A shortened week in the markets, due to Good Friday, still provided plenty of pertinent market information. Travel and Leisure companies continue to experience a sharp recovery, specific details to President Biden’s infrastructure plan were released, and manufacturing data painted an optimistic picture.
Travel Outlook – American Airlines revised Q2 projections upwards, as recent bookings eclipsed 90% of Y/Y totals from 2019. This adjustment comes on the heels of United Airlines and Southwest Airlines announcing plans to increase capacity, in order to meet the increasing demand. As an increasingly larger percentage of Americans become vaccinated, travel and leisure spending should continue to increase dramatically.
Infrastructure Plan – The White House released the details of President Biden’s infrastructure plan. Some of the highlights include:
$621 billion investment into transportation infrastructure
$400 billion to care for elderly and disabled Americans
$300 billion into improving drinking-water infrastructure, and an additional $300 billion into affordable housing efforts
The White House plans to fund the spending by raising the corporate tax rate from 21% to 28%. While this hike would be a substantial one, the new tax rate would still be lower than all-time averages (see below). Additionally, the proposal includes increasing the global minimum tax for multinational corporations to ensure they pay at least 21% in taxes in any country.
Economic Data – The Chicago Purchasing Managers Index (PMI) came in at 66.3 for March, compared to estimates of 60.7. Any reading higher than 50 indicates expansion in the manufacturing sector. The manufacturing index has not been this high since July 2018, indicating accelerated growth in the face of higher supply prices.
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