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Two Ways To Play: Toyota Hits the Breaks

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Strengthen your portfolio in good times and bad.

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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

Economics

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.

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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