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Richard Drew / AP

Wall Street is closely following the House vote on the American Health Care Act. Health care stocks are almost guaranteed to move in one way or the other next week, depending what happens this afternoon.

But the House vote is just the beginning. "Wall Street seems to understand that the House bill is not the final product, and some of the draconian measures that are most negative to the group almost certainly will be removed to get the bill through the Senate," Spencer Perlman and Sumesh Sood of investment research firm Veda Partners said in a research note Friday.

Here's what could happen to health care stocks in the short term.

If the bill passes the House:

  • Hospital companies (HCA, Tenet Healthcare, LifePoint Health, Community Health Systems, Universal Health Services) could suffer since Trumpcare would increase uncompensated care.
  • Health insurers that focus on Medicaid (Centene, Molina Healthcare, WellCare Health Plans) could trade down since the bill would phase out Medicaid expansion.
  • Medical device companies (Stryker, C.R. Bard, Zimmer Biomet, Boston Scientific) could trade higher since Trumpcare permanently repeals the device tax.
  • Drug companies may not move much, since the bill doesn't tinker with pricing.

If the bill fails:

  • Hospital stocks would "experience a significant relief rally," Mizuho Securities analyst Sheryl Skolnick said in a note Friday. Medicaid companies would, too. But hospitals would still struggle with high labor costs and declining admissions.
  • The failed vote could threaten tax reform and could drive down many other health care stocks that would benefit from that, Perlman and Sood said. Pharmaceutical companies clearly want tax reform. The large health insurance companies (Aetna, Anthem, Cigna, Humana, UnitedHealth Group) — which derive all their earnings in the United States and usually have a tax rate around 40% — also badly want the corporate tax rate lowered to at least half that.

Go deeper

1 hour ago - Technology

Scoop: Facebook exec warns of "more bad headlines"

Illustration: Annelise Capossela/Axios

In a post to staffers Saturday obtained by Axios, Facebook VP of global affairs Nick Clegg warned the company that worse coverage could be on the way: “We need to steel ourselves for more bad headlines in the coming days, I’m afraid.”

Catch up quick: Roughly two dozen news outlets had agreed to hold stories based on leaked materials from Facebook whistleblower Frances Haugen for Monday publication — but the embargo fell apart Friday night as participating newsrooms posted a batch of articles ahead of the weekend.

"Atmospheric river" to whiplash Northern California from drought to flood

A map depicting 24-hour preciptation forecast (inches) ending Monday at 5a.m. local time. Photo: NOAA

A series of powerful "atmospheric river" storms are set dump historic amounts of rainfall across parts of drought-stricken California and the Pacific Northwest from this weekend, forecasters warn.

Why it matters: A strong atmospheric river, packing large amounts of moisture, is predicted to whiplash Northern California from drought to flood.

Inside Biden's Taiwan flubs

Illustration: Aïda Amer/Axios

Twice this year, President Biden has blurted out commitments that the U.S. is prepared to defend Taiwan against a Chinese invasion — forcing the White House to walk back his statements and leading to confusion over a high-stakes national security policy.

Why it matters: U.S. defense officials have publicly aired their concerns that China will take Taiwan by force in the next four to six years, perhaps sooner. The president's position on this question may soon have real-world, life and death consequences.