Monday, August 20, 2007

S&P 500 And Looking South For Winners

Below is a chart of the S&P 500 Index showing the swings and market levels from last week. After a bounce off of 1382.08 the market rallied off the Fed's rate cut to just about reach the 1453.09 level. Any further rally attempt to the 1476.76 level should be a level for short selling to resume.

Below is the corresponding chart of the Nasdaq 100 Index - NDX.

The currency moves last week were just as wild if not more so that the U.S.stock market. Below shows the move of the Australian Dollar.

As the carry trade has unwound many currency charts look like this. All of this volatility has created some opportunities. Below is a chart of BHP Billiton Ltd. This a company which deals with many of Australia's natural resources. According the CIA Factbook, Australia trades with many of the world's fasting growing economies. Export partners include: Japan 19.6%, China 12.3%, South Korea 7.5%, US 6.2%,India 5.5%. These economies are not going to dry up and go away because of the current financial crisis, so BHP's business is not going to go away.

BHP - BHP Billiton Ltd.

Another area that does not have as much exposure to the sub-prime arena is Brazil. One of the larger banks in the Brazil is Unibanco-Uniao de Bancos Brasileiros S.A, UBB. They have exposure to the growing economy in Brazil, with little exposure to the sub prime lending that has plagued our banks. This could be an opportunity to gain some international exposure at these lower levels.

UBB - Unibanco-Uniao de Bancos Brasileiros S.A

Below are some other stocks south of the border which might be worth further investigation.

GGB - Gerdau S.A.

SID - Companhia Siderurgica Nacional

RIO - Companhia Vale do Rio Doce


BHP - BHP Billiton Limited, together with its subsidiaries, engages in mining, drilling, and processing mineral resources. It operates through seven segments: Petroleum, Aluminium, Base Metals, Carbon Steel Materials, Diamonds and Specialty Products, Energy Coal, and Stainless Steel Materials. The Petroleum segment engages in the exploration for and production, processing, and marketing of hydrocarbons, including oil, gas, and liquefied natural gas. The Aluminium segment explores and mines bauxite, as well as processes and markets aluminium and alumina. The Base Metals segment engages in the exploration for and mining, processing, and marketing of copper, silver, zinc, lead, uranium, and copper by-products, including gold. The Carbon Steel Materials segment engages in the exploration for and mining, processing, and marketing of coking coal, iron ore, and manganese. The Diamonds and Specialty Products segment includes exploration and mining of diamonds and titanium minerals, and fertilizer operations. The Energy Coal segment engages in the exploration for and mining, processing, and marketing of energy coal. The Stainless Steel Materials segment engages in the exploration for and mining, processing, and marketing of nickel. BHP Billiton operates primarily in Australia, South America, Africa, and Canada. The company was founded in 1885 and is headquartered in Melbourne, Australia.

RTP - Rio Tinto plc engages in finding, mining, and processing mineral resources. Its products include aluminum; copper; diamonds; energy products, such as coal and uranium; gold; industrial minerals, including borax, titanium dioxide, salt, and talc; and iron ore. Rio Tinto operates primarily in North America, Europe, Asia, Australia, and New Zealand. The company was founded in 1873. It was formerly known as The RTZ Corporation PLC and changed its name to Rio Tinto plc in 1997. Rio Tinto is headquartered in London, the United Kingdom.

GGB - Gerdau S.A. engages in the production and sale of crude steel and related long rolled products, drawn products, and long specialty products. It offers billets, rebar, merchant bars, wire rod, drawn products, and nails; blooms, slabs, and heavy structural shapes; and structural shapes, medium structural channel, and beams. The company produces steel based on the mini-mill concept from iron ore. It offers its steel products for civil construction, manufacturing, and agribusiness markets in Brazil, the United States, Spain, Canada, Chile, Colombia, Peru, Argentina, and Uruguay. The company, through its interest in Dona Francisca Energetica S.A., operates hydroelectric power plant with a nominal capacity of 125 megawatts located in the state of Rio Grande do Sul, Brazil. The company was founded in 1901 and is based in Porto Alegre, Brazil.

