The House approved the initiative to allocate up to $1 trillion in infrastructure works. The bill includes investments in roads, bridges and railroads.
This program favored the sector’s issuers such as Caterpillar, a manufacturer of construction machinery, whose shares gained 4.04 percent.
The papers of Quanta Services, which provides infrastructure services, rose 1.96%; SBA Communications, a provider of wireless services for infrastructure, gained 1.10%; Energy Transfer advanced 0.86% and the oil company ConocoPhillips, 0.64%, while American Tower and Union Pacific rose 0.33 and 0.21%, respectively.
The combined capitalization value of these companies reached $551.858 billion dollars, a gain of $6.733 billion dollars in one day, compared with $545.125 million last Friday.
Jannet Quiroz, deputy director of Economic Analysis at Monex, explained that ‘an increase in government spending, coupled with a stimulus to the construction sector, generates an expectation that the U.S. economy continues to improve, plus there is already talk of an expansion, since it has already left the crisis by the Covid-19 pandemic.
“We continue to be constructive on the issues of cities of the future and mobility of the future, as the overall fundamental backdrop remains strong. After months of intense negotiations and after quite a few failed attempts in previous years, the House of Representatives passed an infrastructure bill, now it is up to President Biden to sign it, which should happen shortly,” said Carsten Menke, head of Next Generation Research at Julius Baer.
In Mexico, gains for the industrial sector were led by Cementos Mexicanos (Cemex) with 10.20% increase and a gain in market value of $19,442 billion pesos, followed by Cementos Chihuahua, whose shares advanced 4.38% with a gain of $2,143 billion pesos in market cap.
“In the third quarter of the year, Cemex had a significant increase in revenues, driven mainly by the U.S. division, with an increase of 10.3%, as a result of infrastructure investments made in that country. The infrastructure plan could generate synergies for the coming years for Cemex,” said Brian Rodriguez, stock analyst at Monex, in a document.
On Wall Street, the main indexes rose. The Dow Jones Industrial Average gained 0.29% to 36,432.22 points, the S&P 500 advanced a slight 0.09%, stringing eight sessions up, which accumulates an increase of 3.25%, and the NASDAQ Composite just rose 0.07% to 15,982.36 points.
“It was a positive reaction to the expectation of higher construction spending that would generate more demand for raw materials. However, caution remained as we await the release of inflation data in the United States, which will be key to the monetary policy decisions of the Federal Reserve,” said Janneth Quiroz.
Within the S&P 500, the sector with the largest gains in the day was materials with 1.23%, followed by energy with 0.85% and technology with 0.58 percent. On the contrary, the utilities segment fell 1.45% and consumer discretionary and basic lost 1.38 and 0.94% respectively.
In Mexico, the Mexican Stock Exchange ended with a gain of 0.53% at 52,251.49 points, closing above the level of 52,000 points for the first time since October 26th. The Institutional Stock Exchange gained 0.39% to 1,076.96 points.
“The news is positive because with more construction, there will be more demand for inputs and services. But it lacks approval in the Upper House,” said Janneth Quiroz.