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MARKET BUZZKILL: CHINA
Commodities took a hit on Tuesday after latest data out of Beijing showed slower-than-expected growth in China.
Investors took the results as a signal that the world's third-largest economy may be losing its steam.
"China is certainly the global growth engine for almost all parts of the world, especially to the United States. Their macro data is influencing the psychology of investors of all assets here," explains Craig Peckham, equity trading strategist at Jefferies & Co in New York.
Chinese Imports % Change
June-July ‘10
*Iron Ore -6.2%
*Crude Oil -74.3%
*Refined Petroleum Products -30.5%
*Steel Products -8.7%
*Copper, Waste & Scraps -157.8%
*Aluminum, Waste & Scraps -68.4%
What’s the trade?
Looking at these results, if you’re overweight crude , I’d think about moving toward market weight, muses Joe Terranova.
I don’t think this is terribly negative, muses Steve Cortes. I still believe in the emerging markets story; a tell will be whether crude closes above or below $80.
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MARKET BUZZKILL: CHIPS
Chip stocks took a hit on Tuesday, led lower by Intel , which was downgraded by both Barclays to ‘Equal Weight’ from ‘Overweight’ as well as Baird, which cited “a sharp deterioration in PC-related order trends.
Adding to the headwinds, J.P. Morgan analyst Christopher Danely said in a research note that checks with Taiwanese chip suppliers showed a downturn in orders, indicating that deals for personal computers are "falling off a cliff."
"We believe a host of PC companies pushed out orders throughout the supply chain," Danely said, adding that Hewlett-Packard , Acer and Lenovo appear to be among companies that cut their PC orders
What’s the trade?
I think there are a lot of headwinds in this sector, says Jon Najarian. If you have profits in this space, I’d take them and move to the sidelines.
Around $20 I think Intel looks interesting, says Brian Kelly. But I’d also hedge.
Looking at tech more broadly, in a weak tape, I’d get back into Apple , says Joe Terranova.
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Trader disclosure: On Aug 10, 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 (AKAM), (BAX), (FCX), (MOS), (PFE), (SU), (XBI); Cortes owns (CIB), (FCX), (OAS), (QQQQ); Cortes owns Crude Oil; Cortes is short Gold; Cortes is short U.S. Treasuries
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