The timing of the Republican Debate on CNBC tonight is incredible as markets dive over 3% on each average. Yesterday I wrote that the market rose too far too fast and the first hint of bad news would spur a selloff. It did not take long for the Italian 10 year bond to spike this morning over 7% causing its ability to borrow money much more expensive. Italy is a much larger economy than Greece and if its country’s banks fail we now have a very high probability of contagion to US banks which makes it an obvious debate subject. European banks like Deutsche Bank and Credit Suisse were down over 10%.
Republican Debate on CNBC Subjects
Now as timely as the subject of Italy is and I am sure it will come up, it will not be the most analyzed subject on the debate on CNBC. The average US voter doesn’t understand the debt issues in Greece and Italy and how it effects them thousands of miles away. They want the US economy to get better and have jobs being created. The average American is much more likely to be unemployed than to understand how the financial markets are intertwined globally. Because of this job creation will be the number one focus I have a feeling.
Personally I hope it does not have any focus on the Cain accusations. Quite frankly, that has no effect on our economy or own government’s massive deficit. Even as our US dollar gains strength and global investors still flock to US paper as being a safe haven, we are not far away from having a major debt ceiling ourselves in this country. Because of this, the deficit will be another major subject covered in the debate on CNBC. This could have a direct impact to many sectors tomorrow based on what is said tonight. Defensive names and healthcare names both are heavily tied to government spending. Because of this I am sure the CEO’s of Lockhead Martin, United Healthcare, and Express Scripts will all be watching.
This Republican debate will have a lot of CEO’s glued to the television tonight as many of these Republican candidates know business and have run businesses themselves. These companies want to find a candidate to invest in which is confident they will not choke the business throats which is what is happening now. Companies are sitting on hoards of cash that could be used to create jobs but the management of US based companies do not trust government as it is eliminating big business from taking any risk. Not good.
Other Subjects on Debate on CNBC
Other areas of focus are going to be on fuel prices. Oil has crept back up close to $100 a barrel for West Texas Crude and this is going to have fuel prices start to creep back up to $4 a gallon soon. Because of this, I see energy as a highly important subject on the debate on CNBC tonight. I want to hear a strong bias towards natural gas because that does two things for our economy. First, it will create millions of high paying jobs as the infrastructure would have to be laid out. Secondly, it would drastically reduce the average fuel price at the pumps by roughly 50% or more. This would put hundreds of billions of dollars back into the economy as most consumers would spend it instead of save it. Companies that will be listening for this on the debate on CNBC are obviously the natural gas shale players like Chesapeake Energy and Southwestern. The big oil names like Conoco and Exxon will be listening and could potentially align to be buyers in the space if the right messages are said during the debate on CNBC. The airlines along with any company that has a trucking fleet like UPS, Conway, FedEx, and Waste Management will all be listening to what is said on this subjects.
Another big subject will be foreclosures as this is a massive black cloud over the US economy. There are millions of US households that are over 90 days dilenquent. This means the housing market could only get worse. Can the government make it into an investment opportunity? I bet this subject will come up and I am curious to hear what is said!
I personally cannot wait to watch it starting as I write this because I do not know who I am going to vote for. I am very confident I will not vote for Obama next year, so the debate on CNBC tonight will help me make my selection. I have always been a Newt fan, but Romney has a great financial background. A lot to listen to. I might follow up with another article tonight with my analysis after the debate on CNBC.
Have a good night,
Vinny's Stock Watch
INDU 0.00 N/A N/A NASDAQ 4148.338 +21.372 +0.52% S&P 500 1878.61 +3.22 +0.17% F 16.32 +0.09 +0.55% AKAM 53.35 -0.42 -0.78% FFIV 105.98 -2.21 -2.04% GOOG 525.16 -1.78 -0.34% NFLX 344.07 -9.43 -2.67% DECK 78.53 -0.25 -0.32% OPEN 70.23 -0.20 -0.28% DNDN 2.64 -0.03 -1.12% WLT 7.72 +0.07 +0.92% SCCO 30.20 +0.19 +0.63% GMCR 94.09 +0.01 +0.01% EPD 72.38 -0.77 -1.05% 1970-01-01 00:00
Tagsacquisition acquisitions Apple Bank of America banks China coal copper debt defense dividends earnings economy energy Europe financials Ford fundamentals GMCR Gold Google Greece growth hedge Italy market markets natural gas Netflix oil OpenTable retail revenue S&P 500 safety sales short shorting silver stocks Technology trading VIX volatility yield
DisclaimerDisclaimer: This site may include market analysis and other recommendations. All ideas, opinions, recommendations and/or forecasts, expressed or implied herein, are for informational and educational purposes only and should not be construed as financial product advice or an inducement or instruction to invest, trade, and/or speculate in the markets. Any action or refraining from action; investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk an consequence, financial or otherwise.