With the inauguration of President Obama on January 20, 2009, infrastructure, education, energy independence along with science and technology will become national priorities. The so-called “shovel ready” projects are on the front burner with city, county and state governments forwarding their pet project wish lists to the new administration.
Construction
Rebuilding roads, bridges, intersections and transit systems will require concrete, gravel, cement, as well as steel, asphalt, lumber and wood. Demand for these products will support the stock prices of companies involved in the production of construction materials. Workers who lost jobs with the housing collapse may find new employment opportunities.
Education
Children should be considered any nation’s greatest national resource. A spotlight on education, especially early childhood education, promises to elevate the importance of teachers and charter schools, along with merit pay proposals. Addressing the achievement, equality and international competitiveness gaps will offer profit opportunities for the sector.
Energy Independence
With crude oil prices tumbling and the auto industry in reverse, the new President has pledged to invest in green infrastructure as part of his push to reduce America's dependence on foreign oil. These projects are expected to create jobs and help re-invigorate the economy, opening markets for wind, solar and biofuel alternatives. Companies at the forefront of alternative energy production are poised to benefit.
Science and Technology
President Obama has signaled that climate change and genetic research will be among his top priorities when he takes office. Genetic research, marine biology, and environmental pollution will be at the top of the agenda, and companies with creative solutions to these pressing problems will benefit, as will their stakeholders.
Defense
With the economic crisis has brought attention once again to the guns versus butter argument. But the conventional wisdom that Democrats are soft on defense may give way to a more pragmatic view. According to Merrill Lynch, aerospace and defense have done better under a Democratic rule, especially during a recession, because national security is a good hedge against the broad market. Obama’s promise to withdraw troops from Iraq may mean an end to the profit stream for makers of ammunition and armor supplies, weapons systems and military contractors. But the defense sector will see a shift in priorities and a rotation out of short term support products and toward longer term projects involving homeland security, benefiting big name defense contractors.
World stock markets have been in a holding pattern since the U.S. election, awaiting the new President and his agenda. A relief rally of sorts would not be out of the question once Obama officially takes office, but an end to the recent global financial crisis will be welcomed just as warmly.
