1st Apr 2021. 10.55am
Market Alert: US Stimulus
Biden’s spending plans and the UK stocks that can benefit
“This is not a plan that tinkers around the edges…it’s a once in a generation investment in America.”
The words of US President Joe Biden, speaking from a training centre for carpenters in the industrial city of Pittsburgh yesterday.
Having already had a $1 trillion fiscal stimulus package approved in February, Mr Biden outlined his longer-term infrastructure-focused spending plans designed to re-shape the US economy.
The new package is said to include an additional $2 trillion in infrastructure investments and manufacturing subsidies, mostly funded by corporate tax rises.
A ‘tax and spend’ approach unsurprisingly has met swift opposition from Republicans and securing approval through congress will be far from straightforward.
However, should Biden manage to negotiate a compromise in the same way he did for the fiscal stimulus package, it could have a big impact on certain UK stocks which have exposure to the US infrastructure market.
Owner of Sunbelt – a US based construction and industrial equipment rental business with over 800 stores. The shares have formed a powerful long-term uptrend and have just broken out from a ‘consolidation box’ pattern.
CRH’s Americas Materials Division is the leading vertically integrated supplier of materials, paving and construction services across North America. The shares have recently pushed up into a key area of resistance. However, should prices break above this resistance, it would signal the start of a new trend leg higher.
Plumbing giant Ferguson is focused on the US and operates 1,442 branches serving all 50 states with approximately 27,000 associates. The shares are currently going through a prolonged period of sideways consolidation, but give the strength of the shares long-term uptrend, we’d expect this consolidation phase to resolve in higher prices.
AIM-listed Somero is a world leader in concrete screeding and it primary market is the US. The shares have formed a powerful long-term uptrend and are currently consolidating just below resistance at 395p.
This research is prepared for general information only and should not be construed as any form of investment advice.