'Fast Money' Recap: A Strong Financial Sector
NEW YORK (TheStreet) -- The S&P 500 hit intraday record highs but closed flat on Friday following the release of February's nonfarm payrolls result.
On CNBC's "Fast Money" TV show, Pete Najarian, co-founder of optionmonster.com and trademonster.com, said Friday's negative reversal makes sense since the market has been going up all week. He pointed out the strength in the financial sector and reminded investors that tension in Ukraine is picking back up.
Steve Grasso, director of institutional sales at Stuart Frankel, said financial stocks are likely headed higher because of the upcoming stress tests. Investors seem hopeful the banks will do well and return more cash to shareholders.
Tim Seymour, managing partner of Triogem Asset Management, said the German DAX closed on its lows on Friday, signaling that U.S. equities could face more headwinds on Monday from escalating geopolitical issues.Jon Najarian, co-founder of optionmonster.com and trademonster.com, said he did not want to sell his long positions but was becoming much more cautious of the market. In order to hedge his positions, he bought the March $15-$18 call spread on the CBOE Volatility Index (VIX.X). Nigel Travis, CEO of Dunkin' Brands (DNKN), said customers should not worry about the cost of their morning coffee going up, despite coffee prices shooting higher so far this year. He admitted that the weather was affecting sales, but optimistically stated that full-year guidance would remain unchanged. Travis concluded that he's interested in acquiring another company but found it unlikely that it would happen any time soon. Seymour admitted that DNKN has solid growth and impressive sales numbers but said it's overvalued at 38 times last year's earnings. As a pairs trade, he said to short DNKN and buy Starbucks (SBUX). Pete Najarian disagreed, saying he continues to like DNKN for its solid earnings and expanding margins. He added that on a forward-looking basis, the stock trades at a more reasonable 24 times forward earnings.
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