SID - Companhia Siderrgica Nacional (CSN) primarily operates as an integrated steel producer in Brazil. It produces a line of steel products, including slabs, which are semifinished products used for processing hot-rolled, cold-rolled, or coated coils and sheet products; hot-rolled products comprising heavy-gauge hot-rolled coils and sheets, and light-gauge hot-rolled coils and sheets; cold-rolled products, including cold-rolled coils and sheets; and galvanized products consisting of flat-rolled steel coated with zinc or a zinc-based alloy. The company also offers tin mill products, including tin plate, tin free steel, low tin coated steel, and black plate products. Companhia Siderrgica Nacional also mines iron ore, limestone, and dolomite, as well as maintains strategic investments in railroads and power supply companies. The company sells its steel products to customers in Brazil and 71 other countries in North America, Europe, and Asia through its sales force and distributors. CSN was founded in 1941 and is based in Sao Paulo, Brazil.

RIO - Companhia Vale do Rio Doce, together with its subsidiaries, operates as a diversified metals and mining company worldwide. It produces, exports, and supplies iron ores and pellets to the steel making industry, as well as manganese ores and iron alloys, including metallurgical ore used primarily for the production of ferroalloys; natural manganese dioxide used for the manufacture of electrolytic batteries; and chemical ore used in various industries for the production of fertilizer, pesticides, and animal food, as well as used as a pigment in the ceramics industry. The company also produces nickel; copper; platinum-group metals, such as platinum, palladium, rhodium, ruthenium, and iridium; precious metals, including gold and silver; coal; and other non-ferrous minerals, such as kaolin, potash, cobalt, sulphuric acid, liquid sulphur dioxide, selenium, and tellurium, as well as engages in bauxite mining, alumina refining, and aluminum metal smelting operations. In addition, it engages in railroad, coastal shipping, and port handling operations; and provides logistic services, including rail transportation for its mining products, general cargo and passengers, bulk terminal storage, and ship loading services for the company's mining operations and for third parties. Further, the company, through joint venture interests, invests in the aluminum, coal, energy, and steel businesses; and offers hot-rolled steel, cold-rolled steel, galvanized steel, electro galvanized steel, pig iron, steel plates, sheet products, and steel tubes. It also has investments in seven hydroelectric power plants in operation and one under construction in Brazil. Companhia Vale do Rio Doce was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.

UBB - Unibanco-Uniao de Bancos Brasileiros S.A. and its subsidiaries provide financial products and services to individual and corporate customers in Brazil. It operates in four segments: Retail, Wholesale, Insurance and Pension Plans, and Wealth Management. The Retail segment provides various deposits products, including checking accounts, time deposits, and savings account-type products. It also offers secured and unsecured personal loans, short term lines of credit, loans for consumer purchases, auto finance, leasing, and individual lines of credit; and credit lines, account receivable financing, working capital loans, BNDES-funded loans, and leasing for small and medium-sized companies. In addition, this segment offers credit cards, insurance, asset management, payroll, cash management, and Internet and telephone banking services, as well as ATMs and payroll-linked loans. The Wholesale segment provides various products and services, including general and specialized corporate lending, trade finance, derivatives, capital markets, investment banking services, and investment and brokerage services. It also offers project finance, and mergers and acquisitions advisory services to institutional investors and economic groups. The Insurance and Pension Plans segment provides life, auto, health, property and casualty, and extended warranty insurance coverage for individuals and businesses, as well as offers pensions and retirement plans, and certain related products and services. The Wealth Management segment provides fixed income and equity mutual funds to individual customers, as well as manages portfolios on behalf of corporations, pension funds, and private banking clients. As of December 31, 2006, the company operated approximately 7,600 ATMs; and 940 full-service branches. The company was founded in 1924 and is headquartered in Sao Paulo, Brazil. Unibanco-Uniao de Bancos Brasileiros S.A. is a subsidiary of Unibanco Holdings S.A.

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