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What Companies Would Be Hurt Most by Fiscal Cliff?

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  • Description

    FBN’s Liz MacDonald on how the potential fiscal cliff would impact businesses.

  • Duration 3:21
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This transcript is automatically generated

-- don't come out of that.

Now -- of the fiscal cliff which companies will get hurt the most if we go should.

Fight over the cliff Elizabeth MacDonald is here with a ounces in.

What are we looking at as far as bad news for which companies.

We know what Wall Street has been handicapping this and coming up but their own baseball score -- here and what Goldman Sachs is finding is that a number of companies will.

You know dive over the fiscal cliff but I -- -- sometimes fiscal -- -- a pardon me but you know we look at some -- -- -- -- -- -- you know whatever is gonna happen generate first but here's why they get more than half of their sales from government contracts.

So that's a -- it's not it's not just a Lockheed -- of the world of the Raytheon so the world to Northrop -- You're gonna see any here Humana you gonna see other health care companies.

Of course medical device companies are gonna get hit the medical device tax but they get -- striker for example of Becton Dickinson.

It's a lot of their sales from government contracts are gonna see -- here look about Motorola.

Motorola.

HCA holdings in there -- -- and Waste Management companies like Waste Management republic service.

It's actually one of the stock prices on Malan -- -- companies down loosely doesn't appoint because Goldman Sachs has been warning since 2011.

When that debt ceiling crisis in the summer 2011.

Triggered the fiscal cliff you know side -- -- -- yet given -- that these companies could underperform but there's another big Wall Street player weighing in on this and it's Fidelity.

And Fidelity is staying the course watch out for the banks.

Not just because they've been always under pressure as attracted general economy -- also because this is capital spending is down as of the third quarter really went south.

And they're worried about that they worried about enemy activity dropping off by about 20% vs the prior year.

And banks make a lot of -- money off of -- so if you look you know the attitude I think -- A trillion dollars in cash still sitting tight on the sidelines for reason so -- say that the banks are pretty gonna get stung here.

But the -- safe havens like it because that why -- -- Biotech is one that Fidelity has been talking about because they get their money from.

Venture capitalists and not from government they do get R&D credits the NIH for example.

You know it's gonna see it cut -- it ended federal budget there and also -- health care sector reits real estate place and hunger is I think some interesting ideas at a Fidelity.

You mentioned all these companies -- -- Evan activity down some banks hurting because they're not getting those fees.

-- -- you flip the story around -- Washington finally gets his act together a -- we see a boom on the other side of that but money pouring in are not public prints that are.

An -- -- -- great fragility little up to I am optimistic I don't think the worst of the country and we'll get beyond this right now but I'll say is something that the problem in Washington DC is even reporting.

Is so called emergency -- out senate has not passive but you're got a budget about four years.

And then -- gang of six gang of twelve gang of ten meetings are budgeting by committee would -- formal budgeting process really in place.

You know the senate for very long time so that's why we have all this emergency crisis.

You know kind of budgeting and crisis afflicting their country what.

It's amazing to me I mean these companies -- absolutely hamstrung how can make planned for the future believe you know that we're not at -- with city underground -- All right let's -- -- not very interest ankles equalize -- Washington Missouri he's so much our.

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