The Ideal Environment to Ramp Up Infrastructure
One of the primary reasons the market is rallying is because the Trump administration is going to unveil a massive multi-trillion-dollar infrastructure program in the coming months.
Markets are forward looking. As such, they rarely care about economic data or other items revealing what has already happened. Rather, the markets look towards what is coming down the pike.
And the Trump administration just told them:
To speed up construction projects, Trump plans to overhaul one of the nation’s most consequential environmental laws… would make it easier to build highways, pipelines, chemical plants and other projects that pose environmental risks… it would force agencies to complete even the most exhaustive environmental reviews within two years and restrict the extent to which they could consider a project’s full climate impact… [Emphasis my own.]
Source: The Washington Post
The nation’s crumbling infrastructure has been a pet peeve for the president for years. And the current environment has given him the perfect opportunity to unveil a massive multi-trillion-dollar program.
Consider the following. A year ago…
- The economy was already growing at or around 3%. Today, it’s in a steep recession.
- Interest rates were around 2.5%. Today, they’re at ZERO, meaning credit is effectively free for large-scale programs.
- There was still resistance to the Trump administration’s goal of decoupling the US economy from China. Today, the fallout from the COVID-19 pandemic has aligned the majority of Americans with this goal.
In short, the current environment is ideal for the Trump administration to begin pushing to improve both the nation’s infrastructure and its manufacturing/industrial base.
President Trump had already declared the domestic production of certain minerals and resources a matter of national security via the Defense Production Act of 1950.
He’s now going to do away with excessive environment regulations to open the door to a massive overhaul of our domestic infrastructure, and a manufacturing/industrial renaissance as multinational corporations relocate their production centers from China back to the US.
This process will take time. But look for infrastructure plays in sectors like steel, concrete, and others to catch a bid as we get closer to the election.
In fact, I recently alerted subscribers of my Strategic Impact newsletter to several infrastructure plays. And they’re already showing strength.
As we get closer to the election in November, we’ll be adding to this investment theme in the pages of Strategic Impact.
Trump is Still in the Driving Seat
Despite accusations of him being controlled by Russia…
Despite the fact they tried to impeach him…
And despite the fact they’re trying to pin the pandemic on him…
Trump is STILL on track to claim victory…
And when he does it could send certain sectors soaring.
Editor, Money & Crisis