Analysts Wonder How Reform Will Affect Wall Street
U.S. News & World Report examines how a health care overhaul could affect investments. "While politicians on Capitol Hill remain fixated on pinpointing direct costs, analysts on Wall Street are worrying about an even more elusive calculation: the downstream impacts reform would have on the markets."
Since the Clinton presidency, mutual fund managers "have known it would be only a matter of time" before Congress returned to health reform. This summer's health care debate "has brought new urgency to fund managers' decisions." And their attention to the health sector comes "as healthcare stocks are at somewhat of a crossroads. In 2008, some managers bulked up on healthcare, betting on the industry's historical ability to weather downturns, but they have been unloading these holdings in favor of other sectors."
The valuation of stocks has become a central issue. "Congressional action has introduced significant uncertainty into the economy, leaving analysts unsure whether or not concerns are built into stock prices. At the same time, different sectors of the healthcare industry, which encompasses everything from pharmaceuticals to health insurance, stand to win or lose based on what bill ... makes its way through Congress. To get a sense of how fund managers are reacting to legislative developments, U.S. News spoke with Robert Hodgson, the veteran manager of the BlackRock Healthcare Fund" (Silverblatt, 9/21).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.