We keep our ear to the floor so your portfolio can reach new heights. Here's what we heard today - and how you can profit from it.
New Century, New Problems.
The news: Speculation that sub-prime lender New Century Financial (NEW) might file for bankruptcy protection
The word: Tim Strazzini says this is not a huge surprise. The default risk is there and it’s legitimate. Wall Street has exposure here, but Tim says the longer term risk is the loss of revenue as the business slows down. There is no trade now – it was a couple weeks ago, taking advantage of the fear or mania.
Rest of Retail. The Winners as Retail Sales Hit the Street in Force.
The news: Strong monthly sales from key retailers overshadowed weakness, sending markets higher today.
The word: Jeff Macke says if you want to get long on specialty names Zumiez (ZUMZ) is a terrific move. They reported 12% same store sales versus 7% expectations. The name he likes on the short side is Abercrombie & Fitch (ANF). Same stores sales were disappointing there. But take note, Macke says it’s not an investment short it’s a trading short.
Strike The Iron
The news: Steel maker Nucor Corp (NUE) said on Thursday that market conditions are improving enough, with customer stockpiles and imports declining, to boost first-quarter profits.
The word: Guy Adami says he loves this stock. It’s the best run steel company out there with continued pricing power and lower inventories. If you want to be in the “steels” NUE is the name to own.
The news: When the Japanese yen is weak the stock market is strong and when the yen is strong the US market is weak.
The word: Eric Bolling says that’s a function of Treasury Secretary Paulson being in Asia and saying China should continue with their current monetary policy. That’s a change from what he’s been saying in the past. The market calms on the news and the yen carry trade becomes a play again. In other words, traders feel confident and they sell the yen and buy US assets.