Infrastructure Stocks Slump as Stimulus Not Seen Until 2018By
Trump expected to focus on healthcare, tax reform first
Basket of infrastructure stocks drop as much as 5 percent
Investors who bet Donald Trump would quickly make good on his pledge to fix the nation’s highways and bridges are being taken for a road-trip in financial markets.
A basket of infrastructure-linked stocks is having its worst day since the end of June amid speculation a jam-packed political calendar will delay any stimulus program until 2018. Lawmakers are prioritizing other issues such as tax reform and the repeal and replacement of the Affordable Care Act, the news website Axios reported Thursday, citing unnamed Republican Party sources.
Trump promised that the government would rebuild the nation’s infrastructure to make it "second to none" during his presidential-victory speech on Nov. 9.
The market took him at his word. A price-weighted basket of stocks linked to infrastructure development compiled by Bespoke Investment Group proceeded to vastly outperform the S&P 500 index -- but all that has been erased over the past month.
This group of stocks is comprised of AECOM, Chicago Bridge & Iron Co., Fluor Corp., Jacobs Engineering Group Inc., Martin Marietta Materials Inc., Vulcan Materials Co. and U.S. Steel Corp.
The price-weighted basket was down almost 5 percent at its lows of the day.