Investors may want to use the pullback in infrastructure stocks as opportunity.
Over the last few weeks, several, including Vulcan Materials (VMC), Global X U.S. Infrastructure (PAVE), Nucor (NUE), Freeport McMoRan (FCX), Jacobs Engineering (J), United Rentals Inc. (URI), Caterpillar (CAT), and Marin Marietta Materials (MLM) have pulled back.
However, all have room to run as we near potential passage of a bill.
At the moment, nine Democratic House moderates could withhold their support for budget resolution until Speaker Pelosi allows the House to first vote on the $1.2 trillion infrastructure plan, as noted by CNN. Perhaps this could push for a vote sooner than later.
As we noted on August 10, the Senate-passed bill includes:
- About $110 billion of the bill will be used for roads, bridges, and other projects.
- It will also set aside $66 billion to upgrade passenger and freight trains, and according to Newsweek, will help eliminate Amtrak’s maintenance backlog.
- The bill will also include $7.5 billion for EV charging stations.
- Another $55 billion will be used to improve water infrastructure, including the replacement of lead pipes.
- The bill will also include $17 billion for port infrastructure, and another $25 billion for airports, as also noted by Newsweek.
Again, we’d use any weakness in related stocks as opportunity.
After all, current infrastructure is in desperate need of repair.
In fact, according to Fortune:
The entire U.S. economy, all $20 trillion of it, relies heavily on our infrastructure in one way or another, through transportation, power grids, high-speed internet, ports, roads, and bridges. But much of this infrastructure hasn’t been updated in decades. The American Society of Civil Engineers (ASCE), which grades U.S. infrastructure each year, gave the country a C- in 2021.
There’s a water main break every two minutes, said the ASCE report, leading to losses of 6 billion gallons of treated water each day. Some 43% of our public roadways are in poor or mediocre condition. About 42% of all bridges in the country are at least 50 years old, and 7.5% are considered structurally deficient.”
We could easily go on…. Point is, we needed repairs yesterday.
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