Before The Bell: UBS Cuts Chips and Phone Sales; Caterpillar Focuses on the East
Revenues from semiconductors and mobile phones are expected to decline. Caterpillar is claiming its stake in Asia.
According to Bloomberg, UBS cut its estimates for global chips and mobile phone sales due to slowing consumer demand. Revenue in the semiconductor industry will rise 4% to $273 billion versus previous projections of 7%. Mobile-phone sales will grow 2%, half of what was previously expected. In addition, UBS stated average semiconductor prices will likely drop 5% this year compared to prior expectations of a 2% decline based on excess supply driving down memory chips by more than 40%. For some context in the tech sector, read Professor Jeff Cooper's Instant Karma Silences The Wolves.
From the Bull Pen: Just yesterday, shares of Nokia (NOK), the world's largest maker of mobile phones, moved higher after its CFO said it hasn't been hurt much by a U.S. slowdown. Bulls can play the upside with sell-stops set below $30.
From the Bear Cave: Bears can look elsewhere in the tech space with a downside play in Multi-Fineline Electronix (MFLX); buy-stops can be set above yesterday's high ($21).
Caterpillar Focuses on the East
According to the WSJ, Caterpillar (CAT) will take a majority stake in joint venture Shin Caterpillar Mitsubishi (SCM) in a transaction with Mitsubishi Heavy Industries that is valued at $500 mln. The deal will increase CAT's stake from 50% to 67% and will also give Caterpillar the option of redeeming the remaining shares owned by Mitsubishi Heavy, exercisable after five years. The move is seen as Caterpillar's latest attempt to increase its presences in Asia and Russia where there has been strong demand for Caterpillar's machinery. Professor Quint Tatro mentioned Caterpillar recently in his column Pioneers of Global Marketplace Head East.
From the Bull Pen: Those bullish on Caterpillar can play the upside with sell-stops below $75.
From the Bear Cave: Bears can play the downside in Terex (TEX). Buy-stops can be set above $68, or $70 for those with a higher risk profile.
Quick Check Around the World
Asian trading closed with the Hang Seng +0.68%, Nikkei -0.30%, Sensex -0.81%, Taiwan -0.31% and Shanghai -0.63%.
Looking towards Europe, we find the CAC -0.57%, DAX -0.39%, FTSE -0.69%.
As of 8:30 AM EST, S&P futures are lower by -5.7 points to 1345, and Nasdaq futures are down by -7 points to 1818.
A Look At Commodities
Commodities are stronger. Crude oil is higher +1.13 to 102.35. Gold is up +11.40 to 946.40. Silver is lower -0.007 to 17.755 and copper is higher +4.45 to 369.95.
The dollar index is lower -0.536 to 71.740.
On the Radar
MBA Mortgage Applications: 48.1% vs. -2.9% last week.
Durable Goods Orders: -1.7% vs. 0.7% cons.
Durable Goods ex trans: -2.6% vs. -0.3% cons.
10:00 New Home Sales: 576 k cons
10:00 New Home Sales (m/m): -2.1% cons
Click here for the full trading radar.
Happy Hump Day. Good luck!
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.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter