The next three weeks are going to be very important ones for investors. Nearly a trillion dollars is up for grabs. Smart investors will do all they can to ensure they get their hands on a piece of the action.

On Monday, President-elect Obama and Nancy Pelosi are scheduled to meet and start formally discussing their plans for a massive stimulus plan. Their goal is to have legislation waiting for Obama when he takes over the Oval Office on January 20.

Current estimates have the total package worth about $675 to $775 billion in taxpayer money. Nearly every industry in the country is lobbying with all its might to ensure they get a mention in the massive measure.

It is time to repay the voters

The next few weeks will look like pigs feeding at a slop bucket. Industry leaders will be pushing through the mud and the waste jockeying for a top spot in the handout line. Already, the steel and the newspaper industries are turning up the volume of their cries for help.

After spending nearly $20 billion to “save” Detroit and $350 billion to “rescue” the banking industry, the nation’s newspaper publishers want to get their hands on a few billion bucks.

Instead of proving that they are vital to the nation’s manufacturing sector and national security, news outlets claim without them, a strong source of free speech and a voice of dissent would be eliminated. Therefore, they are crucial to the health of the country.

Once again, the nation’s newspapers overlook the power of the Internet.

Steelmakers are taking a different route. Knowing that an infrastructure based stimulus would send their revenues skyward, the steel industry is not asking for a check from Uncle Sam. Instead, they demand that Obama’s package have a “buy America” clause is a virtual tariff that forces builders to buy American steel (regardless of the fact that it will be more expensive).

Over the last four months, steel demand throughout the United States has fallen by about 50%, dragging prices down an equal amount. So far this year, the steel industry has fired thousands of American workers. If the situation does not get better, executives promise (or is it threaten) that more cuts are on the way.

Might as well get your share

No matter what Pelosi and Obama hammer out, hundreds of billions of dollars in taxpayer money will be spent over the next 24 months. Much of the cash will flow through the steel industry, making it a prime investment opportunity.

Look at companies like Nucor (NYSE:NUE), United States Steel (NYSE:X), and ArcelorMittal (NYSE:MT) to be amongst the leaders as the stricken industry returns to its feet and runs ahead of the pack.

The steel industry has typically been a strong leading indicator for the American economy. Thanks to help from Washington, it will gain a leadership position once again, whether it deserves it or not.

Source: Who Is Next For The Easy Money

This from Smart Profits Report:

Six weeks from today, Barack Obama will take the oath as 44^th president of the United States.

Since his election victory, the more he’s said about “getting to work immediately” and having “no time to waste,” the more I think the inauguration ceremony will be a time-consuming inconvenience, distracting him from fixing America’s problems!

One key area in which he’s pledged to spend his way out of the mire is by tackling the country’s aging and rapidly deteriorating infrastructure. He plans to make the largest investment to repair and upgrade the country’s public works systems since Dwight Eisenhower spearheaded the nationwide interstate highway system in the 1950s.

In short, this means utility industries like electric and water will receive huge cash infusions. Roads and bridges will be repaired and rebuilt. Schools will be modernized, part of which will include improving Internet access to a nation that ranks 15^th in the world in broadband adoption. Energy efficiency, particularly in government buildings, will be increased. The healthcare industry will make greater use of technology to streamline and computerize medical records to cut costs.

That’s the plan anyway. And Obama says it will create 2.5 million jobs by 2011. But we want profits. Read on to find out how you can grab some…

It’s The Economy, Stupid… Six Weeks Away From $500 Billion Rescue Plan

Obama’s economic brain trust is currently “busy working, crunching the numbers… to determine what the size and scope of the economic recovery plan needs to be. But it’s going to be substantial.”

Kinda vague right now, I know. But early estimates put the economic recovery bill at $500 billion. In terms of infrastructure upgrades, 5,000 road and bridge projects could get underway immediately after Obama puts his autograph on the bill.

Here are some investments that could revel in the building boom…

Brick By Brick… Bridge By Bridge

When the U.S. infrastructure sets to have a sweaty wad of cash lobbed in its direction, construction firms are lining up to grab a share of the spoils, as the need for equipment and raw materials rises.

Appropriately, we start in Obama’s home state of Illinois, which is also home to the world’s largest manufacturer of construction and mining equipment, engines, and industrial turbines. Founded in 1986 and based in Peoria, Caterpillar (NYSE:CAT) has shot up from $37 to over $43 over the past five trading days, as it feeds off the infrastructure buzz.

