President Trump’s State of the Union was one for the ages.

In it, he touted the "unprecedented economic boom" he helped usher in, including:

  • 5.3 million new jobs
  • 600,000 new manufacturing jobs
  • Wages rising at their fastest pace in decades
  • Unemployment reaching the lowest rate in nearly 50 years
  • More than 157 Americans are now working
  • And of course, the passage of the tax cut for families that doubled the child tax credit

State of the Union impact on stocks.

President Trump’s speech, could certainly have an impact on the drug, defense, and infrastructure sectors.

With regards to pharmaceuticals:

"This is not an option. This is a necessity. The next major priority for me and for all of us should be to lower the cost of health care and prescription drugs and to protect patients with preexisting conditions. After my election in 2018, drug prices experienced their single largest decline in 46 years. But we must do more. It's unacceptable that Americans pay more than people in other countries for the exact same drugs made in the exact same place." 

While such a statement was nothing new, it still had a temporary sting with it.  Merck and Pfizer, for example, were both down slightly the morning following the State of the Union.

With regards to defense:

Trump spoke about the $716 billion budgeted for military spending in 2019, in addition to the $700 billion spent in 2018. He also referred to a $100 billion increase in spending from NATO allies, noting the U.S. “will outspend and out-innovate all others by far.”

“Boasting about the current funding for defense spending and taking credit for additional contributions from allies, President Trump set a hawkish tone for continued robust levels of defense spending,” commented Ed Mills, public policy analyst at Raymond James.

With regards to infrastructure:

“I know that Congress is eager to pass an infrastructure bill, and I am eager to work with you on legislation to deliver new and important infrastructure investment,” the President noted.

While related stocks didn’t move much after the SOTU, they’re still worth watching, as Trump calls out for needed improvements to ailing U.S. infrastructure.

As Trump’s impact on the economy and related stocks is felt, it could expose a considerable number of opportunities.

Stay tuned for more from The Cheap Investor.