No. 2 - China Trade: It's Still On
Despite What You Heard, China's Powerful Growth Story Still Intact
Fears that China's economy might slowdown played a large role in the violent sell-off last month. But the calendar has advanced and so have China’s fortunes. Today that nation reports higher-than-expected industrial production. And unlike our Dow, China’s Shenzhen is back to its old highs. What's the best trade, now?
Tim Strazzini reminds the panel that China started the sell-off by talking about reforms in the financial system. The government wants to slowdown the economy to 8% from what Tim calls a ridiculous 10%. But, today’s numbers indicate they’re not going to be able to do that anytime soon.
Emerging market stocks can be risky, Tim says, but China has at least another year before it starts to trend lower. The trade is, when people start talking about a sell-off, the ancillary plays get smoked. (Think copper and the basic commodity materials, even the cellphone companies.) People that are in China as well as people who supply China sell-off indiscriminately and you can buy these names.
Eric Bolling says because China is demanding metals investors should look at metal stocks such as Titanium Metals (TIE) - which he says is a great stock.
Dylan says the some ETF’s are tied to that same concept, with an emphasis on mining.
Jeff Macke agrees that it's a rational play, but he says buyer beware: these are not American companies (many miners are Australian) and are more loosely regulated.
Guy Adami adds if you want to stay at home, United Technologies (UTX) just won a contract to build 111 escalators and elevators for just one subway line in China. The growth there is real, but stay in the states. With non-residential construction exploding, U.S.-based Vulcan Materials (VMC) is another company to consider.
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On MAR 14, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Macke Owns (JWN) Bolling Owns (DIS), (ICE), (NMX), Gold, Silver, Soybeans, is Short S&P Futures, is short Nasdaq Futures, is Short Corn