ETF Investing Areas Looking Attractive After a Blue Wave

Wall Street has impressed investors with a record rally as stocks climbed to all-time high levels. The Dow Jones Industrial Average was up 0.7% on Jan 7. Moreover, the other two broader indices, the S&P 500 and Nasdaq Composite, gained 1.5% and 2.6%, respectively, on the day. In fact, it was the first-ever climb above 13,000 for the tech-heavy Nasdaq Composite.

The market euphoria can be attributed to Democrats taking 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 developments and boosting jobs in the near future.

Meanwhile, many economists and financial experts are speculating and fearing that complete control of Democrats over the Congress may lead to implementation of higher corporate taxation and stricter regulations on big technology and communication providers. However, it is being expected that such changes will not be imposed immediately.

Going on, JJ Kinahan, chief market strategist at TD Ameritrade (NASDAQ:AMTD), has said the election results give investors “more clarity” by “solidifying Democrat control in Washington and increasing expectations of more stimulus to come,” per a CNBC article.

Thus, for investors looking to prepare their portfolios considering the major change in the U.S. political environment, we have highlighted some ETF investing areas that are expected to boom in the current situation:

Alternative energy includes any energy source that acts as a replacement to conventional and non-renewable fossil fuel. This space has been in the spotlight of late for many reasons. Increasingly, large corporations are making or promising investments to gain the carbon neutral status. Notably, favorable government initiatives and federal policies, which include tax incentives to encourage installation, have accelerated global market growth for clean energy in 2020. Moreover, despite turbulences arising from the coronavirus pandemic, both solar and wind energies have been dominating the global renewable space of late.

The space is expected to get stronger under the Joe Biden administration. Biden is expected to talk about the climate emergency on global platforms and ensure that the United States achieves a 100% clean energy economy and net-zero emissions, no later than 2050. Going on, Biden’s climate and environmental justice proposal will Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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Written By: Zacks Investment Research