With today's inauguration, Barack Obama has become the 44th President of the United States.
Now, with Obama in the White House, how much do you really know about investing over the next 100 days -- and even the over next four years?
The following are key insights from
Biotech and Health Care
Obama Will Boost Biotech (Video)
Rosanne Ott, portfolio manager for the four star Alger Health Sciences Fund, says health care stocks will benefit during President Obama's first 100 days in office, especially generic drug-makers
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TheStreet.com BioTalk: Obama and Health Care Reform
Obama Won't Obliterate Drug Stocks
For Biotech Stocks, '09 May Be Touch and Go
Investors will be watching closely for details of Obama's health-care reform agenda and how quickly any changes get enacted. Broader health-care coverage has the potential to increase prescription drug use, but higher volumes may be offset by government-negotiated (read: lower) drug pricing.
Biotech companies tend to focus on drugs that treat serious or fatal diseases, which may shelter them from some of the efforts to lower drug prices. However, the escalating cost of cancer medicines could render the companies that make them vulnerable.
Biogenerics, or low-priced copycat versions of biologic drugs, will also be coming to the U.S. market as soon as Congress and the Food and Drug Administration finalize a regulatory pathway.
There's already some evidence that American consumers are cutting back on prescription drug spending because of the recession. Clearly, that's not encouraging for drugmakers if the trend continues.
Again, biotech companies may be better positioned to weather a downturn in drug spending since many of the drugs they sell are designed to treat serious or fatal diseases. An HIV-positive person, for instance, is not likely to cut back on his HIV drugs from
. Likewise, a multiple sclerosis patient will find a way to continue taking
Read the full article.
Education Stocks on Obama's Honor Roll
Education stocks have rallied over the past week, thanks in no small part to newly released details about Obama's proposed stimulus package. A positive earnings report from
also helped the group advance, and analysts say that several important catalysts could push names like Apollo and
even higher in the coming months.
Over the last year, education stocks have performed well even as the major stock averages have tumbled more than 35%.
has risen 27%, and
has climbed 15%.
Grand Canyon Education
, public only since November, has jumped 70% in that time.
Even the sector's laggards have bettered the broader indices, with
slipping 9%, and
losing 15% over the last year.
The group has already started 2009 with a bang after details of the incoming Obama administration's economic stimulus package were released by the House of Representatives.
Cramer: An Infra Opportunity for Obama
The new president is being given a once-in-a-lifetime infrastructure opportunity to build enough
oil tankers and tanks to sop up the supply. That's what is needed more than anything... We have tons of infrastructure companies that could put people to work right now building storage facilities:
Chicago Bridge & Iron
. They should all get work.
Cramer: Obama's Infrastructure Play (Video)
Jim Cramer says this stock is the best one to own off of Obama's infrastructure package, but buy it at the right levels.
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Cramer: Worried About Infra Stocks
Don't Trek To Vulcan Materials
Nine Stock Funds for an Uncertain '09
In addition to the new U.S. administration, governments across the globe plan to boost infrastructure spending as a means to reverse the economic decline. As a holder of stocks that own, service or manage infrastructure, the
Virtus Global Infrastructure Fund
is likely to benefit.
As the owner or infrastructure-intense utility stocks, PGUAX also qualifies as defensive vehicle because of the recession resistance of that sector. Central bank slashings of interest rates should also result in lower costs for the capital-intensive utility stocks held by PGUAX.
Read the full article.
Energy Stocks Likely to Rally With Obama
is the most spotlighted solar stock, but others have followed similar paths. While these stocks may benefit from an Obama presidency, they still trade at huge multiples and are extremely speculative and risky. Not my cup of tea.
The next place to look would be battery and fuel-cell technology companies. There's been a lot of technological advancements in this area in the last several months, and the target is constantly changing; but with Obama's commitment to hybrids and specifically to plug-ins, the next great advance needs to come from battery technology. The old-fashioned lead-cell design has gone about as far as it can to move this kind of vehicle along. Look for the latest in batteries from those companies working with lithium-ion designs.
