Biden swiftly moving to roll back Trump-era policies.
Climate change initiatives at top of the agenda
“Mask up” America to combat COVID.
Hard work begins as he starts working with a razor-thin Congressional majority.
President Biden has been active since he took office last Wednesday. But it is not abnormal for a President to hit the ground running. President Biden has just been a bit more active in his first few days than his predecessors. He has signed over two and a half dozen executive orders since his inauguration. President Trump signed 22 executive orders in his first 100 days and President Obama signed 19 in his first 100 days. It was expected that President Biden was going to act quickly to roll back as many of Trump’s policies as possible. We recap some of the orders he has signed thus far and what we expect over the first 100 days of his Presidential term.
- Climate change. The first executive actions taken were rejoining the Paris Accord and cutting off the Keystone This is not a surprise given that Biden has stated he wants net zero emissions by 2050 and has appointed a long-time environmentalist, John Kerry, to spearhead our domestic initiatives. One area that should benefit from this is more public/private partnerships in infrastructure that is supportive of a clean energy environment. However, shutting down the Keystone pipeline will result in job losses and the potential for higher energy prices in the U.S.
- Mask up: He has required a mask mandate in all areas within his power for the first 100 days (e.g. airports, federal buildings). This and aiming for 100 million COVID vaccinations in his first 100 days are part of his aggressive COVID ambitions.
- Relief for COVID: He has approved the extension of moratoriums and foreclosures through March 31 and will continue to halt accrual of interest on student loan debt until Sept 30th. He has also asked for states to increase food stamps by 15%. He also directed his agencies to produce a comprehensive plan to increase the minimum wage for federal
- Immigration reform: Biden halted funding of the border wall, ended the Muslim travel ban, and plans to fortify Deferred Action for Childhood More comprehensive immigration policy is important quickly since we are dealing with a health crisis and immigrants moving towards the border.
The Bottom Line:
Executive orders are much easier than getting actual policies/laws in place. Now the hard work begins as Biden needs to work with a razor-thin majority in Congress to get past his more aggressive plans. In the next 100 days, we think the priority will be getting another COVID stimulus package done and using the Defense Production Act to speed up the vaccine distribution. However, there is skepticism by moderate Republicans and Democrats on the price tag of the $1.9 trillion bill and where the money is being targeted. Some want to see more money for vaccine distribution. This is logical since the answer to get us back to normal is here (i.e the vaccine) we just need to get it out.
History tells us that once the initial euphoria about a new party entering office fades, returns in equity markets get much choppier in February and March.* In the near term, sectors/subsectors in energy may remain under pressure due to Biden’s energy policies. However, we will be closely watching the COVID stimulus and what it means for long-term interest rates. Higher long-term rates threaten the expensive (high P/E multiples) tech and growth stocks that have led the rally in recent years.
By Megan Horneman