[ad_1]
Original Title: Biden’s Infrastructure Plan May Inspire Stock Market, But Market Won’t Buy It
Download the Sina Finance application to know the global exchange rates in real time
The U.S. government’s plan to improve the nation’s infrastructure may further fuel the stock market recovery, but questions about whether large-scale spending bills can break down layers of political barriers and how quickly Profits can penetrate the economy can dilute investor enthusiasm. In the past five business days, the S&P 500 has fallen in four business days, with a cumulative drop of more than 2%, far from the record set last week.
The infrastructure spending plan can be aimed at repairing bridges and roads, investing in connectivity capabilities, and tackling climate change. Many companies, including the construction, materials and even technology industries, are expected to see an increase in revenue.
US President Biden will travel to Pittsburgh next week to announce this infrastructure plan, which may reach $ 4 trillion in scale.
But investors pointed out that passing a bill must overcome many political hurdles, especially bills that must be financed by tax increases. Investors also expect that, in some cases, the distribution of project expenses may take several years.
Jim Baird, chief investment officer at Plante Moran Financial Advisors, said: “If we can pass a full-scale program, we will further promote the economic rebound that has shown positive momentum and strengthen confidence that we will maintain stronger financial support. the next years.”
But Baird said: “There is still a long way to go before the plan is passed in a very divergent Congress, and there will be big problems in funding sources.”
The Biden plan is expected to be divided into two parts, one is the preliminary plan for traditional transportation projects and the other is the second plan to solve the domestic problems of the universal provision of preschool education, national child care and community colleges. free.
The White House seeks to advance its plan after the new $ 1.9 trillion crown bailout bill passes. The passage of the new crown bailout bill brought the latest boost to the stock market. Since March 2020, when the epidemic was at its worst, the stock market has soared about 74%.
There are signs that the stock market is already assimilating optimism about infrastructure plans.
Goldman Sachs released a research report on Friday (March 19) that infrastructure stocks primarily include building materials, machinery, construction companies, and engineering. Since Georgia’s runoff results in early January showed the Democratic Party seized control of the Senate, the sector has risen 27% .The same period
S&P 500
The index rose about 5%.
Hodges Capital investment manager Eric Marshall said the stock market has begun to anticipate the possibility of launching infrastructure spending plans, and there are more investment opportunities for individual stocks that will benefit from vehicle infrastructure construction. electrical, such as charging batteries. Its properties include the silicon substrate used in the company’s charging cell production.
However, because Biden’s Democratic Party only has a small majority in Congress, some people are skeptical about whether the infrastructure plan can be easily passed in Congress. The key will be whether this plan will be related to tax increases, such as increased corporate taxes, which can also extinguish investor enthusiasm for this spending plan.
Sameer Samana, senior global market strategist at the Wells Fargo Investment Research Institute, said: “For the market, the possible question is … whether corporate tax will increase significantly.”
Although infrastructure spending is presented as an issue supported by the Republican and Democratic parties, former President Trump failed to push it during his presidency.
Investors said that even if the infrastructure bill passes, the distribution of expenses will take several years, so the benefits to the company may not be immediately obvious.
Jack Janasiewicz, Portfolio Manager at Natixis Investment Managers, said: “At present, there are some reasonable doubts about how the market views infrastructure solutions. Even if the case is approved, contracts that can start construction projects can be issued. quickly … some are too. It will take a long time. “
Massive information, accurate interpretation, all in the Sina Finance APP
Editor in Charge: Guo Jian
