Election --- Su (fast)
>> president bush’s income and dividend tack cuts failed to spark the market . they all stand below the closing levels before bush’s inauguration on january 22, 2001. the s&p has lost nearly 16% and the dow 5%. on the three indexes, only the s&p is high they are year. some strategists speculate the market may begin to recover after the election, unless there’s a repeat.
>> senator kerry has promised he would kill them for the wealthy for most people who take advantage of it. he has virtually no chance of doing that if the house stays republican. and the only safe bet tonight -- it’s a tough call on a lot of other thing, but the only safe bet is that the house will stay republican.
>> record trade and budget deficits during the bush administration also undermine the dollar. the dollar’s lost 36% of the value against the euro, sailing to a record low in february, now two cents above the low. the losses against the yen were less pronounced down 9.4% since bush took office. japan sold the record amount. shoring up the record budget deficit could boost the dollar. candidate kerry has promised to repeal some of the income and dividend tax cuts to shrink the $415 billion budget sportfall. a task one analyst calls impossible.
>> senator kerry has promised that he would kill them for the wealthy for most people who take advantage of. he has virtually no chance of doing that if the house stays republican. and the only safe bet tonight -- it’s a tough call on a lot of other thing,. the only safe bet is that the house will stay republican.
>> government bond have gained during bush’s term, pushing yields lower if u.s. recession at the start of the bush presidency and recent signs of economic weakness helped lift 10-year bonds even as the ballooning deficit pushed up the size of bond offerings. analysts say drug stocks are among the groups most likely to be effected. merrill lynch analysts predict a victory by senator kerry will hurt the entire group because he supports lower prices. bloomberg’s su keenan has more on the story from new york. what more can you tell us?
>> right now the ability o raise prices drives profit at the nation’s largest drug company, and pricing is the main reason analysts are saying a win by presidential hopeful john kerry could be negative for drug stock. in a note to clients, merrill lynch said basically that a kerry victory would likely result in a move to lower prices through medicare and medicaid. they say there is a riss it can new democratic leadership won’t provide financial incentives for the companies to “play ball and participate in the programs.” merrill also predicts a negative effect for h.m.o.’s and says kerry represents greater uncertainty for the managed care industry. sanford bernstein’s richard evans says you can expect volatile trading for the entire industry group on election day. he says investor concern about the pricing issue will cause a relief rally if bush wins, a selloff if kerry is named the new president.
>> the destination is the same. we’re going to government influence on drug pricing. and you want to drive there or take an airplane? kerry will get you there tomorrow, whereas a bush administration would get you there over a period of years.
>> in evan’s view, companies more reliant on drug revenues, such as pfizer, will be most effected by the election. more diversified are less at risk. when it comes to biotech, the tables are turned. a kerry victory is seen as more beneficial given the sup tort of stem-cell research―the support of stem-cell research.
>> thanks for that, su. the next executive cabinet will probably look different next year. there is wide speculation that secretary of state colin powell does not intend to join a second bush administration. defense secretary donald rumsfeld has come under heavy pressure as well for his handling of the iraq war and the abu ghraib prison scandal. as for treasury secretary john snow, he says he hasn’t made up his mind.
>> i’m honored to be part of the president’s cabinet and serve in his administration, and enormous admiration for him. but that’s an issue that the president and i would need to talk about between ourselves. i serve at his pleasure, and assuming the president is re-elected, i’m sure we will have conversations.
>> two of president bush’s cabinet secretaries resigned during his first term, including treasury secretary paul o’neill and environmental protection agency chief whitman. george tenet and securities and exchange chairman harvey pitt departed from the bush administration. in addition to the president, the u.s. citizens will be picking their representatives and senators today. while all 435 members of the house of representatives face votes t republican party is expected to maintain the majority. 34 senate seats are being contested. that could shift the balance of the upper house of the u.s. congress. republicans currently control 51 seats t democrats 48 with one dependent. most incumbents are expected to hold onto the position. still, races in florida, kentucky, colorado, and six other states are considered too close to call. barclay’s capital raised the one-month euro forecast. the chief strategist at the world’s seventh largest scurn si trader joins us next to sell tel us where the currency is heading after the election.
