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Two Ways To Play: US Credit Card Defaults Increase


Strengthen your portfolio in good times and bad.

Capital One Says US Credit Card Defaults Rose

Capital One Financial (COF) said today US credit-card defaults rose in January, a sign that the US consumer remains under stress. In a story by Reuters, the credit-card issuer said the annualized charge-off rate (debts the company believes will never be paid back) for credit cards in the US rose to 10.41% last month from 10.14% in December. In addition, accounts at least 30 days delinquent (a sign of more loan losses to come) also increased to 5.8% from 5.78%.

Statistics were a little bit better in Canada as the charge-off rate went from 9.58% in December to 9.03% in January, but the delinquency rate rose to 6.66% from 6.55%.

From the Bull Pen: This is just another fundamental sign that whatever "recovery" the US will experience will be slow and weak. Recession stocks like General Mills (GIS) still remain in play especially with GIS' 4% dividend. A sell stop can be set below $68 support.

From the Bear Cave: Luxury items are still at risk. Bears looking for a downside play can look to Harley Davidson (HOG) rallying back to overhead resistance at $25. Consider entry if and when with a buy stop above that level.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei +0.19%, India +1.17, Hang Seng (Closed), Shanghai (Closed), and Taiwan (Closed).

Across the pond, we see the FTSE +0.91%, CAC +0.61%, DAX +0.91%

As of 8:00 AM EST, S&P Futures are trading +2.40 to 1081.50. Nasdaq futures are +4.50 to 1787.75.

A Look at Commodities

Over in commodities, crude oil is +1.09 to 75.22 while gold is +22.50 to 1112.30 this morning. Silver is +0.293 to 15.740 and copper +0.0710 to 3.1540.

The dollar Index is -0.1400 to 80.2950.

On the Radar


08:30 Empire State MFG Survey
09:00 TIC Flows

Welcome back, Minyans. Good luck!
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No positions in stocks mentioned.

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