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Two Ways To Play: As The World Slows, Starring HSBC

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Strengthen your portfolio in good times and bad.

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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!

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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