One of Caterpillar’s fellow Illinois-based construction equipment manufacturers, Deere & Company (NYSE:DE), could also be set to extend a share price boost that has seen the price surge from the upper $20s on November 20 to over $38 today.

If you want a more diversified way to play the industrial and construction sector, take a look at the ETF, the Industrial Select Sector SPDR (NYSE:XLI). ETF’s are a smarter investment choice in a rollercoaster market; our Guest Editorial on Good ETF Investments tells us why.

On the engineering front, head west and look no further than California’s Jacobs Engineering Group (NYSE:JEC), which is the largest publicly traded engineering firm in the U.S. The infrastructure love is spreading across the sector, as the stock shot up today on news that it has secured two more contracts…

1. A five-year, $17.5 million contract from the Peninsula Corridor Joint Powers Board (JPB) that will see Jacobs serve SamTrans and the San Mateo County Transportation Authority (SMCTA) agencies to work on three programs. This includes project management, scheduling, budget management, and more.
2. A contract from Pima County, Arizona to provide project management and construction inspection services for the Ina Road water reclamation project. Construction costs here will total about $200 million.

Jacobs pulls in a whopping $11 billion annually and employs more than 57,000 workers – a number that could grow under Obama’s bold plan.

And speaking of water, if you’re looking to cash in on this critical industry amid a surging global population, increasing pollution, and a depleting, finite amount of water resources, check out leading firm Watts Water Technologies Inc. (NYSE:WTS) or the sector ETF, PowerShares Water Resources (NYSE:PHO), which tracks the price and yield performance of the Palisades Water index.

Be sure to also pay a visit to our own free Smart Profits Report research section, where you can read much more about the water problems facing the world – and the vast profit potential that the industry holds. We’ve got two in-depth (pun intended) water reports up there. An earlier issue titled, The Water Industry analyzes how the economics of this increasingly scarce commodity are shaping our world.

Get Raw

On the raw materials side, several firms spring to mind as potential winners of the Obama Infrastructure Initiative (I just made that term up). And as Jim Cramer might say, they’re “best of breed” in their industries.

Cement: South of the border – in Garza Garcia, Mexico, to be exact – you can find Cemex (NYSE:CX), a world leader in producing, distributing, and selling cement. And when it comes to infrastructure rebuilding and repairs, you don’t get many more commodities more important than this one. Its market cap of almost $8 billion is evidence of this.

Steel: Talk about a liftoff. U.S. Steel Corp. (NYSE:X) shares have surged from the mid $20s on November 20 to a current price around $37, having enjoyed its biggest daily jump in almost 20 years on Monday.

Copper: Its 52-week high on May 21, 2008 was $127.24. Its price now sits around $20. Quite a slump for what is the largest publicly traded copper producer, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX). You can blame the prolonged commodities sector slump for that, in addition to the stock market’s woes. But in an Obama-fueled infrastructure rebuilding rampage, I’m betting on a resurgence here.

Aluminum: Go large. The leader here is Alcoa Inc. (NYSE:AA). Like FCX, Alcoa has endured a rocky year. Having traded at a 52-week high of $44.77 in May, the stock market’s tank job has whipped this stock into submission. Shares are currently trading around $9.50 and with a 0.37 PEG ratio (Price/Earnings-to-Growth), the market thinks it’s ridiculously undervalued.

The bottom line here is that companies like these could all stand to profit from a huge ramp up in infrastructure spending. What’s more, they’re all solid, well-established, industry-leading firms in strong cash positions, doing business in areas where there are clear, critical needs. If you’re looking for outperformers, infrastructure stocks are set up well for 2009.

Source: From Eisenhower To Obama… The Firms Poised To Cash In On The New U.S. Infrastructure Revolution

US steelmaker Nucor (NYSE:NUE) took a thumping along with the rest of the sector. Shares are down 18% for the year, dropping 42% from their peak for 2008.

However, Money Map Report editor Horacio Marquez reckons Nucor’s “terrific fundamentals” mean its shares are poised for big gains. He says, “all the technical indicators … point to a massively oversold condition in Nucor’s shares.”

Shares of the Charlotte, N.C.-based Nucor could not escape the carnage and have endured an even bigger swing: From their low of $50.30 a share in early January, the shares of the No. 1 U.S. steelmaker soared 66% to a trade at a high of $83.56. From their peak, Nucor’s shares have declined 42%, closing Friday at $48.45. They’re down 18% for the year.

