Biden's State Of The Union May Coincide With Government Shutdown: What To Expect, Sectors To Watch

President Joe Biden currently leads as the favored candidate for the Democratic nomination in the 2024 presidential election.

While he's not campaigning, Biden is busy governing the country and focusing on top priorities. Voters will hear more about those priorities and recent wins from his administration during the president's upcoming State of the Union address.

What Happened: Biden is set to give his State of the Union speech on March 7 in front of a joint session of Congress, Supreme Court justices, members of his Cabinet, military leaders and millions of viewers watching on television at home.

As of now, Biden's speech could come with the government in a partial shutdown, which would mark the first time a president gives a State of the Union under that scenario, according to CNN.

As things currently stand, a potential government shutdown was extended to the March 1 and March 8 deadlines, with a vote in January.

On Thursday, the House of Representatives passed a one-week stop-gap with a vote of 320 to 99, extending the deadlines to March 8 and March 22. The stop-gap heads to the Senate for a vote of approval.

The current funding extensions see the first date apply to some parts of the federal government that including energy, transportation, agriculture and Veterans Affairs. Other units of the government would be covered until the second date, currently set for March 8.

CNN said that right now, Biden's speech on March 7 would come with around 20% of the federal government shutdown and out of money on the current funding bill.

Reports indicate that the State of the Union may be at risk of cancellation due to funding challenges and concerns raised by several members of Congress regarding the ongoing border crisis.

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Sectors to Watch: Biden’s State of the Union speech last year included comments made on junk fees, stock buyback taxes, infrastructure, the CHIPS Act, medical costs and electric vehicles.

The new State of the Union will likely include several old themes, and could also look for the president to establish priorities in other areas.  

Here are several sectors and ETFs to watch given the government shutdown and Biden's focus areas.

Airlines: The government shutdown could see a shutdown of part-time workers and training of new staff for the airline sector. This could lead to increased cancellations and pressure on the airline industry, which would put the U.S. Global Jets ETF JETS in the spotlight.

Transportation: Along with airlines, the railway industry could also be impacted by government shutdowns. The iShares Transportation Average ETF IYT covers the S&P 500 transportation stocks, which could be under pressure later this month.

Infrastructure: The infrastructure sector could be on watch for Biden's State of the Union address, as it was one of his key topics in last year's speech. The president highlighted the U.S.'s ranking compared to other countries and needing to spend more. The Global X US Infrastructure Development ETF PAVE is one of the largest ETFs for the sector.

Defense Spending: Biden will also likely talk about the current wars in the Middle East and in Europe and how the United States should approach them. Biden has supported additional military aid for Israel and Ukraine, which could be a key topic during his speech. The iShares U.S. Aerospace & Defense ETF ITA includes many of the top defense stocks, which could benefit from increased government military spending.

Electric Vehicles: Last year, Biden prioritized electric vehicles (EVs) in his agenda and received an endorsement from the UAW. However, with some congressional members urging a slowdown on EV initiatives, it will be intriguing to see if EVs will once again be a central theme. The Global X Autonomous & Electric Vehicles ETF DRIV tracks the EV industry.

Artificial Intelligence: Last year's speech also emphasized the importance of the CHIPS Act and the semiconductor sector. This year's speech could include comments on the growth of artificial intelligence, while also focusing on the safety and guidelines for the sector. The Global X Artificial Intelligence & Technology ETF AIQ is one of the largest AI-themed ETFs available.

SPY Price Action: Biden’s State of the Union comes with the stock market trading near all-time highs. The SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 Index, trades at $507.76 versus a 52-week trading range of $380.65 to $510.13.

Read Next: Biden Calls In Budget Big Guns: But What Happens If Government Shutdown Can’t Be Avoided?

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