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Before The Bell: Nintendo's New Plays; China's Surging CPI


Nintendo wants you to get in shape with Wii Fit. Can China cool its prices?

Morning Perspective: Wii Would Really Like To Play!

According to The WSJ, Nintendo (NTDOY) will announce today plans to ship a new exercise product to the U.S., the Wii Fit, which comes with the Wii Balance Board (a weight-and-motion sensing device). The innovation will debut in May and the company hopes it will get more Wii users exercising using their video game consoles. Further, Nintendo also said it will be launching its online service called WiiWare the same month, which will allow publishers to directly distribute new games over the Internet. Professor Ryan Krueger mentioned Nintendo last quarter in his article Dicks Sporting Goods: A Forgotten Christmas Trade.

From the Bull Pen: Like Professor Krueger, bulls are fascinated by Nintendo's every move. Near-term sell-stops may be set below recent lows ($58). Another option is Activision (ATVI); sell-stops below $24.60.

From the Bear Cave: Bears see Electronic Arts (ERTS) facing resistance at $50. Buy-stops may be set above this level on any downside attempt.

China's Inflation Worries

The WSJ reports China's CPI surged in January by 7.1% from a year earlier. The figure is up from 6.5% in December, exacerbating a problem for Chinese policy makers in the face of a global slowdown and an overheating domestic economy. Although the price increase was the fastest in 11 years, Chinese officials are somewhat comforted that rate of inflation was mainly confined to food, which rose 18.2%. In the last year, the country has raised interest rates six times to combat the surging prices, but economists are mixed on whether policy makers will continue the trend given the slowing global economy. For trading rules in these volatile markets, get a free peek at Professor Jeffrey Cooper's article yesterday, The Invisible Hand.

From the Bull Pen: A play on China lies in the China 25 index (FXI). Sell-stops may be set below $140.

From the Bear Cave:
Bears can use the inverse ETF, the Ultrashort China 25 (FXP). The fund seeks the performance that corresponds to 200% the inverse of the China 25 index. Sell-stops below $80.

For more ideas, see Minyanville's Spotlight Stocks.

Quick Check Around the World

Asian trading closed with the Hang Seng -2.21%, Nikkei -3.25%, Sensex -2.53%, Taiwan -1.62% and Shanghai -2.09%.

Glancing towards Europe, we find the CAC -1.47%, DAX -1.68%, FTSE -1.58%, ATX -0.03%, Swiss Mkt. -1.33% and Stockholm -1.19%.

A Look At Commodities

Commodities are mixed. Crude oil is lower -0.56 to 99.45. Gold is down -4.90 to 921.70. Silver is lower -0.083 to 17.435, but copper is higher +20.40 to 372.50.

The dollar index is higher +0.333 to 76.331.

As of 8:45 AM EST, S&P futures are down -16.30 to 1339, and Nasdaq futures are lower by 23 points to 1757.

On the Radar


7:00 MBA Mortgage Applications: -2.1% prior
8:30 Consumer Price Index m/m: 0.3% cons
8:30 Core CPI m/m: 0.2% cons
8:30 CPI y/y: 4.2% cons
8:30 Core CPI y/y: 2.4% cons
8:30 Housing Starts: 1015 k cons
8:30 Building Permits: 1050 k cons
2:00 FOMC Minutes

Click here for Minyanville's full trading radar.

We're on the hump! Good luck and have a great day!

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No positions in stocks mentioned.

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