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Two Ways To Play: Toyota Hits the Breaks


Strengthen your portfolio in good times and bad.

Toyota Cuts Sales Target

Reuters reports Toyota Motor (TM) cut its global sales target for 2008 by 3.6 percent to reflect a slowdown in the US. Shares fell 1.3% in Tokyo, but analysts say the revised figures were within expectations. Although the situation in the US and higher input costs are negative factors, analysts believe the bigger factor is the yen which was at a more favorable level than the Japanese carmaker had expected. The world's biggest automaker now expects to sell 9.5 million vehicles globally.

Toyota will announce first-quarter results on August 7. See Professor Scott Reeves' Automakers Offer Whosits, Whatsits Galore.

From the Bull Pen: Is the selling overdone? Is Toyota a buy off of the $84-85 level? Bulls willing to test the upside can set sell-stops below that level.

From the Bear Cave: Bears can look to Honda (HMC) for a downside play with the thesis that $32 support will again become resistance.

J&J Booms

Bloomberg reports Johnson & Johnson's (JNJ) second-quarter earnings jumped 8%, beating analysts expectations as sales on consumer products helped the company overcome declining drug revenue. The world's largest maker of health-care products said earnings came in at $1.18 per share on revenues of $16.45 billion. That beat expectations of $1.12 per share on revenues of $16 billion. CFO Dominic Caruso said sales of Listerine mouthwash, Zyrtec allergy pills and other consumer products were immune to the "sluggish" U.S. economy. Further, Caruso said new drugs will be approved in the next two years to help offset losses to generic copies of older prescriptions. The company also increased its sales forecast for 2008 earnings to $4.45 - $4.50 per share, up from the $4.40 - $4.45 it predicted in April.

From the Bull Pen: Bulls can play the upside in JNJ should the stock break above $68 resistance. Sell-stops can be set below.

From the Bear Cave: Bears might see a downside in Eli Lilly (LLY); Buy-stops can be set above $50.

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 +0.23%, Nikkei +0.05%, Sensex -0.79%, Taiwan -1.81% and Shanghai -2.65%.

A quick check of Europe finds the CAC -0.71%, DAX -0.31%, FTSE -1.47%

As of 8:30 AM EST, S&P futures are lower -1.40 points to 1209, and Nasdaq futures are up 2 points to 1801.

A Look At Commodities

In commodities, crude oil is up is lower -1.52 to 137.25. Gold is down -4.60 to 974.00. Silver is lower -0.211 to 18.730, and copper is off -4.00 to 368.20.

The dollar index is lower -0.235 to 71.6333.

On the Radar


CPI (m/m): 1.1% vs. 0.7% cons.
Core CPI (m/m): 0.3% vs. 0.2% cons.
CPI (y/y): 5.0% vs. 4.5% cons.
Core CPI (y/y): 2.4% vs. 2.3% cons.

9:00 Net Foreign Purchases: $115.1 bln prior
9:15 Capacity Utilization: 79.4% cons, 79.4% prior
9:15 Industrial Production: 0.2% cons, -0.2% prior
10:30 Crude Inventories: -5840k prior
14:00 FOMC Minutes

10:00 Business Inventories: 0.5% cons, 0.5% prior

Click here for the full trading radar.

Get over the hump! Good luck!
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No positions in stocks mentioned.

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