Joe Biden’s program and plans as the 46th President of the United States include large-scale payments to the public and assistance to enterprises during the pandemic, as well as investments in infrastructure and green energy, all of which will be reflected in specific promotions.
The US stock market demonstrates investor optimism with the coming of Joe Biden to the presidency, while, following the election, Democrats get the majority of power in Congress, given Vice President Kamala Harris’ authority to give decisive votes in the Senate. A number of plans of Biden’s team have already been announced and their implementation should begin soon.
Among the expected steps of the new government: the allocation of $ 1.9 trillion. populations, businesses and states for a range of tasks to restore economic growth and defeat the COVID-19 pandemic. Biden also offered a federal minimum wage of $ 15 an hour, more than double the current $ 7.25.
The measures should stimulate the largest component in the US economy – consumer spending, which fell 0.7% in December and 1.4% in November, according to a Commerce Department report.
Higher payouts amid the pandemic and high unemployment should be reflected in the earnings of e-commerce companies such as Amazon (AMZN), Walmart (WMT) and Target (TGT).
Sales of such large grocery chains and consumer goods companies as Kroger (KR), Conagra (CAG), Procter & Gamble (PG), Colgate-Palmolive (CL) and others will also grow.
Biden-appointed Treasury Secretary Janet Yellen, who is soon to be confirmed by the Senate, is urging lawmakers to “act big” on the pandemic relief program while keeping borrowing rates low.
The Fed is likely to continue to maintain interest rates near record lows, laying the groundwork for a favorable housing market in 2021.
Stronger housing demand and rising disposable income will be good news for companies like Toll Brothers (TOL) and DR Horton (DHI), as well as for construction companies like Masco Corp. (MAS), Sherwin Williams (SHW), Ethan Allen (ETH) and of course Home Depot (HD).
On Thursday, President Joe Biden signed 10 decrees to tackle the US COVID-19 pandemic, which are aimed at prioritizing the production of personal protective equipment and required medical equipment, increasing the number of employees in clinics and sites for testing and vaccinations.
Biden plans to accelerate vaccinations of 100 million Americans in the next 100 days, as well as a new drug development program.
Jeff Zientes, Biden’s team coordinator who is working on the pandemic, noted that the country lacks the infrastructure to vaccinate as many of the US population as possible.
All of these plans will require government funding and, if approved, should spur business growth for companies such as medical device and reagent manufacturer Becton Dickinson (BDX). Efforts to expand overall health coverage should benefit companies like UnitedHealth (UNH).
Early on in his campaign, Biden outlined plans for “modern, sustainable infrastructure” and clean energy, which is not surprising given the American Association of Civil Engineers’ D + ratings for US infrastructure.
The allocation of funds for the construction, repair and reconstruction of roads, bridges, tunnels, ports and airports will help increase revenues and profits for companies such as Caterpillar (CAT), Granite Construction (GVA) and US Concrete USC.
Demand may rise in solar, wind and alternative energy, which will affect companies such as Blink Charging (BLNK), First Solar (FSLR) and Sunrun (RUN).
Electric vehicle makers such as Tesla (TSLA), General Motors (GM), Ford (F), Honda (HMC) and others are also expecting new incentives to boost demand in the US.
Cannabis growers have optimistic expectations, given that a democratic government is committed to legalizing medical cannabis at the federal level. The ultimate victory will be the access of cannabis growers to traditional banking and other financial instruments that are holding the industry in place today.
In the case of reforms in this area, a “boom in demand” can expect both cannabis producers: Canopy Growth (CGC), Tilray (TLRY), Aurora Cannabis (ACB), and companies dealing with infrastructure for this area: Scotts Miracle (SMG), as well as companies such as Altria (MO) and Vector Group (VGR).
The companies that plummeted on Biden’s inauguration day were defense equipment makers and companies that own and operate private prisons (CoreCivic, Geo Group) – sectors that thrived under Donald Trump.