If you want two ideas here, and they're certainly not exclusive, try
for a more conservative and established approach. It may turn out to be the exclusive provider of high-powered Li-ion batteries for domestic cars. If you want a flier, take a look at
, which is working hard to get a foothold in this fast-moving market space.
Energy Recovery Won't Be Easy in '09
Obama's creation of an energy team with a focus on independence and renewables has provided optimism for the sector. He has named Carol Browner, the former head of the Environmental Protection Agency, as a renewable-energy czar, and installed several other officials who have expressed support for conservation and alternative energy.
"The folks that they've chosen are complementary," says Julie Blunden, a vice president of solar company
. "Most of them know each other and they have a breadth of experience across the country, including several markets that are important to renewable energy going forward."
Until it's clearer which companies will reap the benefits from the renewable push, another area for investors to explore is natural gas, which burns cleaner than crude-oil products or coal. Lisa M. Zembrodt, a commodity analyst with Summit Energy, says that while natural-gas prices have plunged along with other energy prices, the slump isn't sustained by fundamentals.
If the sector regains favor, producers such as
, and integrated firms like
, could stand to benefit.
Follow the Government's Energy Efficiency Contracts
If oil and coal remain cheap, the Obama administration may be hard-pressed to justify these contracts' hefty price tag. But many expect the current supply cutbacks in oil and natural gas to steadily boost energy prices later in 2009, and that should pave the way for ongoing ESPCs
Energy Savings Performance Contracts.
So who are the beneficiaries? Mostly utilities and energy consultants, but also companies that are involved in the construction, heating and cooling of government facilities... If you're looking for a pure play on this theme, check out
, which was also just awarded an ESPC, through its Trane division.
Obama Will Spark Biofuel Boom (Video)
David Gillespie, CEO of
New Generation Biofuels
, explains why biofuel companies will boom again under an Obama administration.
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Financial Services and Banks
Obama Gives One to the Taxpayers
Obama actually favors the taxpayer over the bank executives and shareholders. He is actually trying to help the homebuyers,
the people who make a ton of money working at banks or owning stocks in them. And with his little note to Congress on TARP, we got the TARP ripped off the bank group, and then, ultimately the stock market.
...this is a deadly statement for banks, just deadly. Might as well shoot 'em like lame horses.
Obama to Sweep Street, Not Repave It
Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, a lobbying group, expects Obama to add consumer protections, modernize and strengthen the regulatory structure, tighten credit standards and begin delving into areas that haven't been regulated before. Credit default swaps are "right at the top of that list," Talbott says. He also predicts a "systemic-risk czar" of sorts. Obama alluded to a similar concept last spring, proposing a Financial Market Oversight Commission, which would advise him, Congress and regulators on systemic risks that threaten to destabilize the financial markets.
Another key element of Obama's plan is to centralize supervision of financial institutions from the plethora of governing bodies that exist today: the
, Treasury Department, Office of Thrift Supervision, Comptroller of the Currency,
Securities and Exchange Commission
and Commodity Futures Trading Commission, as well as the Federal Housing Finance Agency...
The Dollar and the Economy
Obama and the Strong-Dollar Policy
President Obama, however, will likely be fortunate that the dollar's multiyear bear market appears to have ended between late 2007 and mid-2008. The financial crisis, as measured by things like the TED spread or OIS/LIBOR, has moved away from the edge of the abyss, though of course the situation remains serious. Our expectation that the combination of the aggressive monetary and fiscal policy, dramatic decline in oil/gasoline prices, and the rise in real wages (inflation adjusted) will lead the beginning of an economic recovery in the second half may be on the optimistic side of the debate. But even the more pessimistic side says we are off by only six months, which might be a bit of splitting hairs for medium- and long-term investors.
One element of dollar policy that the Obama team will have to address early on is the report on currency market manipulation. The Bush administration never found China guilty of manipulating its currency for trade gain. There is some speculation that Obama will reverse this and cite China; that would open the door to possible retaliation (after negotiations).
But there is little basis to believe this talk has merit.
Laffer: Obama Will Tax Us to Death (Video)
Arthur Laffer, economist and author of
The End of Prosperity
, says Obama's tax plans and reckless spending by Congress will sink the U.S. economy and stock-market investors.
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This article was written by a staff member of TheStreet.com.