Two Ways To Play: Honda Keeps Engines Running
Strengthen your portfolio in good times and bad.
Bloomberg reports foreclosure filings in the U.S. more than doubled in the second quarter on a year-over-year basis.
Data from RealtyTrac showed that 48 of 50 states and 95 of the 100 largest cities had year-over-year increases in foreclosure filings for 2Q. Nevada was the state with the highest rate with a 147% annual increase followed by California. Arizona, Florida, and Colorado rounded out the top 5. For more on housing, see Professor Kevin Depew's Five Things You Need To Know.
From the Bull Pen: Drugs might help the bulls get through this environment. Options may include Johnson & Johnson (JNJ), which is breaking out above the $68 level, or Pfizer (PFE), which is breaking its downtrend and has closed above its 50 DMA.
From the Bear Cave: The markets won't bottom until housing falls. A pullback towards the $63-$65 range in the Ultrashort S&P 500 (SDS) could provide bears with an entry.
Hurray for Honda?
Bloomberg reports Honda (HMC) posted an unexpected 8.1% increase in its first quarter profit. Japan's second-largest carmaker said net income rose to $1.7 billion for the quarter ending June 30 above analysts' expectations of $1.14 billion. The company is the only major carmaker to boost sales in the U.S. this year helped by its line of fuel-efficient vehicles such as the Fit. Honda reaffirmed its guidance in April saying net income may fall 18% to 490 billion yen in the full year period and cut its operating profit forecast by 3.1%.
From the Bull Pen: With the thesis in mind that Americans will be fixing up their cars rather than buying new ones, AutoZone (AZO) which is nearing 52 week highs, is an option for bulls. A pullback to the $125 level could present them with an upside opportunity.
From the Bear Cave: As solid as the company is, bears believe Honda shares will fall victim to the effects of the greater macroeconomic environment. If the rally fails at the $36 mark, it will give bears a double-top confirmation.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed with the Hang Seng -1.50%, Nikkei -1.97%, Sensex -3.40%, Taiwan -1.82% and Shanghai -1.55%.
A quick check across the pond finds the CAC -0.23%, DAX -1.00%, FTSE -0.52%
As of 8:25 AM EST, S&P futures are higher +2 points to 1255, and Nasdaq futures are up +7 points to 1826.
A Look At Commodities
Commodities are mixed. Crude oil is up +0.62 to 126.12. Gold is higher +7.00 to 929.30. Silver is lower -0.154 to 17.2546, and copper is higher +0.80 to 368.50.
The dollar index is lower -0.311 to 72.628.
On the Radar
8:30 Durable Goods Orders: -0.2% cons, 0.0% prior
8:30 Durables Ex Transportation: 0.0% cons, -0.9% prior
10:00 U. of Michigan Confidence: 56.6 cons, 56.6 prior
10:00 New Home Sales: 505 k cons, 512 k prior
10:00 New Home Sales MoM: -1.4% cons, -2.5% prior
Happy Friday, Minyans! Good luck and hope you all have a great weekend!
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