healthcare Stocks: What Happens if Obamacare is Overturned With the Supreme Court ruling on President Barack Obama's healthcare reform law just three weeks away, investors in healthcare stocks need to be prepared.

    While some are confident the Supreme Court will rule in favor of the Patient Protection and Affordable Care Act, a rejection of the law -- or at least of the mandate requiring everyone to buy insurance -- may be more likely.

    If so, Obamacare could be toast.

    Based on tough questioning from moderate Justice Anthony Kennedy in Supreme Court hearings in March, the odds of that happening are rising. In close cases, Kennedy is often the swing vote.

    At InTrade - where people can bet on the outcome of real world events -the probability of Obamacare being overturned has risen to about 70%.

    So what would happen to healthcare stocks if Obamacare was overturned?

    Surprisingly, it is less than you'd think.

    In fact, most healthcare stocks will benefit simply by having a definitive answer on the fate of the law. A decision would lift the uncertainty hanging over the sector since Obamacare passed in 2009.

    "Coming off the market lows of 2009, you saw multiple expansion in virtually every sector of the S&P 500, but very little in health care," Eddie Yoon, Fidelity Investment's top health-care analyst, told Barron's.

    Still, some healthcare stocks would gain more than others if Obamacare gets torpedoed. And a few could get a little dinged.

    To continue reading, please click here... Read More...
  • With or Without "Obamacare" These Healthcare Stocks Are Headed Higher The fat lady hasn't sung yet...but she is warming up.

    Three days of arguments before the Supreme Court have made it abundantly clear - "Obamacare" is in danger of being gutted or completely wiped off the books.

    Only one thing's for sure. Investors will want to keep buying healthcare stocks -especially as 10,000 baby boomers a day turn 65 years old for the next 20 years.

    But there's one segment of the healthcare sector that will be sitting in the driver's seat when it comes to delivering healthy profits and investment returns - no matter how the court rules.

    Here's what you need to know...

    To continue reading, please click here... Read More...
  • Obamacare in the Balance: Key Takeaways from the Affordable Health Care Act Hearings
    Three fast-paced days was all it took for nine justices to grill advocates arguing for and against the Affordable Care Act - better known as Obamacare.

    A decision is expected in late June, just months before 2012 presidential elections.

    Although it is notoriously difficult to predict U.S. Supreme Court decisions purely based on their questioning, here are my takeaways from these momentous three days.

    To continue reading, please click here... Read More...
  • From Obamacare to Taxes: 5 Hot Topics Politicians Love to Lie About Political lies are as old as the Republic, but that doesn't make the practice any less of an insult to the American people.

    Whether they are about Obamacare or taxes, political lies are a special kind of deception.

    Rarely are they blatantly false. Political lies rely on misrepresentation of facts and convenient omissions that make their target look better - or worse - than it really is.

    So convincing are today's politicians and their minions it's not even clear they always realize when they're bending facts past the breaking point.

    "The problem is we never know whether they believe what they're saying or not," Brendan Nyhan, a Dartmouth political scientist and author ofAll the President's Spin, told USA Today.

    At least three fact-checking organizations - the Annenberg Public Policy Center's FactCheck.org, the Washington Post's Fact Checker column and the Tampa Bay Times' PolitiFact - do their best to point out the almost daily deceptions.

    But politicians know that few citizens ever visit such Websites. And that's what politicians and their surrogates are counting on.

    "I don't think [the fact checkers] make a whit's worth of difference," Rick Tyler, a senior adviser to Winning Our Future, a super PAC that supports Newt Gingrich, told USA Today. "Millions more people will see [our] ad than will ever see the political fact check."

    That doesn't deter the fact checkers, however. The constant stream of political lies has been keeping them very busy lately.

    Here are five issues that have been particularly prone to political lies over the past several months. You'll probably hear variations of these all the way through the 2012 election.

    To continue reading, please click here... Read More...
  • Congressional Spat Over Doctor's Medicare Pay Threatens Obama's Healthcare Reform Effort A Congressional stalemate over how to stave off a hefty pay cut to doctors treating Medicare patients threatens to undermine President Barack Obama's healthcare reform effort - even as the administration mails out a glossy brochure to reassure seniors the healthcare program is on solid ground.

    For the third time this year, Democrats and Republicans are squabbling over a provision to approve billions of dollars in new spending to avoid a scheduled 21.3% cut in reimbursements to doctors who treat Medicare patients.

    If GOP senators don't allow the stalled proposal to pass, some doctors will stop treating Medicare recipients, Obama said... Read More...
  • Question of the Week: Do the Pitfalls Outweigh the Promise For the New Healthcare Reform Program? When U.S. President Barack Obama signed the new healthcare-reform bill into law yesterday (Tuesday), it ended months of political bickering and maneuvering, and began a new chapter in the nation's healthcare saga - one in which the country will feel the effects of this sweeping, costly and controversial policy overhaul.

    The fact is that many Americans will have healthcare for the first time ever. Offsetting that bright spot, however, is the reality that the program could add trillions in debt to the country's already burgeoning national debt, further complicating the matter.

