$1T Infrastructure bill passes — sending infrastructure-related and electric vehicles stocks up

The ~$1T infrastructure package finally passed Congress and is on its way to Biden for signing.

What’s the big deal? The bill is much smaller compared to the initial $2.2T amount proposed by Biden and is expected to have a small, positive impact on growth — according to economists.

• The bill will include $110B for roads and bridges, $65B for broadband (improving nationwide access to the internet), $65B for power and water systems, and more.
• The funding would be spread over years — improving mobility and transportation, and leading to higher productivity in the long run.

Right time, right place: The Global X US Infrastructure Development ETF (PAVE) is up 38.5% in 2021 — rising 1.5% yesterday on the news.

The industrial sector was also one of the top-performing sectors during the last period of fed tapering in 2013. And just last week, the Fed announced the start of tapering (ELI5: What is tapering and why it matters?).

But the bigger move was in the EV industry — notably EV charging stocks, seen as the missing key to EV adoption.

• ChargePoint Holdings (NYSE:CHPT) — jumped 12%.
• Blink Charging (NASDAQ:BLNK) — jumped 25%.

While only $7.5B is committed towards charging stations, a small portion of the total ~$1T, this is more than the total amount committed by the US government in recent years. And here’s what could give the sector an even bigger push…

Next up: Biden is trying to pass a separate $2T bill for climate change initiatives and healthcare:

• The bill is being opposed by the Republicans and will have more difficulty moving through the White House.
• The $2T bill was already reduced from the proposed $3.5T — and will likely be negotiated down.