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January 10, 2019

7 New Laws Affecting Stocks

The turn of the year brought a wave of new laws and industry restrictions many feared would hurt their portfolios. Here’s a look at how stocks exposed to recent legislative changes have performed. 
Minimum Wage Increases
Nearly two-fifths of U.S. states are raising their minimum wage, which increases input costs for producers nationwide. Nonetheless, the S&P 500 and Dow Jones are trade slightly above their levels from the beginning of January. 
Women Take Board Positions
Publicly held companies in California have until the end of the 2019 to place at least one woman on their board of directors. They must include two or three by 2021 depending on board size. The market effects of this state-specific law won’t be seen for some time.
Cigarette Market Contracts
The legal age to purchase tobacco products in Massachusetts now rests at 21, which shrinks the otherwise swelling market for even smokeless devices. Pennsylvania also enacted a law banning smoking at public beaches and parks.
Despite the industry’s continued regulatory challenges, Altria Group Inc (NYSE: MO), Philip Morris International Inc. (NYSE: PM) and British American Tobacco PLC (NYSE: BTI) have shown relatively stable trading action since the start of the year.
Drugmakers Recycle
In response to the opioid epidemic, New York’s “Drug Take Back Act” charges drug manufacturers with collecting, transporting and destroying leftover prescriptions. Chain and mail-order pharmacies are also required to assist in collection with drop boxes and prepaid return-mail envelopes.
How the measure affects the operating expenses of Pfizer Inc. (NYSE: PFE), Merck & Co., Inc. (NYSE: MRK), Walgreens Boots Alliance Inc (NASDAQ: WBA) or Humana Inc (NYSE: HUM) is yet to be seen. 
Hall Monitors Go Mobile
Pennsylvania school districts are now required to install cameras in school buses to record driver safety. The mandate’s effect correlated with a surge in ADT Inc (NYSE: ADT) since the start of the year.
Gun Rights Restricted
California enacted laws to disqualify domestic violence offenders and people committed to mental institutions twice in one year from gun ownership. Washington also raised its legal purchasing age to 21. Sturm Ruger & Company Inc (NYSE: RGR) slipped at the year’s start.
Plasticware Shrinks
California will fine full-service restaurants $25 per day for serving plastic straws without a customer’s explicit request. Stores, restaurants and manufacturers in New York City are barred from using foam cups, packing peanuts and takeout containers.
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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