May 24 was big day in the news. Continued fallout from the UK terror attack, the release of the Fed minutes from their May 3 meeting, and the Congressional Budget Office (CBO) scores for the AHCA were released. Here are my major takeaways.
$1 The Fed’s minutes overall confirmed suspicions that a rate hike is still on course for the June meeting (June 13-14). The committee maintained its commitment to a hike if economic indicators stayed its course over the next month. The dollar and U.S. Treasury yields fell as a result. Long term there are concerns about housing bubbles and their potential impact on the U.S. and global economies. Mortgage delinquencies are a factor to watch.
$2 The CBO scores for the American Health Care Act estimate 23 millions Americans would lose their insurance. This figure adds pressure to the U.S. Senate to rewrite this bill in such a way that protects more Americans than the House bill and incentivizes insurers to stay in the health care exchanges for the 2018 cycle and beyond. The insurers are anxiously waiting for some positive sign from Congress. Volatility likely will remain in health care stocks until some appear.
$3 President Trump’s released budget included a 10% increase in defense spending, almost certain to be included in any FY18 budget in the wake of the UK terror attack. Defense contractors stand to gain some footing in the out years.
That’s it for now.