Weekly report: stocks continue to rise as new opportunities open up in infrastructure and time enters the metaworld
Financial markets continue to rise
The Bears continue to look for signs that the stock market will make a significant correction. They see vacancies, inflation, stimulus programs and roaring supply chains. However, the stock market has been steadily moving up, reaching new highs along the way.
Can all Chicken Littles be wrong? Let’s see what drives the markets.
Improving the labor market
The U.S. Department of Labor last week reported a 268,000 drop in unemployment. This was the seventh decline in a row.
In addition, ongoing claims for unemployment insurance fell to 2.08 million. This is the lowest figure since March 2020, when COVID began to influence the labor market.
Large retailers exceeded earnings expectations in the third quarter and continue to thrive in the fourth.
In October, sales increased by 16.3 percent over the same period last year. It is noteworthy that this was the third increase in a month. In addition, it is 21.4 percent higher than the cost before the pandemic.
Stores like Macy’s, Kohl’s, Walmart and others are exceeding expectations.
“It’s more important to look at what consumers are doing than what they’re saying,” Gus Faucher, chief economist at PNC Financial, told Reuters. “They are concerned about rising inflation, but they are still in good shape and continue to spend.”
According to the Bureau of Economic Analysis, the US economy recovered this year at the fastest pace in history – 33.8 percent. This is an eye-catching figure.
Looking ahead, most economists see growth of about five percent in the fourth quarter. After that, the only consensus is that next year growth will level off and set at a more moderate pace.
Can markets continue to rise
Analysts are divided over the future of stock prices. Some consider the market overvalued. Others say good times will continue until central banks get in the way.
“What we’re seeing is more than 60 days of record highs in 2021,” Kathleen Brooks, founder of Minerva Analysis, told Capital.com. “So it’s not a rare feature, but of course everything has to disappear.
“We now have a weak monetary policy, but until the central banks stop the brakes, we will not see a significant rollback. In the spring, if we can see some weakness, impetus – as it is, we will see some setback.
Profit from infrastructure and build better
A massive wave of government spending is about to hit the U.S. economy, and Congress is considering passing additional laws that would nearly double that amount. All this money opens the door to investment opportunities.
Earlier this month, a $ 1.2 trillion bill on President Joe Biden’s infrastructure plan was signed. In addition, last week the United States House of Representatives passed its 2.2 trillion Build Back Better plan. It will be considered in the Senate after its re-convocation on Monday.
What is in the Infrastructure Act
Measures in the Law on Investment in Infrastructure and Workplaces include:
- $ 110 billion on roads and bridges
- $ 39 billion to upgrade public transportation
- $ 66 billion for Amtrak / Railways
- $ 65 billion to upgrade the power grid
- $ 65 billion to expand and improve broadband
- $ 55 billion for clean drinking water
- $ 71 billion on climate resilience and environmental recovery
- $ 25 billion to repair the airport
- $ 11 billion on transport safety
- $ 7.5 billion for charging stations for EVs
- $ 7.5 billion for school buses
“This bipartisan infrastructure agreement will rebuild American roads, bridges and rails,” the White House said in a statement. who are too often left behind ”.
Popular even among opponents
The new law is so popular that even lawmakers who voted against have tried to attribute its success.
Member of the House of Representatives Gary Palmer (R-AL) said the passage of the law would provide funding for 56 miles of highway in Birmingham, which was one of his “top priorities”.
The only problem was that Palmer voted against the bill. As a result, he was killed by both commentators and comedians.
Build better legislation
The Senate is expected to change parts of the Build Back Better plan that passed the House of Representatives. If this happens, the measure will be returned to the House for another vote.
As a result, the details of the measure may change. Thus, the money allocated for this bill may change. For example, the original measure involved spending of $ 3.5 trillion, but was reduced to $ 2.2 trillion.
As a rule, Build Back Better would expand health care, improve the country’s social protection network and fight climate change.
Where to put the money
Many investments will benefit from the Infrastructure Act and the Build Back Better. However, as the details of Build Back Better may change, we will focus on infrastructure investments.
Some funds that may benefit from the Infrastructure Investment and Jobs Act include:
iShares US Infrastructure ETF (IFRA) has aroused interest. It seeks to invest in companies dealing with internal infrastructure. These companies include utilities, railways, materials manufacturers and construction firms.
Global X US Infrastructure Development ETF (PAVE) is focused on the US market. It is also the largest infrastructure ETF. Its holdings focus on companies engaged in construction, raw materials and industrial transport.
FlexShares Stoxx Global Broad Infrastructure Index Fund (NFRA) invests in US emerging markets and infrastructure. Much of this investment is in communication. As a result, it could profit mainly from expanding broadband access.
Immersion in the metaworld
Time magazine is immersed in the metaworld. In addition, it funds its new businesses with digital Ether tokens.
The 98-year-old edition has partnered with Galaxy Digital, a 15-year cryptocurrency investment company, to initiate two new proposals for the metaverse.
Time has launched a newsletter called In the metaworld last week. The work is produced by full-time writer Andrew Chow.
The newsletter will explore how our physical and digital selves are becoming more blurred, Time said, highlighting communities that are emerging rapidly in the new digital environment, and talk to leaders who are at the forefront of business, innovation and culture. within the metaworld. ”
In addition, it will publish a list of Time 100 Companies from leading companies related to the metaverse.
The metaworld is an exciting virtual world. It has become the subject of increased interest from various businesses. Facebook has even changed its name to Meta Platforms.
Morgan Stanley Investment Bank sees many investment opportunities in the metaverse.
“In our view, virtual reality (VR) and augmented reality (AR) technology is likely to benefit from accelerating investment in the coming years,” Morgan Stanley said in a recent report. “It’s important that VR / AR technology is already improving, and it can encourage more mixing of the digital and physical worlds.
Large technology companies are investing more and more money in the metauniverse, Morgan notes.
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Max K. Erkiletyan started writing for newspapers in high school. He later became an award-winning journalist and co-founder of Free Bird magazine.
He has written for a wide range of regional and national publications, as well as for many online publications. This gave him the opportunity to interview a variety of famous figures, from former Federal Reserve Chairman Paul Walker to blues musicians Maddie Waters and Bee King.
Max lives in Springfield, Missouri, with his wife Karen and two cats. Spend as much time as possible with your children, grandchildren, great-grandchildren.