Leg Down Likely - 4 Stocks That Would Get Hurt The Most

chart from the Concord Coalition on supercommittee goal

For some inexplicable reason, the stock market seems to be ignoring the "sequester" that goes into effect tomorrow (March 1st), and we believe the economy will be significantly affected by it.   The consensus is that if the Sequester goes into effect, GDP will drop by approximately .6% and there will be 750,000 to 1 million jobs lost.  Even if we strike a "grand bargain" to avoid the "sequester," any significant rise of revenue by taxing, and spending cuts by the government, will negatively affect economic growth.

WASHINGTON — Working against a midnight deadline, negotiators for the White House and congressional Republicans in Congress narrowed their differences Monday on legislation to avert across-the-board tax increases. Congressional officials familiar with talks between Vice President Joe Biden and Senate Republican leader Mitch McConnell said one major remaining sticking point was whether to postpone spending cuts that are scheduled to begin on Jan 1.

By Research Recap: The three major credit rating agencies have made initial comments on the failure of the Super Committee to reach agreement on a deficit cutting plan, and it is Fitch that seems closest to taking action as a result. In Fitch’s August 16 statement, when it affirmed the US ‘AAA’ sovereign ratings with a Stable Outlook, the agency commented that it would update its US economic and fiscal projections in light of the work of the ‘Super Committee’.

Moody's credit rating agency downgraded Greek debt by three notches on Monday and warned that the eurozone rescue was almost certain to trigger another two-notch cut to default status.Moody's, taking a similar line to the Fitch agency on Friday, said that once old debt had been replaced with new bonds on easier terms under the rescue scheme, it would assess the new instruments and issue a new notation.

The key word in the title of this post, from my perspective, is “alternatives”–not “additions.”  The Obama Administration is reportedly considering some new proposals for a variety of business tax cuts that they believe would be particularly effective in creating jobs quickly.  As the AP’s Julie Pace reports:

The Mole submits: U.S. stocks rallied Thursday with the S&P 500 Index gaining the most in two weeks, as economic reports from China, Japan and Australia that surprised on the upside boosted optimism about the global economy.