'Fast Money' Recap: 2008 Outlook

Stockpickr Staff

The stock market saw its biggest up day in two weeks on Friday. The Dow finished up 205 points and the Nasdaq closed up 51 points. The crew at CNBC's "Fast Money" discussed the rally and how the credit crunch could affect 2008. Dennis Gartman and Dennis Kneale join the show for additional input on commodities and the tech sector.

According to Pete Najarian, the market rocketed up because of Research In Motion's earnings and continued strength in anything tied to the global story. He mentioned that investors are starting to believe the US economy is looking okay. Research In Motion(RIMM) exploded up 12% after reporting strong earnings that beat the street. Najarian believes if RIMM pulls back below $105 it's a buy.

Jeff Macke explained that volatility came down and the news flow wasn't bad on Friday. Tim Seymour thinks the macro is back in and emerging markets are being driven by liquidity. He continues to think the global growth story is alive.

Credit Crunch 2008

CNBC's Charlie Gasparino joined the "Fast Money" crew to discuss his take on the credit issues for 2008. Gasparino predicts the first half of 2008 will be worse because the market will see write-down's from Merrill Lynch(MER) and Citigroup(C). Gasparino predicted that Merrill will have to write-down $15 billion and Citigroup $20 billion and both firms will have to layoff as much as 10% of their workforce.

Finerman worries that if Lehman Brothers Holdings(LEH) comes clean and gets a capital infusion it will put cold water on her bear thesis. Macke thinks the trade is to be long financials because they always get liquidity injections. Gasparino warns that the Bear Stearns(BSC) business model is in jeopardy. Najarian believes the time is now to own Morgan Stanley(MS) and Goldman Sachs Group(GS) because the core business is strong.

(Here's a portfolio designed to address credit worries on Stockpickr.com Credit Concern Plays.)

Dennis Gartman & the Commodity Complex

Dennis Gartman, author of The Gartman Letter, joined the "Fast Money" crew to discuss his take on the outlook for commodities in the 2008. Gartman thinks that the chances of oil hitting $100 are slim because he feels the economy is slowing. He also mentioned that he doesn't foresee the Chinese economy slowing down until we get past the Olympics.

Gartman recommended Suncor(SU) and Petrobras(PBR) for investors that want to play energy. He thinks the US dollar has seen the worst for the next few months and he disclosed he is long the Canadian dollar and short the Euro. Seymour feels the dollar will continue to weaken against the emerging market currencies. Gartman continues to stay bullish on the grain markets, but he does think that wheat is getting toppy. He disclosed he is long Potash(POT) for a play on grains. Seymour mentioned he likes Mosaic(MOS) and Potash.

(Take a look at this portfolio on Stockpickr.com Commodities 28.)

Tech Outlook 2008

Forbes Managing Editor Dennis Kneale joined the "Fast Money" crew to discuss his outlook on the technology sector for 2008. Kneale explained that technology stocks have been under some pressure recently because investors think that problems with the financials will lead to less spending on tech. He went on to explain that financial companies have to spend money on technology for traders, so those worries aren't warranted. He thinks the first half of 2008 will be slow, but he thinks the developing markets will help to make tech strong in the second half.

Najarian believes big cap tech like Google(GOOG) and Apple(AAPL) will drive tech in 2008. He warned investors to stay away from chip stocks. Finerman mentioned she likes Microsoft(MSFT) and she is long MSFT options. Seymour recommended Taiwan Semiconductor(TSM), Lenovo(LNGVY) and Satyam Computers(SAY). Macke thinks the best tech stock for 2008 will be Microsoft and Najarian thinks it will be Apple.

Word on the Street

Circuit City(CC) fell 30% after the retailer reported a wider-than-expected loss for the third-quarter. Macke explained that Best Buy is killing Circuit City and if it continues they won't be in business much longer.

Philips Electronics(PHG) buys out Respironics(RESP) for $5.1 billion. Najarian thinks that everybody should be looking at PHG for 2008 because of the direction the company is going in. Finerman mentioned that private equity could start putting money in the beaten up brokerages. According to Seymour, the deal flow is alive and well in the emerging markets.

Pops & Drops

This POPS&DROPS segment made up the biggest moves for 2007.

Pops - Baidu.com(BIDU) traded up 238%. In Najarian's opinion, BIDU will continue to run.

Mosaic(MOS) traded up 316%. Seymour thinks the story will continue into next year.

Activision(ATVI) traded up 67%. Macke disclosed he is staying long ATVI.

Amazon.com(AMZN) traded up 132%. This certainly impressed Finerman.

Costco(COST) traded up 32%. Macke says Costco is stealing Target's mojo.

Freeport McMoRan(FCX) traded up 85%. Seymour says the demand from China for copper is not likely to stop.

Nike(NKE) traded up 33%. Najarian says Nike is crushing it in Europe.

Jacobs(JEC) traded up 136%. Finerman remarks that JEC still has more growth.

McDonald's(MCD) traded up 35%. Macke maintains McDonald's is a gorgeously managed company.

Solarfun(SOLF) traded up 151%. Najarian explained this industry is for real. Finerman likes the business model.

Drops - MBIA(MBI) fell 73%. Finerman still doesn't like MBIA.

Final Trade

The crew signs off before the holiday giving trade ideas as presents.

• Macke favors video game makers for 2008.
• Seymour recommends playing emerging markets like Mexico, Russia and Taiwan.
• Finerman advises buying Kaiser Aluminum(KALU).
• Najarian picked Apple(AAPL).

---