Two Ways To Play: Financials Printing Pink Slips
Strengthen your portfolio in good times and bad.
Taiwan Semi Passing Off Costs
Bloomberg reports Taiwan Semiconductor Manufacturing Company (TSM) is likely to raise prices to counter higher costs. Jason Chen, vice president of worldwide sales marketing, said "Semiconductor companies are under profitability pressure" due in part to surging oil prices and Taiwan's appreciating currency. Chen didn't say when or by how much the company would raise prices. For context on oil, see Professor Jeff Macke's Oil Behaving Like Bubble.
From the Bull Pen: Bulls like TSM's pricing power and should see the profitability pressures decline if oil prices decline. Sell-stops may be set below $10.50 support.
From the Bear Cave: Bears see a downside play in Dell (DELL) with buy-stops above $22 resistance.
Wall Street Gloom
Bloomberg reports financial companies around the globe have made plans to cut more than 83,000 jobs since last July. The cuts amount to approximately 3.3% of employees at the 28 firms announcing cuts which is much less compared to the bear market from 2000-2003. During that period 17% of banking jobs were shed. Analysts believe this is a sign that tougher times are ahead. The Independent Budget Office in Manhattan said last week that it expects 33,300 finance jobs in New York City alone to be cut. So far, 10,000 financial services jobs in New York have been lost since last August. See Professor John Mauldin's The Road to Economic Recovery.
From the Bull Pen: Bulls looking for a financial play can look to Visa (V) with entry near the $75 level.
From the Bear Cave: Bears can continue to play the upside in the Ultrashort financials (SKF) which tracks twice the inverse of the DJ U.S. financial index. Sell-stops can be raised to near the $106-107 level.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed leaning green with the Hang Seng +0.64%, Nikkei +1.48%, Sensex -0.45%, Taiwan +0.81% and Shanghai +0.32%.
Glancing towards Europe we spy mostly red skies with the CAC -0.81%, DAX -0.31%, FTSE +0.05%
As of 8:45 AM EST, S&P futures are lower -1.10 points to 1372, and Nasdaq futures are higher +2.25% to 1961.
A Look At Commodities
Commodities are mixed. Crude oil is higher +0.74 to 132.93. Gold is lower -3.80 to 921.90. Silver is down -0.026 to 18.215, and copper is lower -0.40 to 375.10.
The dollar index is higher +0.074 to 72.061.
On the Radar
10:00 Consumer Confidence: 61.0 cons
10:00 New Home Sales: 520 k cons
Click here for the full trading radar.
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