GO
Loading...

Halftime: Stronger Yuan Game Changer For Investors?

Stocks rallied Monday after new developments suggested that Beijing may allow the yuan to be revalued. Over the week-end the country's central bank said it would allow 'more flexibility' for the currency.

Although it’s not entirely clear just how much appreciation China will tolerate the news triggered a rally in many commodities and natural resource stocks such as Freeport McMoRan.

That’s because the move should mean the cost of U.S. dollar-denominated commodities that China imports—such as oil, iron ore, copper , coal and platinum—is set to become slightly cheaper for people and businesses based in China.

However it's not blindly bullish for commodities. On the other side of the coin, the cost of dollar-denominated commodities that China exports—such as aluminum and steel—will become more expensive for many buyers.

How should you be positioned now?

Instant Insights with the Fast Money traders

The move between the yuan and the US dollar probably won’t be much of a game changer, says Brian Kelly. I’m much more interested to see how a stronger yuan impacts the euro. That’s largely because a stronger yuan should mean China can afford to buy more goods from Europe.

As a result, it should benefit Europe-based exporters such as Daimler , explains Tim Seymour. In fact it could be bullish for all the European car makers.

Although ore, copper, coal and the related natural resource stocks stocks are rallying now, if China even whispers about a slowdown the stocks could fall precipitously, adds Steve Grasso.

Monday’s Wall Street Journal supports Steve Grasso’s thesis. The paper writes, “no instant sharp revaluation of the Chinese currency should be expected, nor is a one-off revaluation likely. That raises the possibility that commodity prices may ultimately fall back once the euphoria fades."

If the commodities play is too volatile for you, on a related note, Chinese consumers are experiencing more purchasing power and that should benefit Sina, Shanda and other companies tethered to China's consumer, adds Tim Seymour.

For me the way to play the market is to rotate out of small caps and into larger quality names, adds Joe Terranova.

--------

SCHIFF: YUAN MOVE

Peter Schiff of Euro Pacific Capital has been saying for years that letting the yuan float would be a good thing for China and a bad thing for the U.S.

Seems like a good time to check in with this renown bear. Find out what he thinks lies ahead. Watch the video now!

What's the best trade off China's currency rising?
















--------

TECH ROLLED OVER

Tech lost its momentum on Monday with RIM weighing heavily on the sector.

How should you trade it?

Going forward I think RIM will be challenged, speculates Joe Terranova. The area I like in this space is semis.

CALL TO THE FLOOR: JETBLUE

Airlines have significantly outperformed the markets over the last 3 months largely due to moderating crude prices, as well as a renewed interest in business travel.

What should you know before you place your next bet in the sector?

Find out from JetBlue CEO Dave Barger. Watch the video now!

















--------

CALL THE CLOSE

Tim Seymour: I’d stay flat into the close.

Steve Grasso: I think the market will move lower as a whole and I’m a seller.

Brian Kelly Sell equities and buy Treasuries.

Joe Terranova: I’d look at ag and Coke.

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On June 21, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (IPSU), (BX), (PFE), (GMCR), (RSX), (TER), (AXP), (KO), (BMO), (BBY), (DIS), (XCO), (SWN), (AAPL), (IPI), (AGU), (SU), (XOM), (RDS.A), (FXB), (V), (TEVA), (COP), (OXY); Grasso owns (ASTM), (ABK), (BAC), (BGP), (C), (DYN), (JPM), (LPX), (NDAQ), (PRST); Kelly is short (GS); Kelly owns (BP) puts; Kelly owns (FCX) puts; Kelly owns (GLD); Kelly owns (GDXJ); Seymour owns (AA)

For JoeTerranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (AMKR)
Virtus Investment Partners owns more than 1% of (IGE)
Virtus Investment Partners owns more than 1% of (DBV)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLV)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (DRYS)

For Tim Seymour
Triogem Asset Management owns (POT)

For Steve Grasso
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (DHR)
Stuart Frankel & Co and it’s partners own (DYN)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (SYMC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (TRV)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (TBT)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (AAPL)

For Peter Schiff

Euro Pacific Capital owns gold




CNBC.com with wires

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET