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Two Ways To Play: US Credit Card Defaults Increase

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Strengthen your portfolio in good times and bad.

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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

Economics

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

Welcome back, Minyans. Good luck!
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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