Seeking Alpha
Long/short equity, special situations, momentum, growth
Profile| Send Message|
( followers)  

Markets around the world are higher today, and that is good news in our book. We are extremely bullish here, having our portfolio about 125% invested, so up days feel far better than down days. In Asia, we see Shanghai is the only one red, with everyone else we follow showing green. Most impressive is Korea up 1.33%, Taiwan up 2.04% and Jakarta up 2.09%. The exporters are surging, which leads us to believe that the world is entering upon a new economic expansion phase on the back of America.

Europe was all green on our screen until just recently when the FTSE 100 turned marginally red. We still see the CAC 40 (up 0.25%) and the DAX (up 0.43%) higher. Europe will have growing pains and as the euro strengthens it shall face further headwinds.


Looking at US markets we once again are drawn to US Bancorp (NYSE:USB) which is near a 52-week high and, in our opinion, is one of the best baking franchises out there. We have profiled the company before but today are drawn to it due to the improving economy and what appears to be a rebounding in housing. The bank has expanding its footprint since the 'Great Recession' and we believe this will only add oil to the fire as the lending business turns around.

If the housing market is truly turning around we are also interested in BB&T (NYSE:BBT) and Regions Financial (NYSE:RF). BB&T is one of the nation's best run and best capitalized banks and firmly positioned to benefit from a rebound in housing, especially in the Southeast's two hardest hit markets of Florida and Georgia. We find Regions more a leveraged play on this recovery, where history tells us that the less healthy players benefit the most from earnings ramping up more from the trough to the high.


We exited out of one of our biotech trades a few sessions ago with about 40% gains. The stock was Biocryst Pharmaceuticals (NASDAQ:BCRX) and we got extremely lucky with the news on a Hepatitis C drug rather than the news on a spread of the bird or swine flues in Asia, Europe or North America. Never one to look a gift horse in the mouth, we took the gains and left the trade. At these levels we are not interested in once again entering the trade without further news about the spread of flu, so this is now on the backburner.


Starbucks (NASDAQ:SBUX) is one of those plays on the economy one has to love. As the economy picks up steam, consumers gravitate towards the $4 latte. We are guilty of this pleasure, as are many of our colleagues. We have watched as the stock seems to be basing, and think this is worth a look to move higher. From a commodity perspective, the company has been able to pass on rising costs to consumers, and absorb some of those themselves via cost cutting measures, so we are not overly concerned about the drag on the company that underlying commodities may have.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Today's Market: Playing The Economic Recovery