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Two Ways to Play: Banks and Legislation Hurting Christmas


Strengthen your portfolio in good times and bad.

Another Tough Christmas

It should be the best time of the year for Target (TGT) and other US retailers. But banks are cutting spending limits to cash-strapped consumers and threatening about $9 billion in holiday sales.

In a story by Bloomberg, Britt Beemer of the polling firm America's Research Group said November and December holiday sales may drop 1.2% to $436.7 billion. If the card companies weren't cutting off the spigot and rejecting more applicants, sales would gain about 0.8% to $445 billion.

Other retail executives say credit card legislation is exacerbating the spending slump as lenders prepare for new rules to take effect in February. The new law bans the practice of raising interest rates when a consumer misses a payment. This is causing many lenders to already tighten up.

For more on retail, see Kristin Graham's Storm Not the Reason for Slipping Sales.

From the Bull Pen: The best plays on the consumer still seem to be credit card plays like Visa (V) and MasterCard (MA). In looking at the charts, it appears business has never been better. Visa pulling back to 83 (20-DMA and the area where it last broke out) may be a long opportunity. A sell stop can be set below that level.

From the Bear Cave: Bears can keep an eye on Macy's (M). The stock has gone through a correction but it's currently encountering resistance at 17.80 (the overhead 50 -DMA). Those playing the downside can set 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 (Closed), India 3.23%%, Hang Seng 1.12%, Shanghai 0.76%, and Taiwan 0.58%.

Across the pond, we see the FTSE 0.81%, CAC 0.71%, DAX 0.43%

As of 8:15 AM EST, S&P Futures are trading +4.75 to 118.75. Nasdaq futures are +6.25 to 1847.25.

A Look at Commodities

Over in commodities, crude oil is +0.51to 74.92 while gold is +0.70 to 1087.20 this morning. Silver is +0.05 to 17.080 and copper +0.029 to 3.1670.

The dollar Index is -0.125 to 78.485.

On the Radar


08:30 Personal Income 0.5% cons.
08:30 Personal Spending 0.7% cons.
08:30 PCE Prices
08:30 PCE Prices- Core 0.1% cons.
09:55 Michigan Sentiment 73.9 cons.
10:00 New Home Sales 440k cons.
10:30 Crude Inventories

Click here for the full trading radar.

Good luck today!
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No positions in stocks mentioned.

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