Critical information for the trading day.
U.S. stocks got off to a mixed start on Monday, after the S&P 500 notched its 28th record high of the year on Friday.
Investors will be closely watching the Federal Reserve's latest monetary policy decision on Wednesday as well as what Chair Jerome Powell has to say .
President Joe Biden's infrastructure plans are also in focus, after talks with Senate Republicans over a $1.7 trillion deal collapsed last week. Bipartisan efforts over a compromise are continuing, while a Democratic-only Reconciliation Bill is also seen as an option. Biden has set a summer deadline for Congress to pass his top legislative priority.
In our call of the day, Citi strategists looked at the prospects for Biden's infrastructure plans and the stocks that are likely to benefit.
The strategists, led by Edward Morse, said it now looked likely that passable legislation would be below the $1.7 trillion of infrastructure but higher than $1 trillion. The team looked at which areas would still make the cut in terms of spending.
"Enhanced policy support for carbon capture, utilization and storage (CCUS) likely survives and would have bipartisan support if a reconciliation process fails," they said.
CCUS involves capturing carbon dioxide from large sources, such as power plants, and storing it to be recycled. It can play an "important and diverse" role in meeting global energy and climate goals, according to the International Energy Agency.
"The bill could jump-start an industry that could grow to be larger than today's domestic oil-and-gas industry," Citi strategists said. That would change the terminal value debate over companies such as Exxon Mobil $(XOM)$, which has more than 30 years of experience in CCUS, and other established names in the space, including Baker Hughes $(BKR)$, Schlumberger $(SLB)$, Chart Industries $(GTLS)$, Valero Energy $(VLO)$ and Kinder Morgan $(KMI)$, they added.
Renewables adoption is also poised to accelerate, they said, with the demand for clean energy boosted by Biden's agenda on climate change. It could potentially lead to significant investments in existing renewable facilities and building new solar and wind farms.
"We think this bodes well for specialty contractors, such as MasTec $(MTZ)$ and engineering and construction-focused Fluor $(FLR)$ given their expertise in clean energy infrastructure and management, as well as for General Electric $(GE)$ given its wind turbine portfolio and related digital offerings," they said.
Two other long-term themes to watch out for are electric-vehicle infrastructure and green hydrogen, which is produced when renewable energy powers the electrolysis of water -- breaking it into its component elements of hydrogen and oxygen.
MasTec, Rockwell Automation $(ROK)$, 3M $(MMM)$, Vontier $(VNT)$ and Dover Corp $(DOV)$ are all set to benefit from EV proliferation, while General Electric, Emerson Electric $(EMR)$ and KBR $(KBR)$ can capitalize on the emergence of green hydrogen, they added.
The markets
European stocks climbed to fresh record highs on Monday as inflation fears continued to ease. U.S. stocks were mixed in early trading . The yield on the 10-year Treasury remained anchored below 1.50%.
The tweet
Bitcoin jumped sharply on Sunday Chief Executive Elon Musk said the electric-vehicle company "only" sold around 10% of its holdings and would resume allowing transactions using the cryptocurrency when 50% of energy used to mine it comes from clean sources. Bitcoin was trading at $39,507.35 early on Friday and has climbed 11.7% in the past 24 hours, according to CoinDesk.
The buzz
Royal Dutch Shell is reviewing its holdings in the largest oil field in the U.S . -- the Permian Basin, mostly in Texas -- according to reports on Sunday. A sale could raise up to $10 billion, CNBC said.
U.K. Prime Minister Boris Johnson is expected to confirm a four-week delay to the next planned relaxation of COVID-19 restrictions in England due to the spread of the delta coronavirus variant.
Leaders of the G-7 (Group of Seven) countries rallied around Biden's call to challenge China over human rights and vowed to donate one billion COVID-19 vaccine doses to poorer nations over the next year.
Novavax $(NVAX)$ reported that a Phase 3 study of its COVID-19 vaccine showed it was 90.4% effective overall . The 29,960-patient study also found that the vaccine provided 100% protection against moderate and severe disease. The biotech intends to file for regulatory authorizations in the third quarter.