Fast Money Recap

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'Fast Money' Recap: A Bullish Surprise

TSC Staff

Wall Street shook off a lot of negative news Friday and ended the week on an up note.

The Dow Jones Industrial Average, after being down more than 200 points early, finished up 64.59, or 0.8%, at 8629.68. The S&P 500 was up 6.15, or 0.7%, to 879.74. And the Nasdaq rose 32.84, or 2.2%, to 1540.72.

Dylan Ratigan, host of CNBC's "Fast Money" TV show said the market shook off news of the Bernard Madoff Ponzi scandal and the travails of the auto industry and came out "a winner."

Karen Finerman said a floor on the market was established after reports came out that the White House was considering coming to the help of the beleaguered automakers, with TARP money.

Pete Najarian was encouraged by the strength of the market, noting the volatility index "wasn't even close to 60" and that "there is less nervousness out there." "People are willing to put their money to work and start buying," he said.

Guy Adami said he thinks the S&P may advance another 100 points next week.

Tim Seymour said he is still seeing a lot of volatility in oil prices. Some of that uneasiness is reflected in speculation about what will happen at an OPEC meeting next week as well as uncertainty about the supply of oil and Equator saying it is defaulting on its debt.

Ratigan asked the trading panel to comment on the strong showing in tech stocks today. Adami attributed it to a weaker dollar that affects the big tech companies because "75% of their sales" are overseas.

Seymour attributed the uptick to the growing belief that technology will play a big role in President-elect Barack Obama's grand infrastructure plans.

Ratigan brought in John Lonski, chief economist of Moody's Investors Service, to explain why General Motors(GM Quote) going into Chapter 11 bankruptcy would have a domino effect on the rest of the economy.

Lonski said bankruptcy would "make this recession a heck of a lot worse" and lead to higher jobless numbers. He said he feared the move would also lead to a replay of what happened in the financial markets.

Mike Darda, chief economist of MKM Partners, appeared on the show to talk about what to expect next week: the last trading week of the year.

Darda said not to expect too much from next week's Federal Reserve meeting. He expects the Fed to take the target rate from 1% to 25 basis points, but he said that isn't likely to matter much because the federal funds rate is already at about 13 basis points.

"The Fed has already switched from targeting interest rates to pushing a lot of reserves into the banking system," he said.

He said his real concern remains the recovery of economy, specifically when it's going to happen and how strong it will be. He said the improvements in the credit markets have been uneven, noting in particular little improvement in the high-yield market.

Ratigan shifted the discussion to the commercial real estate markets and asked Louis Taylor, senior REIT analyst for Deutsche Bank, for his comments. Taylor said he expects a lot more volatility between now and the end of the year.

In this market, he sees trading opportunities in such oversold names as Duke Realty(DRE Quote), which is trading at 4 times earnings. He said while concerns have been expressed about its development pipeline and funding, his firm has checked into the funding and was comfortable with it.

In view of the unfolding Madoff scandal, Ratigan asked Peter Turecek, Kroll managing director, just how prevalent fraud is in the financial system.

Turecek said that while there is "a bunch of bad actors," the problem isn't "widespread." He said the scandal underscores the need for investors to do their due diligence on companies they are looking at and managers they give their funds to.

Red flags? Turecek said to check for lies in the resumes, patterns of behavior that distract managers from their businesses like litigation and divorce, mismarked portfolios and secretive systems.

"Check out "'Fast Money' Portfolios of the Week" on Stockpickr every Thursday.