Open up and say…“Ahh!”

Any moment now, the Supreme Court will weigh in on the Constitutionality of Obamacare subsidies or at least the language involved. It could decide whether the patient bites the bullet sooner rather than later. Suffice it to say, it’s complicated and this has been a raw deal from the very beginning, except for two groups- healthcare insurers and the healthcare industry.

Health Insurers were already in roll-up mode before the healthcare law came into effect, but they have gone into overdrive lately. The industry, which has limitations established by the healthcare law, says it wants to get leaner, but it is largely responsible for writing the laws in the first place. So, with this consolidation, we’ll probably see the Big Five become the Big Two or Three.

Game on, but who’s the loser?

Of course, it’s not just healthcare insurers; the entire medical space has been a frenzy of buying and selling.

The Health Care M&A Market – Deal Volume by Sector

Source: The Health Care M&A Report, April 2015
Irving Levin Associates

Hi, Robot

It was another great week for tomorrow’s technology from robots to drones to the Internet of Things (IoT).  An “emotional” robot sells out in minutes in Japan and the current issue of Foreign Affairs is dedicated to robots:

Last week, Google’s Nest launched a new product. Yesterday, Fitbit, Inc. (FIT) continued to be hot, while Facebook (FB) got a share price upgrade. In fact, this smashes all the critics who criticized FB for the Oculus Rift (OCLS) takeover.

Yesterday, Piper Jaffray upped its target on Facebook to $120 from $92. If you do the math, it means Oculus Rift is now worth $64 billion more because of the virtual reality headset- Zuckerberg and company paid $2 billion while the peanut gallery screamed in horror.

Moreover, robots, drones, and the internet of things will become ubiquitous, touching our daily lives.  It’s crazy not to have a piece of the action.

.Today’s Session

We have plenty of economic data being released today to move the market. The major indices continued to trend higher this morning following the release of the Advanced Report on Durable Goods for the month of May by the Census Bureau. In the month, new orders for manufactured durable goods fell by $4.1 billion or 1.8% to $228.9 billion. However, when excluding transportation, new orders actually rose by 0.5%. Defense new orders played a large part in the rise, as when they are excluded, new orders actually fell 2.1%. The decline in shipments partially improved, falling 0.1% in May after falling 0.2% in April. A bit of good news may be that inventories of manufactured durable goods have fallen for the 23^rd consecutive month, this time by 0.2% to $400.6 billion. How could this be good? Well, it’s only a matter of time before businesses will need to replenish their inventories, therefore increase their demand for labor.

In the afternoon commentary, we dig further into some other morning releases, including the Federal Housing Finance Agency (FHFA) House Price Index (HPI) report and the new home sales report from the Census Bureau.