Biden’s new proposed $2 tn infrastructure package is a gargantuan bill (coming right after the newest pandemic relief package) that will have significant effects on stocks generally, and specific ones more narrowly. The plan is so big that it harkens back to 1950s era spending. Barron’s described it best, saying “At 10% of current gross domestic product, doled out over eight years, the plan reads like a Rooseveltian blueprint for economic and social engineering”. The big winners are pretty clear: infrastructure stocks, and more specifically construction and industrials. The Invesco DWA Industrials Momentum (PRN) and the Industrial Select Sector SPDR (XLI) are great ways to play the rise in these types of shares, with the latter offering more large-cap exposure. In terms of specific names, look for MasTec, Aecom, and Jacobs Engineering Group.
FINSUM: Biden is setting up infrastructure stocks to have a golden run over the next few years. As the package inches closer to passing, these sectors should rise.