CAT Power?

Reuters reports Caterpillar (CAT) Chairman and CEO Jim Owens said he expects weakness in rich-country economies to persist into 2009, but sales in China will remain strong. Owens said the company was struggling to meet a backlog of order to support the Chinese market with manufacturing operations running at capacity.

The company reiterated its forecast that sales in China would double from $2 billion to $4 billion by 2010 this year even as domestic rivals upgrade their product lines to compete with Caterpillar’s equipment. Shares of the company have fallen nearly 20% since its high in May.

From the Bull Pen: Bulls can consider Joy Global (JOYG). Is the stock breaking its downtrend from June? Sell stops can be set below the 200 DMA ($68.50).

From the Bear Cave: Notice how the July rally in CAT shares failed exactly at the 50% retracement from the May high. A rally back towards the $73-74 level could be an opportunity for a short entry.


Tiffany Surprise

Tiffany (TIF) shares are pushing higher this morning. The company reported second quarter earnings of $0.63 a share, 8 cents better than consensus expectations of $0.55. Revenues rose 10.5% year-over-year to $734 million vs. $720 million consensus.

The company also issued guidance in-line with analysts’ forecasts for FY09; earnings is expected to come in at $2.82 to $2.92 a share which includes global sales growth of approximately 9%. Shares traded as high as 6% to $42 in premarket trading. For context on the consumer, see Professor Kevin Depew’s Five Things You Need To Know.

From the Bull Pen: We’ve previously mentioned AutoZone (AZO) as an upside retail play. Bulls might see another opportunity if the stock can pull back towards the $130 level.

From the Bear Cave: Bears see a downside play if TIF shares can rally to $45. Buy stops can be set above that level.

For more ideas in real time throughout the trading day, check out Minyanville’s Buzz & Banter.


Quick Check Around the World

Asian trading closed with the Hang Seng -2.29%, Nikkei +0.12%, Sensex -1.74%, Taiwan -0.67% and Shanghai +0.34%.

A quick check of Europe finds the CAC -0.05%, DAX -0.25%, FTSE +0.34%

As of 8:15 AM EST, S&P futures are lower by 1 point to 1280, and Nasdaq futures are down 2 points to 1899.


A Look At Commodities

Crude oil is higher this morning, up +1.65 to 119.80. Gold is up +8.60 to 838.70. Silver is up +0.30 to 13.770, and copper is down -2.05 to 345.10.

The dollar index is lower -0.303 to 76.748.


On the Radar

Economics

8:30 Initial Jobless Claims: 432 k prior.
8:30 Continuing Claims: 3362 k prior.
8:30 GDP (q/q): 2.7% cons.
8:30 Personal Consumption: 1.6% cons.
8:30 Core PCE (q/q): 2.1% cons.

Good luck today!