Market Commentary: This week’s economic news series together with the three-part Treasury auction will likely take a backseat to the expected decision from the Supreme Court on the so called “Obamacare” issue.
It is a very close call as to how the Court will rule. Over three days in late March, the Supreme Court held the longest oral arguments in 45 years as both sides presented their cases.
Perhaps as early as Monday investors will know whether the Court has decided to endorse “Obamacare” in its entirety, thrown out just the individual mandate, overturned the entire law or come to some other split decision.
If there is one thing that markets and investors do not like, it is uncertainty.
Generally speaking, stocks should benefit if parts or the entire Act are overturned. Rising stock prices will tend to draw mortgage interest rates higher as well.
On the other hand, if the Court upholds the Act in its entirety, health care stocks will likely climb sharply but most other sectors will see selling pressure as the expected sharp cost increase businesses will endure are factored into future earnings equations. Should such an event occur, slumping stock prices will tend to support the prospects for steady to perhaps fractionally lower mortgage interest rates. Heads up.
