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Two Ways To Play: Honda Keeps Engines Running


Strengthen your portfolio in good times and bad.

Foreclosures More Than Double

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!
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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