Two Ways: Airline Losses Mount
Strengthen your portfolio in good times and bad.
The global airline industry is facing its biggest crisis in almost 60 years: Up to $5 billion in losses in 2009. So says the International Air Transport Association. The figure is almost double the original forecast made just 4 months ago.
According to the New York Times, Chief executive of the Swiss group Giovanni Bisignani said revenues for the industry could contract by 12%. This is twice the level of contraction as the period after the September 11 terrorist attacks. The main reason for such a gloomy outlook: High-end passenger traffic -- specifically first- and business-class passengers -- plunged 16.7% in January, while cargo fell 23.2%.
See Professor Scott Reeves' take in Airlines to Passengers: We Have Not Yet Begun to Gouge You.
From the Bull Pen: After yesterday's historic rally, the equity markets should be taking a breather today. But bulls can still look to plays going against the trend. Baidu (BIDU), for example, is trading higher in the premarkets. Those testing the upside can set a sell stop below $180.
From the Bear Cave: The major equity markets can't have a sustainable rally without the Dow Transportation Index. And as the airlines make up a significant portion of the Transports, bears can look to the Ultrashort S&P 500 (SDS) for a quick trade; a sell stop can be set 2% from entry.
Quick Check Around the World
Asian trading closed with the Hang Seng 3.44%, India 0.50%, Nikkei 3.32%, Taiwan 2.30% and Shanghai 0.56%.
Glancing towards Europe, we see the CAC 0.16%, DAX -0.03%, FTSE -1.30%
As of 8:05 AM EST, S&P Futures are trading -8 to 809, and Nasdaq futures are -8 to 1244.
A Look At Commodities
Crude oil is trading -0.78 to 53.02. Gold is -21.6 to 930.90. Silver is -0.35 to 13.520, and copper -3.85 to 180.25.
The dollar index is +0.330 to 84.2800.
On the Radar
10:00 Housing Price Index MoM
10:00 Richmond Fed Manufact. Index
Click here for the full trading radar.
Good luck, Minyans!
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