This sell-off came on the heels of spectacular second-quarter earnings, where earnings per share jumped 70% to $1.94 a share on the back of major strengthening in global steel prices. The disappointment came from a charge to inventory and forward-looking guidance of $1.80 to $1.85 a share, which was below Wall Street’s expectation of $1.91 a share.

Nucor remains one of the most admired companies in the steel sector, thanks to its superb management, ability to innovate, unquestionable leadership in the mini-mill steelmaker sector, and its disciplined business model.

Wall Street has soured on the overall steel sector. Just last Thursday, investment banking giant Goldman Sachs (NYSE:GS) downgraded the sector from “Attractive” to “Neutral.” It maintained its “Buy” rating on both Nucor and United States Steel (NYSE:X), but removed the latter from its “Conviction Buy” list.

The million-dollar question is this: Are we trying to catch a falling knife, or are we poised to capitalize on a superb buying opportunity? Unlike most cases, in which a good argument can be made either way, the answer here is very clear-cut.

Indeed, the situation with Nucor’s shares stands as an interesting case study of how Wall Street – and the financial markets in general – can overlook the profit opportunities that are then left for us to discover. In this case, in fact, Nucor may actually have created the profit play.

Let me show you just what I mean.

Among other peculiarities of Goldman’s shift in opinion, coming after such a spectacular decline – where sector coverage was transferred from one analyst to another – was the investment bank’s recognition that the “valuations of some of these stocks reflect a doomsday scenario, which we believe is not what longer-term fundamentals suggest.”

I could not agree more with this last assessment.

You see, I have been calling my many contacts at hedge funds, on Wall Street, and with local businesses in New York, Brazil and even China to find out exactly what the global situation is with respect to steel demand, and steel prices.

Yes, here in the United States, car sales of 13 million are a temporary disaster. But the needs in terms of infrastructure are huge. And construction of condos, which seemed doomed not so long ago, will reignite pretty soon.

Prices in the real-estate bubble areas have collapsed, and lenders have taken already huge losses. Multi-billion-dollar funds, which had been waiting up to three years to start deploying their capital, are starting to invest, and are buying entire buildings at discounts of as much as 50 cents on the dollar. And even the noted doomsday prophesier – PIMCO manager William H. “Bill” Gross – recognizes that investing in distressed mortgages represents an interesting investment opportunity.

Indeed, this is actually an understatement: When you are one of the only bidders in the market, and the banks are forced sellers, you can name your price.  And current prices of distressed mortgages have incredible discounts to the financial model prices in normal conditions, guaranteeing great returns for buyers.

These and other de-leveraging sales and recapitalizations are ultimately cleaning up the balance sheets of banks and allowing them to return to and resume their regular and profitable bread-and-butter lending business.  Non-residential construction and other steel-consuming manufacturing have barely slowed down – and in some cases are actually increasing due to strong export growth.

No wonder the U.S. economy grew at a 3.3% clip in the second quarter. The August payroll numbers indicate that it is growing at 2% or more, without counting the effect of the fiscal stimulus.  The relatively weak – but by no means recessionary – job picture guarantees that interest rates will remain on hold (at current low levels) for quite some time, helping the U.S. economy out of the temporary slump.

On the international front, my conversations with locals and other business reports I reviewed present a mixed bag for steel prices: Let’s take a look at the steel outlook in key markets around the world.

• In Brazil, there is an imbalance between the supply and demand for slab steel that will take five years to fill.
• China has slowed a bit – reaching high single-digit rates – due to the shutdown of factories and electricity in the major cities. But this was temporary, part of an overall strategy intended to clean the air and reduce overcrowding for the Summer Olympic Games. But all these activities are being restarted, even as we speak. China’s energy needs keep growing exponentially, which bodes well for the demand for steel for the new power plants. Out in China’s provinces, these needs are even more critical today, demanding that the construction of new plants and transmission lines – all of which require steel – get under way immediately. China’s Baosteel Group Corp. barely reduced prices to deal with its temporary oversupply. Japan and India did the same.
• The Middle East slowed down construction for the summer, as usual, given the high temperatures and other seasonal factors.  But South Korea’s steelmaking leader, POSCO Ltd. (NYSE:PKX), a favorite of U.S. investing guru Warren Buffett, saw no need to reduce prices. And Germany’s Salzgitter AG actually has increased prices, despite all the news about a supposedly slowing economy.
• And while India’s economy has seen its growth slow to a still-robust annual pace of 7% to 8%, new steel mills are being planned in order to be able to keep up with that country’s massive infrastructure needs, for which no slowdown is seen.
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