Stocks tied to infrastructure moved up after the House of Representatives passed the $1 trillion Biden Plan bill. The bill was passed over the weekend, leading to an attendant rise in infrastructure bonds on Monday morning.
An indicator of this rise could be seen through the Global X US Infrastructure Investment ETF under the ticker PAVE, as it recorded an all-time high, hitting 1.5 % in the opening minutes of the session. United Rentals also rose to 2%.
Infrastructure spending is key to economic growth and there were talks about this without results until now. From Obama’s shovel-ready projects to Trump’s Infrastructure Week, the Biden Plan is viewed by many as the generational catalyst.
The US Infrastructure Bill shows how the billions would be shared among federal agencies and states. It budgets for bridge and highway repairs, public transportation projects, new broadband, aviation, and other programs.
Aside from infrastructure stocks, there is positive speculation regarding construction materials stocks such as Martin Marietta Materials Inc. (MLM), Summit Materials Inc. Class A (SUM), and Vulcan Materials Co. (VMC).
Analyst at Jefferies, Philip Ng estimated a double-digit rate in earnings for construction-material stocks. These are companies that provide materials and storage facilities for heavy construction works.
As investors pile on stocks, the bill works towards social welfare. According to Biden, the bill is expected to “create millions of jobs, turn the climate crisis into an opportunity, and put us on a path to win the economic competition for the 21st Century.”