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Two Ways To Play: Financials Printing Pink Slips

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Strengthen your portfolio in good times and bad.

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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

Economics

10:00 Consumer Confidence: 61.0 cons
10:00 New Home Sales: 520 k cons

Click here for the full trading radar.

Welcome back! 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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