Trump rant likely to put pressure on healthcare sector

By Trevor Hoey. Published at Jan 12, 2017, in Features

Trump trumps his own share market rally with his first speech after the election indicating that he will bring to account ‘murderous’ pharmaceutical enterprises sending the sector into freefall and immediately wiping more than 100 points off the DOW.

President-elect Donald Trump’s victory has undoubtedly been largely responsible for boosting global equity markets, but his first address following the election was far from confidence inspiring, prompting a sharp fall in the DOW and an equally substantial spike in the Volatility Index (VIX).

While his vendetta against so-called murderous pharmaceutical companies – you can watch it here – triggered a sharp downturn in US healthcare stocks, it may also be his credibility that takes a hit as he is taken to task on references to Nazi Germany like media misrepresentation at work in the US on one hand, while refusing to answer questions from media companies who he labelled as dishonest, arguably a very similar form of controlling information.

Also, taking aim at his own intelligence agency for allowing information to be released for public scrutiny may not be considered as the type of commentary expected from the President of the world’s most powerful country.

However, markets stabilised in the afternoon session, albeit not recovering to previous highs, and the DOW has finished up circa 0.5%. The FTSE 100 was up 0.2% with the DAX gaining 0.5% and the CAC 40.

Consequently, on the score of index movements, these slight gains are unlikely to be a key driver of Australian markets, particularly given they could be tarnished by Trump’s impact on the volatility index.

The impact for Australian markets

No doubt, the S&P/ASX 200 Healthcare index (XHJ) will receive a hit given that many Australian biotechs and pharmaceutical companies are leveraged to US markets.

On a more positive note, commodities could provide support with a recovery in crude oil prices and continued strengthening in the gold price generating positive sentiment in those sectors. However, one aspect worth noting was the relatively significant increase in the Australian dollar against the US dollar, up more than 1% from US$0.736 to US$0.744 as US markets drew to a close.

This could put a dampener on recent strong gains by Australian gold producers given the strengthening in the Australian dollar against the US dollar translates into a lower Australian dollar gold price.

One of the most interesting commodity related developments was in the uranium space where the world’s largest uranium producer, Kazatomprom, announced yesterday that it would reduce planned uranium output in 2017 by 10%, representing approximately 3% of annual global output.

It has been reported that if this reduction were to remain in place for three years the supply/demand deficit would increase from next year onwards. Prior to this development many analysts were factoring in a relatively near-term recovery in the uranium price, so this is likely improve sentiment towards the sector.

It should be noted here that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.

It certainly rubbed off on ASX listed stocks yesterday with strong gains by Berkeley Energia (+5.5%), Paladin Energy (+6.5%), Deep Yellow (+25%) and Boss Resources (+20%).

View Our Investment Portfolios

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why is Australia’s leading small cap publication

Founded seven years ago, is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise. provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more. is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!