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.

3. HEALTH INSURANCE TAX REPEALS: On Tuesday, Stephens analyst Scott Fidel noted that the spending bill that Congress was voting on this week to avoid a shutdown includes an amendment to the Affordable Care Act that will permanently repeal the health insurance tax, or HIF, and also fully repeal the medical device and Cadillac taxes. A permanent repeal of the HIF is "a major unanticipated win" for managed care organization stocks, said Fidel, who sees Humana having the most EPS upside to consensus 2021 estimates based on this news. A HIF repeal should also "significantly increase" accretion for Centene from its pending merger with WellCare, added Fidel.

4. AMAZON SAID TO HELP VENDORS OFFSET TARIFFS: Amazon (AMZN) has helped protect some vendors from President Trump's tariffs on Chinese products by paying them up to 25% more for the goods it resells, Business Insider's Eugene Kim reported this week.

5. DAVOS: Earlier this week, Bloomberg reported that administration officials say President Trump plans to attend the Davos economic forum. The event has been speculated as a possible venue for Trump and Chinese President Xi to meet and sign the "phase one" trade deal that has been struck between U.S. and Chinese negotiators.