5 Growth ETFs To Gain On Stimulus & Vaccine Optimism

Dna, Genetic Material, Helix, Proteins, Biology

Wall Street has cheered the swearing in of President Joe Biden as the 46th President of the United States. In fact, the S&P 500 witnessed its best Inauguration Day returns of 1.39% since Ronald Reagan’s second inauguration in 1985, according to Dow Jones Market Data, as quoted in a MarketWatch article.

It is believed that the chances of another tranche of coronavirus-aid package and improved coronavirus vaccine rollout are making a strong case in favor of faster U.S. economic recovery in 2021. Going on, Democrats have taken control of the U.S. Senate with two Georgia victories. Notably, an effective control of the U.S. Congress by the Democrats is likely to bring in higher fiscal stimulus funding and faster implementation of nationwide vaccination in order to curb the pandemic along with higher allotment of funds for infrastructural development and boosting jobs in the near future.

Against this bullish backdrop, let’s look at some factors that can lead to an outperformance by growth ETFs:

A $1.9-Trillion Coronavirus Stimulus Package

Biden has announced details of his $1.9-trillion stimulus plan, which has been named the American Rescue Plan. The relief package will extend the additional federal unemployment payment through September and will raise it to $400 per week. The new plan also includes $1,400 of direct payments to many Americans and extends the federal moratoriums on evictions and foreclosures through September, per a CNBC article.

The stimulus proposal also allocates $350 billion in state and local governments support, sets aside around $70 billion for coronavirus testing and vaccination programs, and increases the federal minimum wage to $15 per hour, according to the same CNBC article. It is worth noting here that there is ambiguity regarding whether Biden’s proposal will be approved by Congress.

Increasing hopes of an additional stimulus package, Janet Yellen, President-elect Biden’s designated nominee for Treasury Secretary and a former chair of the Federal Reserve, has urged to ‘act big’ during her appearance before the Senate Finance Committee on Jan, 19, per a CNBC article. She has requested the federal government to pass a large stimulus to support the economy.

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