"The ongoing deterioration in earnings is something worth watching closely. The recent improvement in the economic reports is likely more ephemeral due to a very sluggish start of the year that has led to a "restocking" cycle. The sustainability of that uptick in the economic data is crucially important if the economy is indeed turning a corner toward stronger economic growth. However, with the Affordable Care Act about to levy higher taxes on individuals, it is likely that a continuation of a "struggle" through economy is the most likely outcome. This puts overly optimistic earnings estimates in jeopardy of being lowered further in the coming months ahead as stock buybacks slow and corporate cost cutting becomes less effective."
Read more about this in the link below ...
http://www.zerohedge.com/news/2014-06-03/truth-behind-q1-earnings-numbers
Comments
The taxes/taxation issues were widely discussed and most published before this act was passed.
http://obamacarefacts.com/obamacare-taxes.php
And IRS site.....
http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-Home
"Four years after enactment of what is widely viewed as President Barack Obama’s key legislative achievement, however, it’s unclear whether the health care law is still on track to reduce the deficit or whether it may actually end up adding to the federal debt. In fact, the answer to that question has become something of a mystery....
In its latest report on the law, the Congressional Budget Office said it is no longer possible to assess the overall fiscal impact of the law. That conclusion came as a surprise to some fiscal experts in Washington and is drawing concern. And without a clear picture of the law’s overall financing, it could make it politically easier to continue delaying pieces of it, including revenue raisers, because any resulting cost increases might be hidden."
Fiscal Diagnosis Only Gets Tougher for Health Care Law
By Paul M. Krawzak
June 4, 2014, 12:01 p.m.
http://www.rollcall.com/news/-233551-1.html?pg=1&dczone=policy
lol.
I'm not going to make any political statements. I have a few thoughts:
1. I wouldn't be jumping into (unless you have a long-term time horizon) things like Starbucks or Whole Foods (although at least the latter is down substantially.) Healthcare costs are still going to be going up for those with insurance or people are going to be paying a larger and larger penalty.
People are going to be looking more for value. I continue to like Costco. As for Costco, Walgreens and CVS are not bad ideas either, but it would appear more and more people are trying to save money on prescription drugs by going to Costco, Target and Wal-Mart. (http://www.huffingtonpost.com/2013/03/28/costco-generic-drugs-prescription-cheap-cvs-expensive_n_2969698.html)
2. I still like healthcare. More customers and several trends that continue.
3. I like needs vs wants. Agriculture (look at the bidding war over Hillshire Farms by Tyson and Pilgrim's Pride) energy, certain real estate. staples and again, healthcare.
Just my two cents.