TRG | The Bottom Line – 3/5

The Dow Transports are just a hair away from their all-time high and have been above their 200 daily moving average for 168 straight days. Is this a play on the reopening trade and improving economy, and possibly also on the reports the Biden administration is prepping another big package focused on infrastructure? The #1 driver, in our opinion, is optimism on economy reopening. Vaccinations are rolling out, COVID cases are dropping nation-wide, and Americans are ready to get back to “normal,” even if a modified version given the realities of the post-COVID world. The second big driver has been Biden stimulus plan also fueling optimism. The $1.9T COVID relief bill could hit Biden’s desk by the end of next week. The bill includes 1) $$ to support accelerating COVID-19 vaccinations, 2) additional dollars to help K-12 schools prepare for re-opening, and 3) direct dollars, up to $1,400, to most Americans. These address all of Biden’s key top priorities.