    Going forward, it will now be left to the pundits, analysts and the healthcare industry to decipher what these provisions really mean for the industry, for individuals, for taxpayers - and even for investors.

    But here at Money Morning, we wanted to know what you think about this new law. That's why we made healthcare reform the inaugural topic in our new "Question of the Week" feature.

    Money Morning Question of the Week: U.S. President Barack Obama's controversial healthcare proposal is now law. What do you think? How do you feel? Do you think it's a beneficial or harmful move for you as a consumer, as an investor, and as a taxpayer? What do you think it means for our nation's economy?

    What follows is a sampling of the enthusiastic and passionate responses that we received. Make sure to also check out next week's "Question of the Week," a query that seeks your thoughts on the growing levels of U.S. debt.

    Read More...
  • Healthcare Reform Losers: Companies Providing Retiree Benefits Face Multi-Million Dollar Tax Costs After sending letters of protest to Congress in the months prior to the healthcare law's approval, U.S. companies are now facing multi-million dollar after-tax hits this year due to a tax provision in the new legislation, labeling them healthcare reform losers instead of winners.

    Part of the new healthcare law places a federal income tax on government subsidies given to companies that provide retirees and their spouses with drug benefit plans. The 28% subsidy was created as Medicare Part D, adding a prescription plan for senior citizens to the Medicare Act of 2003. To encourage companies to continue offering retirees a drug plan, the tax-free subsidy reduced companies' costs. Fewer senior citizens then went through Medicare's prescription program - which would have cost taxpayers much more than the subsidy price.

    Caterpillar Inc (NYSE: CAT) and Deere & Company (NSYE: DE) are just two of the businesses that fought the new stipulations. The manufacturers estimate the tax will cost them $100 million and $150 million this year, respectively. Other companies who will pay handsomely include AK Steel Corp. (NYSE: AKS) with $31 million in charges, and Honeywell International Inc. (NYSE: HON) with an estimated fee of $42 million.

    Consulting firm Towers Watson & Co. (NYSE: TW) estimates these taxes could cost companies about $233 per person receiving drug benefits - a hefty price tag when a company gives benefits to 40,000 retirees, like Caterpillar.

    Overall, more than 3,500 companies offer drug benefits to 6.3 million retirees. Although the tax won't be effective until 2011, accounting practices force companies to recognize the fees in the period in which the law is signed. That means the tax could nab $14 billion from corporate profits in a year when companies were hoping to recover from huge losses during the recession.

    Read More...
  • We Want to Hear From You: What Do You Think About the New Healthcare Law? After months of controversy, political bickering and maneuvering, and intense media speculation and scrutiny, this week became a historically significant moment in the annals of U.S. healthcare when U.S. President Barack Obama signed the new healthcare bill into law.

    Thus begins a new chapter in the healthcare saga, when the country will feel the effects of this sweeping, costly and controversial policy overhaul.

    As with any sweeping legislation, the law is facing both fierce support and opposition as the country digests what the provisions mean for individuals, for the healthcare industry, for the government - and for the... Read More...
  • Drug Companies and Hospitals Get a Boost from Healthcare Reform After months of trying to predict how the healthcare reform proposals would affect the respective futures of their industries, drug companies and hospitals are optimistic about the prospective long-term profits the final version of the health care reform bill could bring them.

    President Barack Obama yesterday (Tuesday) signed the $940 billion health care reform bill with support from pharmaceutical companies and the hospital industry. Both will benefit from a sharp increase in the number of insured customers, as the bill expands healthcare to up to 32 million more people.

    While the bill will cost tens of billions of dollars over the next 10 years, the planned reforms create something drug companies and hospitals can't live without: paying consumers.

    Read More...
  • Shaky CBO Deficit Projections Help Healthcare Reform Bill Pass House When the comprehensive healthcare reform bill won approval from the House on Sunday, some of the swing lawmakers were won over by a new Congressional Budget Office (CBO) analysis showing the bill will slash the deficit by over $1.3 trillion over the next 20 years.

    But at a time when the U.S. budget is already saddled with hefty doses of red ink, there's a growing debate about whether the new bill will reduce the deficit or evolve into another entitlement program that will expand the country's debt beyond already record levels.

    Even though the bill - which President Barack Obama has hailed as the "most significant effort to reduce the deficit since the Balanced Budget Act" of the 1990s - will cost the federal government $940 billion over a ten-year period, the CBO said it will increase revenue and cut other costs by an even greater amount.

    Read More...
  • Teva Pharmaceutical Wins Fight in the Generic Drug Market Battle Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA) will buy sought-after German generic producer Ratiopharm for $4.97 billion, continuing a trend of highly competitive merger-and-acquisition (M&A) activity in the pharmaceutical industry.

    Competitors have pursued Ratiopharm for nine months because of its position as the second biggest generic producer in Germany. It was put up for sale in June to help pay off debt amassed by the previous owner's stock market misfortune. Other contenders were rumored to be the Pfizer Inc. (NYSE: Read More...