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THE AMERICAN JOBS PLAN: Last week, President Biden released a rather ambitious, $2.3 trillion plan to overhaul the country’s infrastructure with a significant shift toward green energy. As quoted by the White House’s official release, “The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.” The White House plans to pay for the proposal primarily through raising corporate taxes and eliminating tax breaks for fossil fuels. Stand by, as a second round of news is expected with more detail on the spending below as well as the source of all the needed capital.  As with any legislative undertaking of this size and scope, it will take time for Congress to agree and may even result in the plan being segmented into separate deals over the remainder of 2021.
Our eyes are wide open as to what this might mean for the markets, both regarding the global equity markets as well as global bonds.  Our quarterly investment commentary will address a lot of the themes we are seeing and the things we are doing in portfolios to address them.  Our recent renovation of our fixed income allocations is a key item we would encourage you not to miss.

MARITIME CHOKEPOINTS: About 80% global merchandise is shipped via sea. The recent blockage of the Suez Canal demonstrated how significant the chokepoints of maritime transport routes can be. Estimates placed the canal’s recent blockage as costing $400 million of trade per hour ($6.7 million per minute). Remarkable t note, 12% of the world shipping runs through this waterway.  The Japanese-owned ship blocked the canal for six days, bringing the total trade loss to an estimated $54 billion.  Important life and navigation lesson learned yet again, “Stay in your lane”.  See the chart below to get a sense of where these chokepoints lay throughout the globe.

LATEST ON ECONOMIC RECOVERY: With nearly 40% of the US population of 18 years or older having received at least one dose of the Covid vaccine, health conditions continue to improve overall. However, some regions of the US have seen rising rates of Covid infections. Meanwhile, flights have reached 70% of their pre-Covid levels. You may have noticed the roads filling up again; commuting is back to about two-thirds of its pre-Covid levels with overall road driving nearly entirely recovered. An unwelcome reality we increasingly see on the Fayette Street bridge in Conshohocken.