UBS On-Air: Market Moves Top of the Morning: From sea to shining sea - The transcontinental railroad
Nov 10, 2025
Kurt Reiman, Head of Fixed Income for the Americas at UBS, and Nathaniel Gabriel, U.S. Industrials and Materials Sector Strategist, delve into the transformative history of the Transcontinental Railroad. Kurt draws fascinating parallels between this major infrastructure project and modern capital expenditure cycles, highlighting themes like capital intensity and market evolution. Meanwhile, Nathaniel shares insights on the railroad's economic impact, its regulatory trends today, and the potential for future transcontinental mergers. A thorough exploration of innovation and its lasting effects!
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Historical Innovation Informs Today's Tech Buildouts
- The 250th anniversary series studies U.S. innovation to draw parallels to today’s transformational shifts like AI and infrastructure buildouts.
- Kurt Reiman argues historical projects reveal lessons for investors on CapEx cycles and technological adoption.
Funding, Golden Spike, And Mixed Legacy
- The transcontinental railroad was funded by government bonds, company stock and land grants and completed with the Golden Spike in Utah in 1869.
- Nathaniel Gabriel highlights both the transformative economic impact and the social costs like displacement of Native Americans and low-wage labor use.
Railroad Multiplied Economic And Systemic Benefits
- The railroad cut coast-to-coast travel time from months to about a week and slashed costs by roughly 85%, unlocking western resources and agriculture.
- It also brought peripheral innovations like telegraph expansion and the creation of standardized U.S. time zones.
