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Two Ways to Play: Banks and Legislation Hurting Christmas

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Strengthen your portfolio in good times and bad.

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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

Economics

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.

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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