Week In Review: How Trump's Policies Moved Stocks - Dec. 22, 2019

Spending bill passage, ACA ruling move stocks more than impeachment

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump and his administration with this weekly recap compiled by The Fly:

1. MARKET YAWNS AT IMPEACHMENT: The House voted on Wednesday in favor of a trial to impeach President Donald Trump. However, the stock market appears to be giving little credence to the chances of the president being removed from office, as it has since the impeachment drama began, with the major averages rising to new all-time highs on Thursday in the wake of the impeachment vote.

2. ACA 'STATUS QUO' RULING:  Oppenheimer analyst Michael Wiederhorn noted that the Fifth Circuit Court of Appeals upheld the ruling that the Affordable Care Act's individual mandate is unconstitutional, but sent the ACA case back to a lower court to reconsider, which he believes was in line with most opinions of what would happen. The ACA uncertainty overhang is "not going away any time soon," but "neither is the ACA," which pushes off another overhang that has been plaguing ACA-impacted stocks such as Medicaid Managed Care Organizations and hospitals, contends Wiederhorn. Publicly traded companies in the medical insurance space include Anthem (ANTM), CVS Health (CVS), Centene (CNC), Cigna (CI), Health Net (HNT), Humana (HUM), Molina Healthcare (MOH), UnitedHealth (UNH) and WellCare (WCG). Publicly traded companies in the hospital space include Community Health (CYH), HCA Healthcare (HCA), LifePoint (LPNT), Tenet (THC) and Universal Health (UHS).

In his own note to investors regarding the court of appeals' "tweener" ruling, JPMorgan analyst Gary Taylor said it was in line with his expectations but probably better than the prevailing consensus. He believes the second part of the ruling, namely remanding the issue of severability back to the district court for a more thorough examination, is better than prevailing market expectations as it indicates that two Republican judges at least took issue with the lower court's cursory examination of severability. Centene and Molina Healthcare have by far the largest earnings exposure to the Affordable Care Act, according to the analyst, who believes the ruling removes a partial overhang on both stocks.

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