It’s a story as old as the republic. Every new administration comes to D.C. with the intention of changing things, and, by and large, that means changing the flow of money – spending here, tightening there, taxing here, cutting there.

We get an okay idea of how that might play out during the long campaign season, but as we all know, candidates will more or less promise the moon to get elected.

But it’s usually not until after a new administration or Congress comes into power that a more concrete reality begins to take shape, as executive orders get signed and legislative agendas get set in motion.

So the first full week of a new administration and a new Democratic majority is the perfect time to take a long view of what they want to change, the better to align ourselves with the trillions of dollars that are about to flow through the gigantic U.S. economy.

Like they’ve said in D.C. for decades: “Follow the money”…

Halting COVID-19 Is Just the Start

Before the sun went down on Inauguration Day, President Biden had signed a raft of executive orders, many of which were aimed at achieving his stated top priority: stopping the coronavirus pandemic.

Congress is behind the president and will throw as much money as the Treasury can borrow, or better yet, as much money as the Federal Reserve can print, to pay for whatever is needed to stem the pandemic – at least at first.

But healthcare spending won’t necessarily stop at coronavirus testing, vaccines, and therapies. There’s every sign that the White House will dust off the old Obamacare playbook and add more than a few updates of its own.

During the Democratic primaries, “Medicare for All” and other single-payer healthcare systems loomed large; almost all of the would-be candidates espoused some variation on the idea. Biden himself sounded cool to the idea, promising instead to pursue a “Medicare for More” “public option” for health plans, which, according to him, would make private health plans more affordable.

There will be lots of internal debate across the Democratic Party, to say nothing of the debate with Republicans, but either way it seems clear that healthcare spending is likely to run into the hundreds of billions of dollars by 2024 or 2028. That spending will continue to move markets long after COVID-19 passes into the history books.

I think the smart stock to own for the long haul is UnitedHealth Group Inc. (NYSE: UNH), and here’s why. UnitedHealth specializes in Medicare supplemental plans. If President Biden gets his way and gets a Medicare or “Medicare for More”-type solution through Congress, demand for supplemental plans will go through the roof.

According to Credit Suisse analysts, nearly 23 million individuals would be newly eligible for Medicare, which means UnitedHealth is looking at millions of new customers.

UnitedHealth is already the biggest player in that game.

But that’s not all United does. The company offers health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; in other words, it covers just about everyone, including children.

Getting the Country Rolling Again

There’s a broad, bipartisan consensus that infrastructure spending is going to be critical to getting America’s COVID-19-ravaged economy humming along for the long term.

That’s not necessarily anything new; lots of previous administrations, including Trump’s, have promised to rebuild the country’s increasingly creaky infrastructure. The difference is President Biden and his party will have wide latitude – and the money, again, courtesy of the Fed – to do something about it. The nomination of Obama-era Federal Reserve Chair Janet Yellen for Treasury Secretary is proof Biden intends to shoot for the moon here.

In addition to physically improving the country, whether that’s wider, faster highways, bigger, cleaner airports, or more efficient public buildings, a big infrastructure spend will create millions of jobs and invigorate several industries that have languished over the past few decades, not unlike a projected $353 billion capital “tsunami” I think could be headed this way.

Vulcan Materials Co. (NYSE: VMC) is, hands-down, my favorite “pure play” on the impending spending spree; it’s at the epicenter of the construction materials needed to build wider highways, new buildings, airports, and the like. Vulcan manufactures and sells “aggregates,” including crushed stones, sand and gravel, sand, asphalt, and ready-mix concrete – all the products used in the construction and maintenance of highways, streets, and other public works.

A Leaner Green New Deal

The so-called “Green New Deal” is a top Democratic policy priority that changes shape as you move across the Democrats’ ideological spectrum. The big idea, loosely stated, is to overhaul and modernize whole sectors of the U.S. economy with an eye toward reducing inequality and combating climate change.

Now, there’s little chance that Congress will pass a Green New Deal in its entirety; even among Democrats, there are varying appetites for that kind of change. But there is broad, emerging agreement on the need for – and economic potential of – exploring and exploiting new and renewable energy sources.

That’s where the Biden Administration will lead with spending, on renewable energy – to the detriment of fossil fuels and fracking, no doubt.

When I look out at the next two to four years, I see so many great renewables plays that it’s almost like shooting fish in a barrel.

Frankly, one of the biggest fish in that barrel is First Solar Inc. (NASDAQ: FSLR). Maybe it’s ironic then that First Solar has just completed a corporate slimming-down. It recently shed some of its ancillary businesses that appeared to make it look like a vertical winner… but were really just devouring capital and management focus. The leaner, meaner First Solar now has a clear and, as far as I can see, unobstructed path to streamlined growth.

It also has an enviable cash hoard for a business in its position. The name of the game is increased manufacturing capacity; First Solar is going to focus on that to keep its lead in the business. More solar panels, more sales, and, of course, more profits for shareholders.

— Shah Gilani

Source: Money Morning