Welcome to Thoughts on the Market.
I'm Michael Zezis, Morgan Stanley's Global Head of Fixed Income Research and Public Policy Strategy.
Today, we'll be talking about U.S. policy impacts on the market that aren't about tariffs.
It's Wednesday, March 12th, at 10.30 a.m. in New York.
If tariffs are dominating your attention, we sympathize.
Again this week, we heard the U.S. commit to raising tariffs and work out a resolution,
this time all within the span of a workday.
These twists and turns in the tariff path are likely to continue, but in the meantime,
it might make sense for investors to take some time to look away,
instead focusing on some key sectoral impacts of U.S. policy choices that our research colleagues have called out.
For example, Andrew Prokoko, who leads our clean energy equity research team,
calls out that clean energy stocks may be pricing in too high a probability of an inflation reduction act repeal.
He cites a letter signed by 18 Republicans urging the Speaker of the House to protect some of the energy tax credits in the IRA.
That's a good call out in our view.
Republicans' slim majority means only a handful need to oppose a legislative action in order to block its enactment.
Another example is around managed care companies.
Aaron Wright, who leads our healthcare services research effort,
analyzed the impact to companies of cuts to the Medicaid program and found the impact to their sector's bottom line to be manageable,
so keeping an inline view for the sector.
We think the sector won't ultimately face the risk as, like with the IRA,