On Tuesday night, President Barrack Obama will deliver the
first State of the Union speech of his second term. State of the
Union addresses are often long on great oration, but short on
rhetoric worth remembering beyond a couple of days after the
In recent memory, the U.S. has had few great orators in the
Oval Office. Ronald Reagan and Bill Clinton top the list, but the
reality is few, if any Americans run around repeating quotes from
State of the Union addresses.
For investors, the quality of the oration is not nearly as
important as the substance. With the intersection of Capitol Hill
and Wall Street still too close for comfort in the eyes of some,
President Obama's speech will be worth parsing over to see which
sectors could be in play the rest of this week.
Without the benefit of a crystal ball or an advance copy of
the speech, some educated ETF guesses are being made here, but a
couple are obvious candidates for post-State of the Union
PowerShares Build America Bond Portfolio (NYSE:
) As some income investors no doubt remember, the PowerShares
Build America Bond Portfolio and other Build America Bond funds
wound up being one sub-segment of the ETF market
caught up in the fiscal cliff debate
These bonds, authorized under the 2009 American Recovery and
Reinvestment Act, are now potentially vulnerable to
sequestration, which lead to automatic budget cuts. President
Obama wants Build America Bonds to be a permanent fixture, as do
members of his party
Some Republicans do not feel the same way. In other words, it
is not out of the realm of possibility that Obama's SOTU address
will feature at least one plug that could benefit BAB and related
Guggenheim Solar (NYSE:
) The Guggenheim Solar ETF is in rally mode Tuesday, surging
nearly four percent. TAN's bullishness is the result of China
again doing whatever it can to support its ailing solar firms,
many of which populate TAN and speculation that some U.S. solar
are considering conversions to MLPs or REITs
As Barron's noted, the latter issue is perhaps more fiction
than reality. However, what is reality is President Obama's
long-standing support, controversial as it may be, of solar
power. Knowing that he does not have to seek election again,
Obama can push an alternative energy agenda in his second
Any language to that effect could mean a near-term pop for TAN
and the rival Market Vectors Solar Energy ETF (NYSE:
iShares Dow Jones US Aerospace & Defense Index Fund (NYSE:
) ITA and other aerospace ETFs have held up well in what has
been a challenging environment for the sector
. First, there was the fiscal cliff debate, at which defense
spending was front-and-center.
That was followed by Boeing's (NYSE:
) Dreamliner woes. Once again, ITA and other aerospace ETFs find
themselves at the center of political wheeling and dealing.
Negative headlines pertaining to the sequestration issue will
undoubtedly hit some ITA holdings, including Boeing, Lockheed
) and Raytheon (NYSE:
The PowerShares Aerospace & Defense Portfolio (NYSE:
) features many of the same holdings as ITA, meaning both ETFs
will be worth keeping an eye on tomorrow.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Gain access to more investing ideas, tools & education.
Get Started on Marketfy, the first ever curated
& verified Marketplace for everything trading.