And much of the global recovery will be driven by emerging economies such as China and India, the IMF says. China's economy is expected to grow by 8.5% in 2010 while India should see 6.5%.
If we are staring to turn a corner, how should you trade?
We asked Eugene Profit of Profit Investments, a four-star fund manager. He suggests looking at companies that are already executing in this environment but stand to do even better when the economy turns. Following are his favorite plays:
Profit says UPS should be on your radar as an early-cycle play because it has a strong balance sheet, now. Also, “it has 20% better yield on package delivery than rival FedEx and it’s now at a price point where you can buy it.”
He likes Visa for its long-term growth prospects due to growing e-commerce. “We bough Visa on Wednesday around $59. We think it has about a $70 price target.”
Profit also suggests Blue Nile simply because it’s becoming the go to place for diamonds. “They had 6% revenue growth year-over-year even in this environment.” And no matter what the economy does “people will still get engaged and still get married.”
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Trader disclosure: On July 8th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AA), (AAPL), (BAC), (BX), (EEM), (FXI), (F), (INFY), (SBUX); Seymour's Firm Owns (FCX); Terranova Owns (MSFT), (XBI), (ABT), (OIH), (RIMM), (SUN) ; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman Owns (RIG), (TBT); Finerman's Firm Owns (FCN), (MSFT), (NOK), (PBR), (RIG), (TBT), (WMT), (FLS); Finerman's Firm Owns (BAC) Preferred; Finerman Owns (BAC) Preferred; Finerman's Firm Is Short (BAC), (IYR), (IJR), (MDY), (SPY), (USO)
For Eugene Profit:
Profit Fund (PVALX) Holds (V)
Profit Fund (PVALX) Holds (UPS)