How To Play China's Move (UUP, XLB, VALE, CSCO, FLR)
February 12, 2010 7:07 PM
China took steps to cool its overheated economy this morning by raising reserve requirements for its banks. This is the second time Beijing has announced plans to raise reserve levels. Now that China is taking some of the easy money off the table, what's the trade to profit in this new environment?
When monetary policy is tightened by central banks, the dollar often rises (NYSE: UUP), while commodities and materials (NYSE: XLB) suffer.
Zach Karabell joined the Fast Money crew on Friday and stated that he doesn't believe these recent events change the fundamental China story. He believes China is a source of enormous economic growth and he wants to "buy what China buys as an economy."
For longer-term picks, Zach likes Vale (NYSE: VALE), a Brazilian metals and mining company, around $26. He is also bullish on Cisco (NASDAQ: CSCO) and Fluor Corporation (NYSE: FLR) around $40.
