Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Will the ASX share market get a boost from Biden’s economic plan?

President elect Joe Biden has revealed a US$1.9 trillion healthcare and economic plan to try to help the Unites States of America.

President elect Joe Biden has revealed a US$1.9 trillion healthcare and economic plan to try to help the Unites States of America.

What are some of the highlights from the plan?

The $600 stimulus cheques that were in the first package that congress agreed will be increased to US$2,000 per person. Not only is the payment going to be increased but it will be available to more households which were originally excluded. Adult children, and households where families have one immigrant parent, will also get the payment. This apparently means that at least 10 million more people will get the payments.

Tax credits will also be extended for children and lower income workers.

There are other measures including 14 weeks of paid sick and family medical leave for millions of employees. Grants will be provided to over 1 million small businesses. There will also be low interest loans made available, particularly for clean energy investments.

There’s also more funding for things like food stamps, food and water assistance and funding for US territories like Puerto Rico.

He also plans to step up the rollout of the COVID-19 vaccines.

What could this mean for ASX shares?

As a whole, there aren’t too many ASX shares that have a big involvement in the US. However, ASX shares do take on market movements from the US – so market sentiments there can affect things here. Increased stimulus is one of the main reasons why the US share market has done ever since investors learned that Joe Biden won the election.

To a lesser extent, I think we could see an increase in the profit of mostly discretionary businesses in the US, like we’ve seen in Australia with companies like JB Hi-Fi Limited (ASX: JBH), Adairs Ltd (ASX: ADH) and Nick Scali Limited (ASX: NCK).

There are a few smaller businesses on the ASX that give exposure to that sort of US retail theme like City Chic Collective Ltd (ASX: CCX), Lovisa Holdings Ltd (ASX: LOV) and A2 Milk Company Ltd (ASX: A2M).

Businesses that operate in the US which could benefit from an improving vaccine rollout include CSL Limited (ASX: CSL), Audinate Group Ltd (ASX: AD8), Aristocrat Leisure Limited (ASX: ALL), Brickworks Limited (ASX: BKW), James Hardie Industries plc (ASX: JHX) to name just a handful.

‘Green’ investments could also benefit from the Biden Administration, which may be why the Australian Ethical Investment Limited (ASX: AEF) share price has jumped in response.

Summary thoughts

Most of the time politics doesn’t have much of an effect on profit or share prices. But considering the US is dealing with a big pandemic and a lot of economic pain for certain segments of the country, Biden’s plan could give some ASX shares a material boost.

Of the ones I’ve named in the article, I think I’d be most inclined to buy City Chic because it’s already a business on my watchlist. Though Audinate and Brickworks are other ASX shares that could do well from an improvement in the COVID-19 situation.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
Skip to content