Arguments over the US debt deal over the week has been concluded on August 2, giving signals to industries in terms of spending cuts. As predicted, it is near to see long term loses through the budget cut plan in certain industries. To remember, those were ''banks'' when European debt concerns first rise in global markets. Daily loses by financial sector hit European, US and Japan stocks as well. Now, it is time to decide which stocks are in danger as US budget cut has been arranged to come over possible national default; Healthcare Sector As everyone knows, upcoming cuts in medicare payments are on the move through 2012 as a result of debt deal. Then, it implies continuous federal regulations in US next months.
August 1 :
SUNH - 52%
SKH - 43%
KND - 29%
NHC - 12%
FVE – 10%
These were of course the first impacts of the plan on healthcare stocks. Investors must be cautious about the progress in this sector throughout the fiscal year 2012. It is easy to predict the possible risk in Pharmacy firms' stocks as complement impact!Energy Sector Global macroeconomics issues have been on the scene for months. Nowadays, lower growth concerns on US and Europe are long term topics in financial markets which will prevail in stocks market. In particular, Oil firms must be observed with daily news in terms of ''dollar index movement, growth related news, Chinese inflation risk, European debt concerns as well as Japan recover from the disaster''. Moreover, Feds further points will clearly be about global growth concerns which affect the energy sector, and oil prices at the same time by speculative movers. Meanwhile, supply chain news about oil relates to price side effect in the market. In brief, investors should be cautious about future developments in this sector related to the terms and factors mentioned above. As it is very hard times for this sector as global growth risk persist for months, these energy firms try to get daily wins with good news, but it is not continuous. After trade, it returns to the same market risk and wait for the daily related news again. Rising risks in oil and financial sector shows two more risky sector: Airline&Insurance Firms. Both are related to global growth risks!
Airline
on August 1
AMR -5%
DAL - 5%
LUV 2.4%
The date was on August 1 when uncertainties on debt deal was on the scene with loses in Dow Jones.
August 2
XX:XOI -1.3%
XX:XNG -1%
The day when the budget deal is signed officially. The upcoming ''tax hikes'' may damage related sectors and stocks as well. As global risks prevail, these hikes will be managed not to hurt economy in short term. The losses will not persist longer periods. Import - export sectors will affect Nikkei stocks ; for instance, auto and banking shares. When it comes to Japan economy, the decision of Bank of Japan is on the scene. As it is obvious, sectors has been trying to recover from earthquake recent weeks. The auto industry is close to produce the normal production if global concerns cool in coming weeks. Bank of Japan also decided to go on asset purchasing program to help the economy which will weaken the value of yen and increase the export focused sector trade volume at the same time. Then export focused firms are possibly to close to green colors in coming weeks after the policy. As it is known, Japan is strongly getting over the damages of the tsunami disaster which give positive signals to global markets:
JP:NK +1%
After the asset purchase program announcement.
Exporters:
TM: +0.6%
NINOF: +0.8%
NTDOF:+0.8%
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.