Displaying items by tag: materials
This week was a big one for infrastructure stocks. After years of discussion, Biden took action and put forth an eye-opening $3 tn package (in two parts) for American infrastructure. The package would focus on infrastructure, education, work force development, and fighting climate change. The aim is to make the economy more productive. However, for the stock market, one of the immediate benefits is how such government dollars would affect infrastructure stocks. Most specifically, look at the following sectors: machines, construction, and materials stocks.
FINSUM: $3 tn is a great deal of money, and a lot of it will likely flow into the private sector to fulfil these mandates. Time to dig in and pick winners. We will continue coverage on this in the coming week.
Whether we like it or not, a recession is likely headed our way. Industrial numbers are waning, and even consumer data is getting weaker. So assuming we have a recession, where is the best place to hide? A couple suggestions today. How about materials stocks, whicg have been on a tear this year, up 50% or more. Check out Vulcan Materials and Martin Marietta Materials, which specialize in gravel, sand, and crushed stone. Materials stocks, like garbage-disposal companies, are quite recession resistant.
FINSUM: These stocks are pricey right now, but the demand for them seems likely to stay high if the economy keeps trending downward.
The trade war has far reaching consequences. One way to think about it, as bleak as it sounds, is that there is no winner whatsoever. However, there are sectors, ETFs, and stocks that will likely lose more than others. The technology, materials, and industrial sectors stand to lose the most in a prolonged trade war as they have the largest proportion of manufacturing in China and the highest proportion of Chinese customers. Boeing and Ingersoll-Rand, for instance, are both very exposed to China. However, the greatest pain is likely to be felt by technology companies in the iShares PHLX Semiconductor ETF like Qualcomm, Micron Technology, Broadcom, and Texas Instruments.
FINSUM: Basically anyone making or selling a large amount of products in China is in trouble. We also wonder about how increased tariffs would flow through to retailers who source a high percentage of their products in China (e.g. Walmart, Target etc.).