Oh, that's right. It's an election year. It's almost like we forgot what it looks like. We forgot that there's going to have to be some corporate bashing somewhere.
Sure enough, thanks to some outsized price increases by Mylan (MYL) of the EpiPen, a necessity for those who need to stop a reaction in its tracks, we were reminded of what lurks as we get to November: promised interference by someone needing to make headlines to win the presidency.
Mylan provided Hillary Clinton with a perfect moment to exclaim that this was "the latest troubling example of a company taking advantage of consumers."
Hmmm, didn't even restrict it to drug companies.
Capitalism needs to be restrained!
I am not saying Mylan should or shouldn't have done what it did. I am saying that from the point of view of the stock market, anything that provokes that kind of knee-jerk reaction is going to have to be recognized as a negative force and not be dismissed on day one.
Which is why I felt that stepping up to buy any pharma into the bell, when they were really getting clobbered, seemed just too glib. Sure, maybe they can bounce in a couple of days, but if Clinton got good press response on this, and it is a way to dodge email discussions, then it is game on for corporate bashing, and stock prices in this rarefied moment can't handle it.
The cross-currents here are huge, though. Pharma both big and little had been tremendous places to be until the EpiPen imbroglio gave Clinton something to soapbox about. I suspect we will have the rally frozen and the whole game of who is Sanofi (SNY) going to buy or what drug approval is about to burst on the scene is just too risky right now.
So watch the higher-dividend drug plays for the first bounce, but more important, watch politics. That's what's in charge for the group -- and perhaps for a few days, the overall market -- for now.