Market Overview

Trump's Infrastructure Plan: What You Should Know

Trump's Infrastructure Plan: What You Should Know

President Donald Trump unveiled a much-anticipated, $1.5-trillion infrastructure plan intended to “address unmet rural infrastructure needs, empower state and local authorities and train the American workforce of the future," according to the White House. 

The Plan

The infrastructure plan aims to address traditional infrastructure such as roads, bridges and airports, as well as water resources, rural infrastructure and energy in order to promote economic growth.

“The reforms set out by my plan will strengthen the economy, make our country more competitive, reduce the costs of goods and services for American families, and enable Americans to build their lives on top of the best infrastructure in the world," Trump said in the announcement.

One aspect of the plan is an "infrastructure incentives program" designed to “encourage increased state, local and private investment in infrastructure.”

The administration plans to commit $100 billion to the program, aiming to stimulate spending at the state and local level. States and counties with infrastructure spending plans would be eligible to apply and receive partial funding through the program.

Some are concerned that this will shift a heavy portion of the financial burden to state and local governments.

What Analysts Are Saying

Analysts at Height Securities were skeptical about the passing of the plan in its current form, maintaining 15-percent odds that Congress would OK infrastructure legislation.

“The $200 billion in federal spending is expected to be offset by equal cuts to non-defense discretionary spending — a non-starter with most if not all Democrats," Height Securities said. 

Iinfrastructure legislation will require 60 Senate votes to pass, while Republicans hold 51 seats, leading Height analysts to be “highly skeptical” that the plan will garner the necessary support to pass.

Stocks To Watch For 

While it remains unclear whether new infrastructure legislation will be passed, investors should keep an eye out for stocks that could stand to benefit from an infrastructure package. 

  • The Global X U.S. Infrastructure Development ETF (CBOE: PAVE), which is made up of 89 U.S. stocks, has already experienced upside from infrastructure projects in New York, California and Charlotte, North Carolina. 
  • Steel producer Nucor (NYSE: NUE) could benefit from the bridge and railroad efforts outlined in the plan.
  • Caterpillar (NYSE: CAT) is a leader in construction machinery and offers a diverse portfolio of products that could be used in infrastructure and construction efforts.

Related Links:

These 3 Companies Are Positioned To Benefit From The Federal Infrastructure Plan

A Concrete Play On Trump's Infrastructure Plan With This ETF

Posted-In: Donald Trump Height Securities infrastructurePolitics Top Stories Economics General Best of Benzinga


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