The Magnificent Seven, consisting of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, has emerged as the top performers in the stock market this year. This demonstrates the positive outcomes of supporting American innovation and resilience. As a result, investors are now searching for companies in other industries, located in the heartland of the United States, that are poised to benefit from the green industrial revolution.
Despite concerns about higher interest rates and the possibility of a recession, Middle America is continuing to thrive in the business sector. These conditions present opportunities for diversification. While recession fears still exist due to the lagging effect of interest rate hikes, it is believed that the impact on the US will be milder compared to Europe or the UK.
According to David Harrison, the manager of the Rathbone Global Sustainability fund, there are companies that are leveraging the industrial policies introduced by President Biden to “make America great again.”
The passing of the Inflation Reduction Act in 2022 aims to expedite America’s energy transition, leading to significant investments in manufacturing and the “onshoring” of jobs. This legislation has created a more favorable environment for labor-intensive long-term projects, even ones that may be considered “woke.”
Another important legislation is the Infrastructure Investment and Jobs Act, which aims to upgrade the nation’s infrastructure, including bridges and roads. The deterioration of the nation’s infrastructure, such as the average 100-year-old water pipe system, has become a pressing issue.
Goldman Sachs predicts that despite resistance in some circles, there will be increased corporate and consumer interest in projects resulting from the Inflation Reduction Act. This policy could potentially drive $3.3 trillion in spending over the next decade, benefiting green businesses.
Bank of America identifies various sectors that are likely to benefit from the Inflation Reduction Act. These sectors include agriculture, battery and energy storage, renewable energies, and construction. Well-known companies such as Caterpillar, General Electric, and Honeywell are expected to benefit, as well as lesser-known businesses like Bloom Energy and Teledyne.
The increase in data centers due to the digitization trend and the integration of generative AI has led to a higher demand for water resources. This benefits companies like Advanced Drainage System, which specializes in drains made from recycled plastics. Water companies like Xylem and Badger Meters also have the potential for growth.
Recently, there has been a reevaluation of the prospects of the S&P 500 index among influential forecasters on Wall Street. The index has already risen by 16% since the beginning of the year. Some strategists, who previously predicted a lower year-end value for the index, now believe it could reach as high as 4,750.
Investors are advised to review their exposure to the US market, ensuring it encompasses not only Silicon Valley but also Middle America. Furthermore, owning shares in UK companies that play a significant role in American mega-projects can be advantageous.
Dzmitry Lipski, a funds analyst at Interactive Investor, recommends considering the Artemis US Smaller Companies fund, which focuses on infrastructure and renewable energy themes, as a way to invest in Middle America.
Warren Buffett, the renowned billionaire US fund manager, has famously stated that one should never bet against America. Considering his success and experience, this advice holds weight, even at the age of 93.
Some links in this article may be affiliate links. If you click on them, we may earn a small commission. This helps us fund This Is Money and maintain our editorial independence.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
