(Barron’s) — President Biden announced Thursday that he has come to an agreement with a group of Republican Senators on an infrastructure package of roughly $600 billion.
“We’re in a race with China and the rest of the world for the 21st Century. They are not waiting,” Biden said in remarks he made Thursday afternoon.
Biden said the package addresses physical infrastructure, including upgrading the power grid, public transportation such as Amtrak, charging stations for electric vehicles, high-speed internet access in rural areas and replacing lead water pipes.
It totals $579 billion, of which $312 billion would be set aside for transportation, including roads and bridges.
Biden said the package was the result of give and take between the Democrats and Republicans. “Let me be clear, neither side got everything they wanted in this deal,” he said. “That’s what it means to compromise.”
He said it reflects “consensus” and a “true bipartisan effort.”
Other priorities that Biden had outlined, such as more spending on child-care initiatives, will have to be pursued in a separate package, presumably by using the budget reconciliation process in the Senate. With the Republicans and Democrats each controlling 50 seats in that chamber, Vice President Kamala Harris could break a tie, enabling the Democrats to pass legislation that comes under that process.
The infrastructure deal outlined by Biden still awaits approval by Congress.
Meanwhile, after lagging behind the broader market earlier in the session on Thursday, industrial stocks were rallying. That S&P 500 Industrial Sector was up about 0.8% around 3:30 p.m. Thursday, well ahead of the S&P 500.
Josh Duitz, who runs the $185 million Aberdeen Standard Global Infrastructure Income Fund (ASGI), told Barron’s that “It’s positive that they finally agree and are willing to spend on infrastructure and focus on pure infrastructure.”
One way to play it is the package’s emphasis on expanding broadband, he says, adding that it helps cell tower companies. As of May 31, the portfolio’s holdings included American Tower (AMT). Its shares were flat in trading Thursday.
Another potential beneficiary is utilities that are making headway with renewable energy, though Duitz said it’s early to handicap that sector given how more details of the package need to be released.
He added that Ferrovial (FER.Spain), a global infrastructure company that builds roads and other projects, would also benefit from the package. It’s another of his holdings.
“This is just one more positive catalyst for infrastructure,” Duitz said.
Elsewhere, engineering firm Aecom (ticker: ACM) was up more than 3% on Thursday to $63 and change, and MasTec (MTZ) was up nearly 4% to around $107. Caterpillar (CAT) gained more than 2%, while Deere (DE) rose 1%.
Article originally published by Barron’s.