As the US presidential election approaches, the market's response to the "Trump Trade" and "Harris Trade" becomes increasingly apparent, with the "win-win" sector where the trades overlap worth paying attention to.

Institutional analysis states that the "Bipartisan Infrastructure Bill" was passed as early as 2021, but only 17% of the $1.2 trillion budget has been utilized, with the remaining unused funds to be re-legislated by the new administration.

In the scenario of a "Republican sweep", Trump may continue to push for infrastructure development, especially in roads, bridges, and emerging technology areas, although specific investment plans have not been disclosed. In the event of a "Democratic sweep", Harris may continue to advance the "Bipartisan Infrastructure Bill", although she has not revealed specific infrastructure investment details.

In addition, the post-disaster reconstruction demand brought by Hurricanes Helen and Milton also provides additional growth momentum for the infrastructure sector.

Against this backdrop, the performance of the US Infrastructure Stocks Index (Indxx U.S. Infrastructure Development Index) has been strong throughout the year, with the ETF tracking this index showing a remarkable performance, with a 21.91% increase year-to-date and reaching a historical high on October 15th. $Global X Funds Global X U.S. Infrastructure Development Etf (PAVE.US)$ Infrastructure-related stocks have shown strong performance, such as

$United Rentals (URI.US)$ The company, whose stock price has risen by over 40% this year and over 80% in the past year.

Other infrastructure stocks with outstanding performance include $Trane Technologies (TT.US)$ bonds. $Eaton (ETN.US)$Please use your Futubull account to access the feature.$Parker Hannifin (PH.US)$Please use your Futubull account to access the feature.$Lowe's Companies (LOW.US)$Please use your Futubull account to access the feature.$Lennar Corp (LEN.US)$Please use your Futubull account to access the feature.$D.R. Horton (DHI.US)$Please use your Futubull account to access the feature.$Home Depot (HD.US)$These companies all have a market cap exceeding $50 billion and rank in the top 8 in terms of year-to-date gains.

"Trump Trade" and "Harris Trade" making a comeback, is the U.S. stock infrastructure sector the biggest winner?

With the presidential election day on November 5th approaching, the "Trump Trade" and "Harris Trade" are resurging in the U.S. stock market.

The so-called "Trump Trade" and "Harris Trade" refer to investors making investments based on the current chances of presidential candidates winning and the different economic policies and political actions they may implement if elected.

For example, on July 15th this year, after a historic shooting incident involving Trump, the "Trump Trade" swept the market. U.S. Treasury yield curve steepened, Bitcoin surged, U.S. stocks rose, with banks, healthcare, and oil industry stocks as potential beneficiaries, closing up by 31.37% that day. $Trump Media & Technology (DJT.US)$ For example, on September 10th this year, Trump and Harris had their first televised debate, with general opinion leaning towards Harris having the upper hand. The "Harris Trade" trended upwards, and on that day, stocks representing the "Harris concept" such as photovoltaics and new energy showed strength throughout the day.

For example, on September 10th this year, Trump and Harris had their first televised debate, with general opinion leaning towards Harris having the upper hand. The "Harris Trade" trended upwards, and on that day, stocks representing the "Harris concept" such as photovoltaics and new energy showed strength throughout the day.

Whether it's the "Trump trade" or the "Harris trade", the essence is the market's forward-looking response to the potential economic impact of their future governance policies, which are inseparable from their policy agenda.

Although the presidential candidates of both parties have policy differences, many investors analyze the 'Harris Trade' as a reverse version of the 'Trump Trade,' yet there are still some policy consensus between the parties, such as infrastructure development.

In November 2021, the United States passed the "Bipartisan Infrastructure Law," with an expected investment of $1.2 trillion in American infrastructure, including traditional, public transportation, and new energy infrastructure.

The current "Bipartisan Infrastructure Law" authorizes spending from the fiscal year 2022 to 2026. Any remaining unused funds by then will be subject to new legislation by the incoming government. However, federal spending has been slow. As of April this year, less than 17% of the $1.2 trillion from this law has been utilized, indicating significant room for future developments.

China International Capital Corporation analysis suggests that supporting infrastructure investment is a bipartisan consensus with a high likelihood of implementation.

In the scenario of a "Republican full victory" (i.e., President: Trump; House of Representatives: Republican; Senate: Republican), or an increase in investment in the infrastructure sector, unused funds from the "Inflation Reduction Act" and "Bipartisan Infrastructure Law" could be reallocated to areas such as "roads, bridges, dams," and even previous laws could be reduced or repealed.

In Trump's policy proposals, he also supports infrastructure development, and may still focus on the infrastructure of roads, bridges, ports, and emerging technologies, but has not yet disclosed a clear investment plan. Trump made many proposals for infrastructure development during his term, but did not reach an agreement with the Democratic Party in Congress.

However, in the scenario of 'Democratic Party Victory' (President: Harris; House of Representatives: Democratic Party; Senate: Democratic Party) and other presidential-congressional opposition, the infrastructure bill may continue the progress of the 'Two-Party Infrastructure Act'.

Although Harris has not disclosed details regarding infrastructure facilities, the Democratic Party manifesto mentions continuing to promote the 'Two-Party Infrastructure Act.' The three major bills signed by Biden during his term have significantly boosted fixed investment, leading to over $900 billion in manufacturing and related field investments, with significant growth in manufacturing construction investment mainly in manufacturing-related building expenditures.

Post-disaster reconstruction demands have surged, with Morgan Stanley stating that the infrastructure sector is 'very strong.'

Of course, the infrastructure construction sector will not only benefit from sustainable and future incremental policies, but also from post-disaster reconstruction demands caused by hurricanes.

On Wednesday evening, October 9th Eastern Time, this year's fifth hurricane in the United States, Hurricane Milton, landed near Siesta Key on the west coast of Florida with a category 3 storm strength and sustained wind speeds of around 193 kilometers per hour, devastating Central Florida with millions of users losing power, houses destroyed, and lethal tornadoes, shortly after Hurricane Helene hit the coast of Florida less than two weeks ago.

The affected areas include approximately 196 counties along the hurricane's path in Florida, Georgia, Alabama, South Carolina, North Carolina, Virginia, and Tennessee.

Morgan Stanley Asset Management's Senior Portfolio Manager Andrew Slimmon stated on October 2nd during a CNBC program that the government's increased infrastructure spending and the rebuilding demand caused by Hurricane Helene are reasons he is bullish on this sector, as the U.S. infrastructure sector is 'very strong'.

Slimmon believes, "State governments have a large amount of infrastructure spending. In addition, some regions of the United States—including the western part of North Carolina, Georgia, and the eastern part of Texas, an area as large as Massachusetts, have been devastated, and they will have to rebuild roads and bridges."

Slimmon's observation has been confirmed. On October 9th, the North Carolina legislature passed the Disaster Recovery Act of 2024 (HB 149), allocating $0.273 billion for initial disaster relief and establishing the Hurricane Helene Disaster Recovery Fund to support rescue and recovery efforts in affected areas, including infrastructure repairs, education, public health, and other support.

The fund will support disaster recovery efforts in 25 counties in North Carolina and Nash County, which were declared major disaster areas by the U.S. President on September 28, 2024, indicating a significant demand for infrastructure construction.

Editor/Rocky