Cloud Peak Energy, Bank of America, and More: Here’s Why These Stocks Are On the Move Today

After falling sharply overnight and opening relatively flat this morning, Wall Street is now in bull mode as all three major indexes and crude oil are now higher. As of around noon, the Dow Jones index is up 169 points, while the S&P 500 and NASDAQ indices are 0.7% in the green. WTI crude futures have rallied up 1.5% to trade above $45 per barrel.

In this article, let’s analyze how the prospect of a Trump Presidency has caused traders to buy and sell Cloud Peak Energy Inc. (NYSE:CLD), Bank of America Corp (NYSE:BAC), Community Health Systems (NYSE:CYH), Tenet Healthcare Corp (NYSE:THC), and LifePoint Health Inc (NASDAQ:LPNT). Let’s also examine how the investors from our database were positioned towards the stocks at the end of the second quarter.

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Cloud Peak Energy Inc. (NYSE:CLD) shares have spiked 17% as sentiment towards the stock has sharply improved. Seeing as Donald Trump is a big proponent of coal, traders hope that he can roll back regulations on electric utilities and send demand for coal higher. Also likely helping boost the stock today is potential short covering. As much as 11.7% of Cloud Peak’s float was short just a few weeks ago. The number of funds from our database with holdings in Cloud Peak Energy Inc. (NYSE:CLD) fell by 2 quarter-over-quarter to 8 at the end of June.

Investors have piled into Bank of America Corp (NYSE:BAC) to the tune of 4.8% today as traders anticipate a roll-back in financial regulations that have hampered the bank’s return on capital and profitability. If Bank of America can charge more on its fees to various clients, the bank can deliver more dividends and buy back more stock for its shareholders. In addition, with the election now over, the prospect of an eventual interest rate hike looks more likely. 102 elite funds were long Bank of America Corp (NYSE:BAC) at the end of June, down 8 funds from the previous quarter.

On the next page, we find out why traders are selling Community Health Systems, Tenet Healthcare Corp, and LifePoint Health.

Community Health Systems (NYSE:CYH), Tenet Healthcare Corp (NYSE:THC), and LifePoint Health Inc (NASDAQ:LPNT) are each deep in the red as traders anticipate the eventual repeal of Obamacare. Given that the policy has to varying degrees benefited each company by increasing demand, a repeal of Obamacare could mean softer results for the three names in the coming years. The three companies have disappointed some traders even before November 8 due to labor wage pressures and unfavorable payer mix, among other factors.

Seeing as Trump will become President in 2017 and the Republicans control the House and Senate, there won’t likely be much legislative opposition to a repeal. Given that Trump will appoint another Supreme Court Justice, there might not be any judicial opposition either. Although it remains to be seen what type of system will replace Obamacare, uncertainty currently reigns over the sector.

Of the around 749 funds that we track, 39 were long Tenet Healthcare Corp (NYSE:THC) at the end of the second quarter. Meanwhile, 33 funds were bullish on Community Health Systems (NYSE:CYH) and 22 were long LifePoint Health Inc (NASDAQ:LPNT) during the same time period.

Disclosure: None