Obama's economy - Which stock sectors to benefit

In the last 100 years, we did have recessions roughly every ten years. However, that's not the end of the world; every time we had technological revolutions bringing us out of recession and moving us forward. The internet revolution led us out of the 1980's recession. This time, there will be no difference, we just need a new technological revolution to boost our economy.

President Obama has set the stage for this to happen, by opening the gate for new stem cell research and for the development of renewable energy for the future of this country. We need to abandon the traditional "crude" energy, and embrace a new way of using renewable wind, geothermal and solar energies. In my opinion, Obama's new policy will bring new revolutions to this country and better days are ahead of us.

Stem Cell Research

President Obama is expected to lift the ban on federal funding on stem cell research in coming weeks, a historic move that will boost the US health industry. As a sign of the attitude of this administration, last week, the Federal Drug Administration said it had cleared US company Geron (GERN) to begin trials of its early-stage treatment for spinal cord injuries. This is breaking, almost revolutionary, news in the health industry as this will bring a new era of treating diseases. Investors welcomed this news.

Renewable Energy

Three main sectors are encouraged by the new president's renewable energy policy: wind, geothermal and solar, among which wind is the most economical energy when crude oil is trading at a multi-year low. China has rolled out many wind farm projects, targeting a cost of less than 10c/w, while the cost in the U.S. is also low compared to solar farms, which is estimated at around $1~1.5/w. China still has the advantage of cheaper labor compared to the U.S., and as a result, the cost to generate electricity in both wind and solar farms is lower.

Read more on Sectors favorable by Obama's administration here ..

Coal stocks showing gains

In a tough tape on Friday Coal related stocks performed above average and look to continue to run with profitable expectations growing. Massey Energy (MEE), Alpha Natural Resources (ANR) and Arch Coal (ACI) all have rising earnings expectations and are at 52 week highs. Just this past Monday, a broker, David Khani from FBR Capital Markets raised his price guidance for coal for next couple of years.

Massey Energy had a 1.48% increase on Friday when the S&P 500 fell 3%. This heavily covered producer of coal has had their current year earnings estimates increased for the current quarter from 0.50 to 0.76 in the past 90 days. The 13 analysts that cover the stock have also raised the yearly earnings estimates. The yearly earnings estimates have risen from 1.96 to 2.97 in the same 90 day period. Revenue is expected to increase 16% in the current quarter and 23.6% in the next quarter.

Nuclear Energy ETFs picking up steam

Nuclear power, long reviled as a dangerous source of energy, is on the verge of a comeback. That's because a growing body of scientists, politicians and environmental activists see atomic energy as part of the solution for global warming and our ever-growing dependence on foreign oil, much of it from nations that, if not downright hostile toward us, certainly don't share our values.

Invesco PowerShares last month launched an exchange-traded fund called the Global Nuclear Energy Portfolio (symbol PKN). The ETF tracks the performance of the World Nuclear Association (WNA) Energy Index, which contains 64 companies that design, construct and operate nuclear power reactors.

Launched on August 15, 2007, NLR was the first nuclear energy ETF listed in the U.S. and seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the DAXglobal® Nuclear Energy Index (DXNE).† DXNE generally includes only those companies that derive at least 50% of their current or prospective revenues from the nuclear energy industry. This makes NLR potentially attractive to investors seeking to gain targeted exposure to the global nuclear energy industry.

DXNE is currently comprised of a basket of securities of 38 companies from around the world that are engaged in nuclear plant infrastructure, uranium mining, uranium enrichment, uranium storage, nuclear generation, nuclear equipment and nuclear fuel transportation. The index includes many companies of global prominence, including Areva, Mitsubishi Heavy Industries, Hitachi and Cameco.

NLR had assets under management of $160 million as of March 31, 2008. Its total net expense ratio is 0.65%.