The stock market bounced back last week, with many equity indexes recouping what was lost the previous week when the Federal Reserve messaging left investors rattled. The S&P 500 (a proxy for US large cap stocks) advanced 2.8% for the week while the MSCI ACWI (a proxy for large and mid-cap global stocks) was up 2.3%.
Some of the good news driving markets came on Thursday as a bipartisan group of Senators agreed to a $579 billion dollar infrastructure deal. The proposed agreement has been negotiated for weeks with the White House and focuses on overhauling aging roads, bridges, and rails. In addition, there are allocations for electric vehicle and broadband infrastructure included, as well.
Whether the bill is passes is far from certain. Democrats also indicated that they will be seeking a “human infrastructure” measure through the budget reconciliation process and President Biden said that he will only sign the two bills in tandem. Democrats’ attempt to go it alone on that initiative has drawn criticism from Republican leadership and it has the potential to undermine the bipartisan work on the infrastructure bill. While only time will tell if the two sides can find common ground, investors this week seemed optimistic.
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Source: Morningstar, YCharts, and US Treasury as of June 26, 2021
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