3 Items On The Congressional Agenda In March That Investors Should Watch

Congress could potentially debate three bills in March that could impact financial markets. The fate of each bill could move stock prices, Height Securities analyst Stefanie Miller said in a Monday note. 

Banking Deregulation

The first piece of legislation up for debate is the banking deregulation bill, which could potentially raise the asset threshold for systematically important financial institutions from $50 billion to $250 billion.

“This change will reduce regulatory and compliance costs for regional banks,” Miller said.

She named the following stocks as the biggest potential winners from the new threshold:

  • SunTrust Banks, Inc. STI
  • American Express Company AXP
  • Ally Financial Inc ALLY
  • Citizens Financial Group Inc CFG
  • Fifth Third Bancorp FITB
  • Regions Financial Corp RF
  • Zions Bankcorp ZION
  • Comerica Incorporated CMA

FAA Reauthorization

The second political issue on the table in March is the Federal Aviation Administration reauthorization bill. A straight reauthorization would hurt regional airlines by reducing the number of qualified pilots, Miller said. In addition, an amendment to Section 336 of the FAA Modernization and Reform Act of 2012 could restrict recreational drones, which would be bad news for drone stocks Ambarella Inc AMBA and GoPro Inc GPRO.

Government Spending Bill

Finally, Congress will be continuing its debate over the fiscal 2018 spending bill, which has already caused two government shutdowns this year. The final version of the bill still likely won’t fix concerns over the Deferred Action for Childhood Arrivals program, Miller said. 

Congress could potentially attach any number of pieces of legislation to this necessary bill, she said. 

“As an example, the latest short-term spending bill carried two unrelated tax provisions that got dropped at the last minute from the tax overhaul legislation, which Congress passed in December." 

After a shaky start to February, the U.S. stock market seems to have stabilized, suggesting investors aren’t too concerned about how things will play out in Washington in coming weeks. The SPDR S&P 500 ETF Trust SPY is now up 3.7 percent year-to-date.

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