Four Major Developments that Flew Under-the-Radar Due to the Fiscal Cliff

Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

The debates and coverage of the fiscal cliff has captivated our nation. Americans understood the importance of the bill, as it was truly an event that could’ve affected everyone. Now that a bill has been passed, it is time to look forward to other issues and focus on the growth of the economy. However, while the talks surrounding the fiscal cliff were stealing our attention, there were other major developments occurring. Here’s a look at a few important developments that you might have missed; that would’ve otherwise been important if not for the fiscal cliff.

  • Ford (NYSE: F) announced on Monday that it will sell 2.2 million vehicles in 2012. The company added that its Ford Focus is on pace to be the year’s best-selling global nameplate; with the F-Series and Fiesta in the top 10. While the data surrounding the Focus, F-Series, and Fiesta are company related, the strong sales data impacts the industry. General Motors and Ford see similar trends; therefore strong sales are an indication of continued strength for GM as well. Furthermore, strong auto sales bode well for outside companies such as The Goodyear Tire & Rubber Company and Sirius XM among many others.
  • A $10 billion settlement with regulators was reportedly reached with 14 banks regarding abusive foreclosures and excessive charges. The five banks who have already agreed to pay $26 billion in another deal earlier this year will also be included in this new settlement: JPMorgan, Bank of America, Wells Fargo, Citigroup, and Ally Financial. While this affects the entire industry, I specifically want to mention Bank of America (NYSE: BAC), who is among the most sued companies in the world. The company also announced the distribution of a $335 million settlement on Monday regarding compensation for discrimination by Countrywide. Settlements of this size are by no means good for the banks, but might go a long way in cleaning up the lending process for consumers.
  • Speaking of banks and financial institutions, Warren Buffett’s Berkshire Hathaway (NYSE: BRK-B) looks ready to enter the solar industry. Its subsidiary, MidAmerican Energy, has agreed to purchase two solar projects in California from SunPower. Supposedly, the two combined projects would create the world’s largest permitted solar photovoltaic power development. Therefore, Berkshire looks ready to make a pretty big bet on the future of solar. Therefore, with Warren Buffett on board, some might be ready to ask if it’s time to buy solar?
  • All casino stocks are outperforming the market on Wednesday as both casino revenue and traffic looks to be on the rise. Analysts have already begun to express their belief that Las Vegas Sands (NYSE: LVS) is best positioned to benefit from this gain. Most believe the company's presence in Nomura combined with new smoking restrictions in that region will benefit the company. However, the news itself is significant for the industry because casinos are a luxury and it means that either A) Americans have more disposable income or B) consumer sentiment/fears regarding the fiscal cliff were not as severe as previously considered. Either way it may bode well for other industries such as retail, airlines, etc. that benefit from an economy that is willing to spend money. This will be something to monitor over the next several weeks and months.

Due to the continuous coverage and fears surrounding the fiscal cliff, we have in some ways neglected other important news. The four developments above could have industry changing effects, and could impact certain companies. I think that each of the developments above are worth monitoring over the next several months; as the companies effected might see significant stock movement in the year that lies ahead. 

BrianNichols owns shares of Ford. The Motley Fool owns shares of Bank of America and Ford. Motley Fool newsletter services recommend Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus