Solid Week for the Markets

With the Obama administration sworn into office and their stimulus bill already past one house of congress and close to passing in the Senate, the US stock markets rebounded nicely off relative lows this past week. If the markets can break higher the first part of this coming week, a bottom formation will be in and the markets could rally for a longer period of time.

Administration Makes Moves

The new administration made two very good moves since coming into office, the first is the new stimulus bill which will likely pass as the Democratic Party now controls both the legislative and the executive branch of government. And the administration is developing a new way to use the $350 billion left from the original bailout bill that passed during the Bush Administration. The new Treasury Secretary Timothy Geithner is going to make more details known about the use of the bailout funds on the 10th after the stimulus plan is through congress. The administration appears to be more in tune with the needs of the banking system and will put out a plan that has more controls than the previous administration's plan.

Banks and Agriculture Chemicals Rally

A number of industries rallied strong this past week including Banks and Agriculture Chemicals. Regional Southwest Banks moved higher as an industry 11% on Friday alone while Money Center Banks rallied 11%. Regions Financial (RF) was a bigger winner jumping 48% from near bankrupt levels to $4.20 a share. Bank of American (+26%), Wells Fargo (+17%), Keycorp (+16%), Suntrust Banks (+16%) and JP Morgan Chase (+12.5%) all moved higher on Friday with the news of the new bailout and stimulus package on tap. Shares of Agricultural Chemical companies like Mosaic (MOS), Monsanto (MON), Potash (POT) and Agrium (AGU) all rallied in the second half of the week on earnings strength and pricing power.