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Two Ways To Play: MasterCard's Master Quarter?


Strengthen your portfolio in good times and bad.

California Signals Housing Bottom?

Bloomberg reports, California, which led the U.S. into the worst housing crisis since the Great Depression, may be the first to find a bottom. Data provided by PMZ Real Estate Corp showed that home sales in Stockton, the metro area with the highest foreclosure rate, more than doubled in 2Q.

Sales rose for three consecutive months starting in April across the state, said the California Association of Realtors, and about 40% of those transactions were foreclosure sales. See Professor Andrew Jeffery's column Housing Inventory Eases, but No Recovery in Sight.

From the Bull Pen: If bulls were to look for housing exposure, Meritage Homes (MTH) could be an option. Sell-stops could be set below $16.20.

From the Bear Cave: Housing bears remain skeptical and can fade (read: sell) the rally in the real estate ETF (IYR) into its 200 DMA ($65.50).


MasterCard (MA) reported results for its second quarter. The world's second largest credit-card company said net income came in at $2.11 per share vs. $2.02 consensus. Revenues rose 25% year-over-year to $1.25 billion vs. expectations of $1.21. Worldwide purchases volume was up 14.0% in the quarter and gross dollar volume was up 12.8%. But the company posted a $746 million loss on expenses to settle an antitrust suit with American Express (AXP). Todd mentioned MA earlier this week in Monday Morning Quarterback.

From the Bull Pen: Could Visa (V) be the better play? The company beat expectations last night and broke the intermediate downtrend that began in June. One could consider sell-stops below the $75 area.

From the Bear Cave: A better downside play might be in Discover (DFS). With the thesis in mind that the stock could retest its 52 week low, a rally to near the $16 area might have them initiating a starter position.

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 +0.18%, Nikkei +0.07%, Sensex +0.48%, Taiwan -0.65% and Shanghai -2.15%.

A quick check across the pond finds the CAC +0.78%, DAX +1.00%, FTSE +0.45%

As of 8:30 AM EST, S&P futures are lower -6.40 points to 1278, and Nasdaq Futures are down -7.5 points to 1848.

A Look At Commodities

Commodities are higher. Crude oil is lower -0.87 to 125.90. Gold is up +4.70 to 907.60. Silver is off -0.010 to 17.460, and copper is up +3.70 to 371.65.

The dollar index is down -0.103 to 73.223.

On the Radar


GDP Q/Q: 1.9% vs. 2.3% cons. Prior revised to 0.9%.
Personal Consumption: 1.5% vs. 1.7% cons.
GDP Price Index: 1.1% vs. 2.4% cons.
Core PCE Q/Q: 2.1% vs. 2.0% cons.
Employment Cost Index: 0.7% vs. 0.7% cons.
Initial Jobless Claims: 448k
Continuing Claims: 3282 k

9:45 Chicago PMI
10:00 NAPM-Milwaukee

Click here for the full trading radar.

Happy Thursday! Good luck!
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No positions in stocks mentioned.

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