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Two Ways To Play: Beige, The Softest Color


Strengthen your portfolio in good times and bad.

The Federal Reserve released its Beige Book today. The report said economic growth was "generally weak" in April and May as consumers were hit with high food and oil prices.

Seven of the 12 Fed regional banks said economic activity was softer in the six-week period. The remaining five districts said it was stable or little changed from April's dismal report.

As for the individual sectors, manufacturing was soft with low demand for housing-related products, but demand for exports did increase. Commercial real estate varied, but residential real estate was weak in all regions. Banks also reported tighter credit standards across most loan categories.

Business contacts said input prices increased, especially for energy related products. Consumer spending slowed due to these high energy prices, and even tourism softened across districts, with lower attendance at Broadway theaters in New York and weaker hotel bookings in Southern California and Hawaii.

From the Bull Pen: Will oil prices continue the uptrend? These bulls didn't panic when the USO pulled back to $100. Other options for a trade may be Rowan (RDC) and Anadarko Petroleum (APC).

From the Bear Cave: The bears are considering downside plays in the housing ETF (XHB). The breakout above the 200 DMA didn't fool them and they believe this stock has a lot more to fall.
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