Will the White House Save the Economy With New Energy Policies?

In just a few hours, President Barack Obama will be delivering the 2012 State of the Union Address. Commonly used by commanders in chief to discuss various foreign and sovereign policies that are crucial to future prosperity, the State of the Union will be one of the key avenues for Obama to win over confused voters.

Although the Address will cover obvious topics such as foreign policy and economic options, rumors have been circulating that Obama will discuss the energy industry. In particular, some believe that Obama will speak about clean energy and other renewable resources to progress energy consumption over the long-term.

If President Obama unveils new government policies that support alternative energy research or even subsidizes research, traders may be able to capitalize on the news. Considering that the world has a limited amount of resources and alternative energy is in its beginning stages, traders may be able accrue significant returns over the long-term.

The alternative energy industry could mean many things for traders. First, traders may be able to capitalize on publicly-traded companies that are in the space, such as First Solar FSLR. Second, traders may be able to develop strategies based on energy commodities like crude oil and natural gas. One thing to keep in mind, however, is that these strategies are completely dependent on Obama's ideas.

The President may come out and talk about alternative energy and may claim that unique sources are required to power the future. If so, crude oil and natural gas traders may view this as negative for the commodities. As some rumors state, Obama may speak highly of natural gas. Some believe that he will portray natural gas as the energy source of the future. If so, natural gas futures will most likely rally.

The US has various options that it could pursue, and even if Obama does not cover alternative energy tonight, it will become important in the future. As such, traders may want to start investigating in small companies that may become large alternative energy providers in the future.

Companies such as Suntech Power Holdings STP, Canadian Solar CSIQ, and SunPower Corp SPWR, are all small companies that have significantly grown over the last few years. If the government decides to subsidize research and development, these companies' margins could increase significantly, improving EPS results and garnering more shareholders. A positive upwards cycle may then be induced for each of these companies.

President Obama's State of the Union Address will be very important for the average citizen as well as traders alike. If Obama outlines a revamped energy sector in the US, jobs and innovation could be spurred and may ultimately jumpstart the US economy. Traders will have to make sure that they are ready for any announcements that Barack Obama has, as any important news is bound to come up unexpectedly.