Another day, another rally. As I’ve said all along do not fight the Fed.
Nor, the Federal Government, for that matter. In this case, the Biden infrastructure bill seems to be not too much, not too little, but “just right” for Wall Street which will welcome yet another cash infusion into the U.S. economy.
Though, President Biden’s $579 infrastructure plan announced Thursday isn’t quite what Dems wanted, it’s enough to cheer the market on with $109 billion being set aside for “traditional infrastructure” — things like bridges and roads.
$49 billion is earmarked for public transit
$66 billion for Amtrak along with commuter and freight railways
$25 billion for airports
$55 billion for water infrastructure
$73 billion for power infrastructure, including grid authority
$65 billion for broadband infrastructure
$21 billion for “environmental remediation
$7.5 billion for EV infrastructure
$7.5 billion for Electric buses and transit
The plan failed to deliver on the social programs and climate change initiatives that many on the left had hoped to see causing Rep. Alexandra Ocasio-Cortez (D-NY) to complain that the program was not “inclusive” and failed minorities and women. The original Biden proposal included $400 billion for elderly care and $225 billion to help low income families with child care, as well as a $225 billion family and medical leave program, free universal pre-school and free community college.
Nonetheless, $7.5 billion for EV infrastructure will certainly help put more charging stations throughout the country (500,000 of them, according to the White House) thereby enabling consumers to choose to go electric, should they so desire.
The White House intends to finance its plan through tougher IRS tax collection and selling oil from the Strategic Petroleum Reserve (which will, in turn drive oil higher…lending more support to my expectation of $75-$100 oil being here to stay.)
The 18.4 cents per gallon federal gas tax which would have been disastrous for the economy and hurt the middle class significantly did’t make it through but, Biden’s attempts to raise taxes on corporation and higher earners are still being discussed.
Ultimately, America will need to find the money to pay for all this.
U.S. stock futures were up in premarket trading.
- S&P 500 futures: 4,260.25, +0.10%
- Nasdaq futures: 14,379.25, +0.17%
- DOW futures: 34,181.00, +0.29%
U.S. Dollar and Treasuries
10-year Treasury yields were unchanged. The dollar dropped against a basket of other currencies.
- U.S. Dollar Index (DXY): 91.76, -0.06%
- 10-year Treasury yield: 1.487%
- 2-year Treasury yield: 0.260%
Stocks To Watch
Nike’s stock soared as the company reported that its revenue in the first quarter of 2021 rose 96% from the previous quarter. The company’s digital sales boomed, as more people are buying sportswear.
Shares of a cannabidiol products manufacturer Grove Inc soared 25% in premarket trading, after a successful IPO. The company’s offering priced 2.2 million shares at $5 per share.
A Chinese chemical manufacturing company Fuwei Films reported excellent first-quarter earnings results. The company’s gross profit margins were at 41.8% from 35.8% in the previous quarter. Net sales were up 22.1%. The stock soared in premarket trading. The company specializes in manufacturing high-quality film that is used in printed circuit boards.
- NKE Nike Inc $151.25, +13.21%, 455.10K (volume)
- FFHL Fuwei Films Holding $14.240, +59.82%, 507.24K (volume)
- GRVI Grove Inc $7.09 +26.61%, 1.38M (volume)
Commodities To Watch
Oil lost some of its gains ahead of the OPEC+ meeting. Oil producers are likely to discuss supply hikes. Gold strengthened.
- WTI crude: $73.08, -0.30%
- Brent crude: $75.34, -0.29%
- Gold: $1,782.60, +0.33%
The global crypto market cap decreased by -1.60% in the last 24 hours.
- BTC: $33,404.24, -0.53%
- ETH: $1,885.31, -2.78%
- DOGE: $0.2497, +5.37%