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Two Ways To Play: IMF Has a Crush... On Obama's Economic Plan

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Strengthen your portfolio in good times and bad.

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Obama Fever

The top economists at the International Monetary Fund are largely endorsing President-elect Barack Obama's economic stimulus plan. According to the Wall Street Journal, the plan will cost somewhere between $675 billion and $775 billion, and many believe the money will be spent largely on construction and infrastructure projects. A temporary tax cut of as much as $1000 for middle-income families may also be included.

But the IMF isn't arguing for broad cuts in corporate taxes, dividends and capital gains (a Republican favorite) because they will likely be "ineffective" due to low profits. It's also warning against bailing out the nation's auto companies, as this could spark a trade fight -especially if other nations try to match the actions of the US.

For more on the months ahead, see Professor Satyajit Das' Debt Comes Home To Roost.

From the Bull Pen: Bulls can look to Jacobs Engineering Group (JEC). A sell stop in the near term can be set below the gap fill (near $42).

From the Bear Cave: Equity prices could be carried higher during the month of January. But bears view this as a counter-trend move. A rally in Time Warner Cable (TWC) to the $22 to $23 level could present a downside opportunity. If and when.


Quick Check Around the World

Asian trading closed with the Hang Seng -0.65%, Sensex 1.92%, Taiwan 3.91% and Shanghai -0.95%.

Glancing towards Europe, we see the CAC 1.06%, DAX 1.94%, FTSE 1.07%,

As of 8:15 a.m. EST, S&P futures are trading +6 to 876.60, and Nasdaq futures are +9 to 1185.


A Look At Commodities

Crude oil is trading -0.61 to 39.41. Gold is -3.7 to 871.60. Silver is -0.20 to 10.790, and copper is -1.550 to 129.60.

The dollar index is +0.265 to 81.790.


On the Radar

Economics

09:00 S&P/CS Composite 20 YoY -17.8%
09:45 Chicago Purchasing Manager 33.
10:00 Consumer Confidence 45
02:00 S&P CaseShiller Home Price

Click here for the full trading radar.

Good luck and have a great day!

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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.

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