As a massive $550 billion infrastructure bill winds its way through Congress to land on President Joe Biden's desk sometime this fall, investors should keep an eye on two sectors in particular. About half the funds allocated in the bill will go toward transportation infrastructure, and the other half will go toward areas such as power, water and sewage facilities, and broadband upgrades. You can find a great breakdown of the bill's planned spending here. All that spending should begin to flow in the first half of 2022. And the materials and industrials sectors are poised to benefit the most. The materials sector includes firms that produce raw materials such as chemicals, construction materials like steel, containers and packaging, metals and mined products, and paper and forest products. The industrials sector is made up of companies that produce capital goods, like equipment and machinery, and engineering and building products. Other companies perform construction, engineering or similar services. Companies in these sectors will be heavily involved in rebuilding and upgrading the national infrastructure. You can see those two sectors at the bottom right of the Finviz market graph below, under "Industrials" and "Basic Materials." This particular version of the graph shows the market's performance year to date. Like the broader market, the materials and industrials sectors are up for the year. (Green is up, red is down and the size of the box represents the company's market cap.) Many market analysts expect that bottom-right corner of the graph to become even greener if the infrastructure bill passes, which is likely. Monument Traders Alliance co-founder and Head Trade Tactician Bryan Bottarelli recommended one infrastructure stock to his readers on August 4 as a company likely to benefit from infrastructure spending. The stock rose more than 8% over the following five trading days before settling back a bit. If you're interested in finding out more about the trade recommendations Bryan and Head Fundamental Tactician Karim Rahemtulla provide in their research service Trade of the Day Plus, you'll want to check out this video. And as the infrastructure bill proceeds and the funds get closer to allocation, our Club strategists will likely be writing about stocks poised to gain from it. These should be some great investing opportunities, so stay tuned. Enjoy your weekend, Matt | 
No comments:
Post a Comment