'Fast Money' Recap: Global Godzillas
Stockpickr Staff
07/31/07 - 12:38 AM EDT
The gang on CNBC's "Fast Money" show on Monday saw last week's stock market plunge as a battle between King Kong (financial distress) and Godzilla (global growth). And due to credit problems, King Kong won.
This week, Treasury Secretary Hank Paulson will be in China for trade talks. Eric Bolling is bullish on China and he would own
iShares FTSE/Xinhua China 25 Index(FXI Quote) and
CurrencyShares Euro Trust(FXE Quote).
Guy Adami is bullish on American firms that reap big gains from having global market share like
Hewlett-Packard(HPQ Quote),
Boeing(BA Quote), and
Utek(UTK Quote).
Jeff Macke agreed with Adami that American firms that do business in China is the way to play it. His pick was
Honeywell(symbol Quote), while Pete Najarian was bullish on
United Technologies(UTX Quote),
China Mobile(CHL Quote) and
China Unicom(CHU Quote).
Trash Talk
A potential earnings play this week could be from a sector most investors don't think about. This week, two big garbage companies come out with earnings:
Allied Waste(AW Quote) and
Waste Management(WMI Quote). Guy Adami's favorite pick in this sector is
Republic Services(RSG Quote). Pete Najarian agreed with that pick and also endorsed Allied Waste.
Dealmaking Not Dead Yet?
Last week saw many Wall Street traders predicting that mergers are dead due to higher borrowing costs for private equity firms. But could Corporate America pick up the slack? Pete Najarian thinks deals will continue to close, noting with Roche and
Rural Cellular (RCCC Quote) as examples for this week. He thinks that some firms could be turning away potential deals, but the M&A activity is still alive.
Guy Adami mentioned how Honeywell is buying back stock due to a strong balance sheet. He feels strong balance sheets are bullish for M&A. Jeff Macke believes Nelson Peltz could raise his stake in
Wendy's(WEN Quote). Market speculators took Wendy's stock up 10% after hours on the Peltz rumors. If you're long, Macke would take profits.
The Michael Vick Trade
A big image problem has developed for the National Football League with Atlanta Falcons star quarterback Michael Vick, who's been accused of being involved in funding dogfights.
ESPN analyst Sean Salisbury joined the "Fast Money" crew tonight to chat about this dilemma. Sailsbury believes that the superstar advertising model is dead, and he doesn't feel sorry for Vick if the allegations turn out to be true.
Pete Najarian believes the way to trade it is to buy
Under Armour(UA Quote) because the company doesn't use sports stars in its advertising. He put the blame squarely on
Nike(NKE Quote)for picking Vick to promote products.
Eric Bolling believes pro sports should have one strike and then you lose your opportunities in sponsorships. He kiddingly said the trade here is
Corrections Corp. of America(symbol Quote).
Face 2 Face
The gang took its first viewer email: "I fear that as fast as the emerging markets funds went up this year they will go down just as fast and far more than a 15% pull back in the S&P. Should I sell my emerging market fund and put it all in a money market fund until the storm passes? Do you think the markets will finally have a 10% correction?"
Eric Bolling told the viewer to get out of
iShares MSCI Emerging Markets Index(EEM Quote) if he's scared.
The second viewer email posed a question specifically for Bolling: "Is
Exxon Mobil(XOM Quote) getting killed more so due to the 500 pts the DOW has lost? If the market was flat, what do you think XOM would be trading for?"
Bolling said to get out of refiners and integrated oil. Eric is bullish on oil services and his pick is
Oil Service HOLDRS(OIH Quote). Pete Najarian said he would buy put options as an insurance policy on Exxon.
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Alternative Energy
Oil is closing in on $80 and the crew took a good look at alternative energy plays. Before the bell Monday,
Cameco(CCJ Quote) beat estimates by 13 cents, but the stock turned lower for the day on poor guidance.
Cameco CEO Gerald Grandey appeared to discuss his company's prospects. He was asked about demand, and he said, "As fossil fuels become more expensive people recognize the benefits of nuclear. There's a real buzz about nuclear power these days."
Next, he was asked if as oil moves higher, does demand for his company's products move higher? "Not really, because building a new nuclear plant takes 8 to 10 years. There's more recognition that nuclear has to be a larger component in the future." Grandey stressed that his company is a long-term play especially with thir position in the nuclear energy space.
Eric Bolling said he would only play Cameco and
USEC(USU Quote) for the long term -- like six months. He feels this sector is too volatile for short-term trades.
Pete Najarian was bullish on solar power plays
Sunpower(SPWR Quote),
Cypress(CY Quote) and
MEMC Electronic Materials(WFR Quote) ( WFR). Jeff Macke likes
PG&E(PCG Quote).
Word on the Street
Is it safe to get back into the stock market?
Eric Bolling is bullish on earnings and believes stocks are cheap. Jeff Macke is a seller at 1490 on the
S&P 500, but he feels the market could bounce. Guy Adami believes the market will continue to sell off, but that overall, it looks good.
Pete Najarian doesn't believe market players are as nervous as they were late last week. Chip stocks were some of the best performers om Monday. Pete Najarian is bullish on the wireless sector and he likes
Vodafone(symbol Quote) and
AT&T(T Quote), as well as
Broadcom(BRCM Quote),
Qualcomm(symbol Quote),
Nvidia(NVDA Quote), and
Ericsson(ERICY Quote).
Guy Adami would watch Nvidia's gross margins here, and Jeff Macke was bullish on
Intel(INTC Quote) for the long term.
Regional banks were also among the top-performing sectors today. Guy Adami would rather be in
Bank of America(symbol Quote) then the regional banks. Eric Bolling would avoid the banks due to the subprime worries.
Ameritrade(AMTD Quote)saw some interesting options activity on Monday. Pete Najarian believes options players think Ameritrade is done going down. Guy Adami believes Ameritrade will make a deal with
ETrade(ETFC Quote), but Eric Bolling would stay away from the financial sector.
Sun Microsystems(SUNW Quote) was up 10% after hours on good earnings. Jeff Macke said private equity group KKR has taken a $700 million stake in Sun. Macke feels this is smart money getting into the stock, and Najarian agreed.
Merill Lynch came out with a report Monday that said oil will follow a pattern of the last three years and decline in the second half of the year. Eric Bolling believes oil will hit $80. Pete Najarian was bullish on
ConocoPhillips(COP Quote) and
Chevron(CVX Quote).
Shares of
Radioshack(RSH Quote) were down 12% on a 15% fall in revenue. Jeff Macke believes the CEO of RSH needs to be more available to Wall Street.
Nordstrom(JWN Quote) was up 7% after Goldman Sachs and Citigroup upgraded the stock recently. Jeff Macke was bullish on the stock as a long-term play.
Mastercard(MA Quote) will report earnings before the bell Wednesday. Guy Adami was bullish on Mastercard as a long-term play.
Happy 52-Week High
Verizon(VZ Quote).
