This week on the Investing with IBD podcast, Pedro Palandrani from Global X ETFs joins the show. Palandrani is a research analyst and he discusses how the infrastructure bill is setting up possibilities for moves in a variety of industries. Not only does Palandrani cover the industries but also some of the specific stocks that are leaders in their fields.
Audio Version Of Podcast Episode
Video Version Of Podcast Episode
Over A Trillion Up For Grabs From Infrastructure Bill
Between the infrastructure bill and reconciliation, trillions of dollars are in the mix for infrastructure. Roads, rails, and bridges may get a lot of attention but that's not all. Clean energy, power grids, charging stations for electric vehicles, and a lot more are also areas of interest.
The Global X U.S. Infrastructure Development ETF (PAVE) offers exposure to a broad swath of industries such as transportation, construction, materials, and machinery. The U.S. focus of PAVE sets this ETF to benefit from the infrastructure bill.
Like many of its constituents, PAVE formed a cup with handle. While that's not necessary to have a pattern for ETF investing, the same psychology can often work. Especially when focused on sectors and industries of the market.
Palandrani noted that Jacobs Engineering (J) is one of the stocks looking interesting.
According to a recent earnings call, 95% of their business covers areas in the infrastructure bill. Additionally, Palandrani shared that 75% of Jacobs Engineering stock's revenue comes from the U.S. and 30% specifically from government spending.
Battery Technology And The Electric Vehicles Gold Rush
The 1849 gold rush offered few people chances to strike it rich with gold claims. Many more people found their riches by selling the picks and shovels. Palandrani looks at battery technology plays covered in the Global X Lithium Battery Tech ETF (LIT) as the "picks and shovels" play in the electric vehicle gold rush.
With big commitments from auto manufactures like Volkswagen (VWAGY), Ford (F), General Motors (GM) and more, it's worth looking at the whole supply chain of delivering that power. There are the battery technology manufactures as well as the lithium miners. Five companies supply 75% of the world's lithium and there's a projected eightfold increase in demand over the next 10 years.
Additionally Livent stock focuses on lithium hydroxide which is the material for next-generation battery technology. It decomposes at lower energy for longer lasting batteries and more range for electric vehicles.
Want more automotive industry news? Check out our automotive industry page. It covers self-driving cars, electric vehicles and battery technology.
Lithium Americas (LAC) is also an important stock to watch, according to Palandrani. The U.S. has only 1% of the lithium mining pie and LAC stock is developing the largest resources domestically.
A final thought. There is a lot of Chinese exposure among the components of the Global X Lithium Battery ETF. China can't be ignored. It has the bulk of market share in the battery technology, upward of 77%.
Some Chinese stocks, like BYD Co (BYDDF), do trade on domestic exchanges. Many don't.
An ETF can be a good way to get that foreign exposure. In this case, through the U.S.-listed ETF rather than individual stocks on foreign exchanges.
Market Analysis: A Timely Podcast Last Week
The nervousness of our last podcast turned by the end of the week. The Nasdaq composite bounced at its 50-day moving average line. The Russell 2000 bounced near its 200-day line.
More importantly, the early entry topic of the prior week could immediately be applied. Last week, many stocks broke above downtrends and early lines of resistance.
Stocks To Revisit: Academy Sports Stock And Nvidia Stock
Academy Sports & Outdoor (ASO) did as we hoped crossing above its downtrend line, an early area of resistance around 38 and its 50-day moving average line.
The early entry resulted in a 10% gain in just a few days. It looks like ASO stock could pause here at the old highs around 42.75.
As an example of things not lining up exactly right, Builders FirstSource (BLDR) had the price action we were looking for but not the volume.
With summer months, volume can be lacking. Sometimes volume around the entry can be good enough. What allows you to forgive elements less than ideal? The quality of the stock and your conviction in the story.
Finally, we revisited Nvidia (NVDA). After its earnings report, Nvidia stock broke above a downtrend in a handle. That offered an earlier entry than the 207.43 high of the handle.
With a relative strength line at new highs, it continues to be a market leader. When buying opportunities present themselves in market leaders, you want to be ready.
Want More? Use IBD Tools To Help Find The Next Nvidia Stock
For individual stock ideas, it's always a good idea to check IBD's Stock Lists page, especially the IBD 50 and IBD Big Cap 20, which both list Nvidia stock among their members. The IBD Breakout Stocks Index also provides a list of stocks worth tracking and both Nvidia stock and BLDR stock are on that list. is also IBD Big Cap 20.
The IBD Sector Leaders is also worth watching. It's a select group with stringent criteria and Nvidia stock continues to earn a spot on the list.
And, of course, there are numerous articles on the best stocks to buy right now, updated regularly on investors.com for more investing ideas.
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