Analysis: Infrastructure bill could fuel stocks, but investors temper enthusiasm

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A U.S. government plan to upgrade the nation's infrastructure could further fuel the stock market's rally, but skepticism about a massive spending ...

A U.S. government plan to upgrade the nation's infrastructure could further fuel the stock market's rally, but skepticism about a massive spending package navigating political obstacles and the speed of any benefits filtering into the economy stand to temper any enthusiasm.

But investors say political obstacles exist to passing a bill - particularly if it includes tax increases to fund it - while they expect spending on projects could take years in some cases. The White House is seeking to advance its agenda on the heels of pushing through a US$1.9 trillion coronavirus relief bill, which has helped give the latest boost to a stock market that has surged about 74per cent since the throes of the pandemic in March 2020.

Key will be whether the package is linked to tax increases, such as lifting the levy that companies pay, which also could dampen investor excitement for the spending package.

 

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