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CNBC: Biggest Stock Winners, Losers From Trump's State of Union

CNBC: Biggest Stock Winners, Losers From Trump's State of Union
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By    |   Wednesday, 06 February 2019 09:25 AM

Infrastructure and defense shares are two of the winners from President Donald Trump’s State of the Union address, CNBC reported.

Trump, who vowed in 2016 as a candidate to back $1 trillion of infrastructure spending over 10 years, was vague about his plans, Reuters reported.

“Both parties should be able to unite for a great rebuilding of America’s crumbling infrastructure,” Trump told Congress and government leaders.

“I know that the Congress is eager to pass an infrastructure bill — and I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting edge industries of the future. This is not an option, this is a necessity.”

Trump did not put a price tag on the effort, in contrast to his 2018 State of the Union address when he called on Congress “to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need.”

A number of administration officials, including Acting Environmental Protection Agency chief Andrew Wheeler, will be holding events around the country this week to discuss infrastructure, while a U.S. House panel will hold a hearing on infrastructure needs on Thursday.

In February 2018, Trump asked Congress to authorize $200 billion in federal money over 10 years to spur road, bridge and other projects mostly funded by states, cities and the private sector.

That plan was roundly criticized and never voted on in Congress, which was then controlled by Republicans. Democrats now control the House of Representatives and are demanding that Trump back new revenue as a condition of moving forward with an infrastructure plan.

Reuters reported last month that the administration was considering an infrastructure plan for as long as 13 years.

Stocks like Vulcan Materials, Jacobs Engineering and Fluor Corp could get a boost in the wake of Trump's push for greater infrastructure spending, CNBC explained.

Drug stocks, meanwhile, are the biggest loser as Trump pushes for lower medicine prices.

Trump pressured drug companies to lower medicine prices, stating it is “unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place.”

“I am asking Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients,” Trump added. “We should also require drug companies, insurance companies, and hospitals to disclose real prices to foster competition and bring costs way down.”

If the government passes legislation that makes drug companies lower their prices, shares of Merck and Pfizer, as well as related companies like CVS Health and UnitedHealth, could be under pressure, strategists warned CNBC.

Wall Street opened lower Wednesday as investors evaluated developments around U.S.-China trade talks ahead of the March deadline and Trump’s State of the Union address which offered no specific economic policy initiatives, Reuters reported.

At the State of the Union address on Tuesday, the president outlined his political priorities for the year and reiterated his vow to build a wall along the U.S.-Mexico border. His reference to the Feb. 15 deadline for a budget deal also reminded investors that a second shutdown was not fully off the table.

“There is no enthusiasm following last night’s State of the Union message and the reason for that is investors are worried about political fighting and that is concerning,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Investors are focusing on earnings and the next big thing, that is trade. Before the March deadline, there will be some positive news on trade, whether its a trade deal, a partial trade deal or an extension of trade talks.”

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Infrastructure and defense shares are two of the winners from President Donald Trump’s State of the Union address, along with the broader market, CNBC reported.
biggest, stock, winners, losers, trump, state, union
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2019-25-06
Wednesday, 06 February 2019 09:25 AM
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