Yesterday markets ended up mixed here in the US, and today futures point to a slightly higher open. In regards to tradeable news, we have the retail sales numbers which the consensus is for 1% (0.6% ex-auto) and business inventories with a consensus number of 0.6%. We will find out exactly how affected the US consumer is by rising gas prices, and markets will trade accordingly.
Looking at Asian markets we see that most are up:
All Ordinaries - up 1.13%
Shanghai Composite - down 0.19%
Nikkei 225 - up 0.09%
NZSE 50 - up 1.08%
Seoul Composite - up 1.13%
In Europe we see green arrows across the continent:
CAC 40 - up 0.75%
DAX - up 0.77%
FTSE 100 - up 0.56%
OSE - down 0.50%
Gap (GPS) has been able to hold above $25, and we feel that this continues to be a bullish story. If the retail numbers are good, that is probably a catalyst to push shares higher and possibly test their highs. Their individual numbers will be far more important, but the company still appears to be a good trading vehicle for playing the recovering economy and consumer spending.
Some are now questioning whether Starbucks (SBUX) has further to run. If that is a question being tossed around, then yes the stock can run higher and will. Bull markets climb a wall of worry and this is worry. When the talking heads start proclaiming that the company can do no wrong and will not fall, then we shall be worried. Until then we remain bullish.
Today we want to look at the Nasdaq QQQ ETF (QQQ). It has been in a steady uptrend now, and recently had a bit of a breakdown. We like technology and feel that this is one of the sectors which will significantly outpace the general market. For those not intimately familiar with tech and the various players, this would be an excellent way to gain exposure, although you should check out the composition to make sure it fits your risk profile (either that it has enough or not too much).
We continue to find the social media companies interesting, but for nothing more than a speculative trade ahead of Facebook's (FB) IPO. We feel that these might be a good way to play off of Facebook's success, and will look to play these names as that IPO draws closer. Zynga (ZNGA) is already back up to testing the $14/share level, so that is one that has bounced back strongly and one of the names on our watch lists. We will share our completed list and reasoning as we get closer, but we would also recommend investors put their own list together in order to profit from one of the biggest IPOs ever.
There is no secret that we like manufacturers, especially those with commodity exposure. Let us add Joy Global (JOY) to our list this morning. We think that the recovering economy will lead to all ships rising, and an increase in order backlogs to help power future growth. With the US coming out of its economic malaise, it should help the developing nations in Asia and South America continue their mining and building expansions.