President Biden’s proposed, whopping, expenditures to strengthen the U.S. economy are taking shape, with the House’s approval of a $3.5 trillion budget resolution and a $1 trillion bipartisan infrastructure bill. Thus, assuming the ultimate passage of these proposals into law, the economy is expected to grow significantly in the near term, allowing growth stocks, ON Semiconductor (ON), Dillard’s (DDS), and Cohu (NASDAQ:COHU) to deliver satisfying gains. Let’s discuss.The United States has snapped out of its pandemic-driven recession. The government has been deploying sizable investment packages to propel the growth of almost every sector. Most recently, on August 24, the House voted to advance the $1 trillion bipartisan infrastructure bill while approving the $3.5 trillion budget blueprint that includes President Biden’s critical domestic policy proposals. This marks significant progress in Biden’s “Build Back Better” agenda, which if passed into law is expected to benefit businesses across almost every sector.
Despite several headwinds, including the resurgence of the COVID-19 cases, the proposed large-scale investments and fiscal stimulus are expected to drive investor optimism. Consequently, growth stocks, which tend to perform well during an economic boom, are expected to gain handsomely.
Given the potentially robust government spending and positive investor sentiment, we think stocks with promising growth prospects, ON Semiconductor Corporation (ON), Dillard’s, Inc. (DDS), and Cohu, Inc. (COHU), should gain substantially.