Two Ways To Play: As The World Slows, Starring HSBC
Strengthen your portfolio in good times and bad.
HSBC Hurt by Emerging Markets and U.S.
According to Bloomberg, HSBC Holdings (HBC) reported a nearly 30% drop in profits for the first half and said emerging markets may grow at a slower pace this year. Europe's biggest bank by market value said net income came in at $0.65 a share beating analyst expectations. But the company gave a glum outlook on Asia saying corporate activity in some sectors is slowing with demand for equity-related products falling.
HSCB also reported a pretax loss of $2.9 billion in North America while reporting an 85% increase in consumer bad loan charges and other provisions. See Professor Bennet Sedacca's Fishing For Bailouts.
From the Bull Pen: Those bullish HBC can use this weakness as an opportunity. The double bottom near $70 was a healthy sign. Fading (read: buy) the stock into the $77-75 range can be an option.
From the Bear Cave: Those bearish on the emerging markets can use the ETF (EEM) for a downside play. A rally towards the $45-46 range could get them interested.
Nike Addresses Abuse Complaints
The Wall Street Journal reports Nike (NKE) said it has addressed worker-abuse problems in one of its factories in Malaysia. The company has completed an initial investigation into various claims. In some cases workers had their passports confiscated by managers while some had their wages garnished. Further, Nike said it found the majority of housing for employees was in "unacceptable" conditions. The company said all workers will be transferred to new Nike-inspected housing within a month. Professor Bennet Sedacca mentioned Nike in 25 Reasons To Remain Cautious.
From the Bull Pen: In the retail space, the play continues to be Wal-Mart (WMT). Sell-stops can be set below $55.
From the Bear Cave: A PR nightmare is the last thing this company needs given the current economic conditions. Nonetheless, bears can fade (read: sell) the slow crawl back into resistance. Buy-stops can be set in the $62-63 range.
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 -1.52%, Nikkei -1.23%, Sensex -0.54%, Taiwan -0.36% and Shanghai -2.14%.
A quick check towards Europe finds the CAC -0.06%, DAX -0.29%, FTSE +0.23%,
As of 8:40 AM EST, S&P futures are lower -4 points to 1256, and Nasdaq futures are off -8 points to 1825.
A Look At Commodities
Commodities are lower. Crude oil is down -0.89 to 124.24. Gold is lower -9.40 to 899.60. Silver is off -0.225 to 17.295, and copper is lower -7.85 to 355.00.
The dollar index is up +0.002 to 73.431.
On the Radar
Personal Income: 0.1% vs. -0.2% cons.
Personal Spending: 0.6% vs. 0.4% cons.
PCE Deflator (y/y): 0.3% vs. 0.2% cons.
PCE Core (m/m): 2.3% vs. 2.2% cons.
10:00 Factory Orders: 0.7% cons.
Click here for the full trading radar.
Happy Monday. Good luck!
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