Sorting Through the BBB

Tariffs are front and center this week and will likely remain a focal point over the next few weeks as details emerge. While specifics are not yet available, gaining more clarity will be a positive development on a relative basis. The next stage of the Trump Administration’s agenda will focus on the more growth-oriented components, such as tax cuts and deregulation.

Over the 4th of July weekend, the “Big Beautiful Bill” (BBB) was signed into law, and here are a few specifics. We remain confident in the potential for the economy to achieve above-trend GDP growth from the tax cuts and deregulation. Currently, the second-quarter GDP is running at 2.5%.

Winners:

• Defense: The defense budget will see a $153 billion increase, eventually becoming a $1 trillion annual program.
• Manufacturing: The full and immediate deduction of the costs associated with building new manufacturing facilities will spur demand growth in this industry. Not only will industrials benefit, but semiconductor companies also are likely to see increased activity.
• Corporate America: Companies will see lower taxes and are expected to use their additional funds to increase capital expenditures (capex) and investments in their businesses.
• Border Security: Enhanced funding and resources are expected to bolster activities in this area.
• Small and Medium Businesses: These businesses are likely to experience increased activity due to favorable policies.
• Crypto Firms: These firms may also benefit from the evolving financial landscape under the new bill.

Challenged:

• Healthcare Industry: Hospitals will face challenges due to a $1.1 trillion reduction in government subsidies.
• Renewable Energy: Wind, solar, and electric vehicle (EV) sectors will lose out as tax credits are removed.
• Deficit Hawks: With increased government spending on these programs, the deficit is expected to grow by $3.4 trillion. While economic growth could offset some of the additional spending, and lower interest rates could reduce the $1 trillion in annual interest payments, deficit concerns remain significant.

Bottom Line:

The BBB presents both advantages and disadvantages for the economy. While compromises have been made on both sides, we do not directly invest based on government policies. However, understanding the broader implications of these measures is crucial. Ultimately, we remain optimistic about the growth potential for the economy under these new conditions.

Stephanie Link’s TV Schedule:

Disclosure

Investment Solutions is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC, as a member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC. This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is neither indicative nor a guarantee of future results. The investment opportunities referenced herein may not be suitable for all investors. All data or other information referenced herein is from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other data or information contained in this presentation is provided as general market commentary and does not constitute investment advice. Investment Solutions and Hightower Advisors, LLC or any of its affiliates make no representations or warranties express or implied as to the accuracy or completeness of the information or for statements or errors or omissions, or results obtained from the use of this information. Investment Solutions and Hightower Advisors, LLC assume no liability for any action made or taken in reliance on or relating in any way to this information. The information is provided as of the date referenced in the document. Such data and other information are subject to change without notice. This document was created for informational purposes only; the opinions expressed herein are solely those of the author(s) and do not represent those of Hightower Advisors, LLC, or any of its affiliates.