'Fast Money' Recap: The European Central Bank and Bonds
On CNBC's "Fast Money" TV show, Guy Adami, managing director of stockmonster.com, said he remains bullish on bonds and thought bond yields have more room to the downside. He is a buyer of the TLT if it opens lower on Friday, but admitted that Thursday's price action concerns him.
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Brian Kelly, founder of Brian Kelly Capital, said investors seem confused on what to do following the significantly lower drop in the euro on Thursday. When investors are confused they will not make the "extra effort" to buy stocks.Tim Seymour, managing partner of Triogem Asset Management, thinks the stock market wants to go lower because it cannot seem to rally on good news. Jon Najarian, co-founder of optionmonster.com and trademonster.com, said the 10-year Treasury yield seems likely to drop to 2.20%. However, lower rates will be driven by global investors' demand for Treasury bonds, which isn't a bad thing, he argued. Dennis Gartman, editor and publisher of The Gartman Letter, said the euro is likely to continue weakening. Investors should use this opportunity to buy gold with the euro currency. He reasoned that the European economy is "waning" and lagging the U.S. Adami said that a stronger U.S. dollar will create headwinds for some U.S. companies that operate internationally. Seymour said the euro still has more downside ahead. He is a buyer of German exporters, such as Siemens (SI) . Najarian said investors shouldn't sell U.S. stocks simply because of a stronger dollar. However, it may have a negative effect of margins, he said. Kelly said investors should stay long El Pollo Loco (LOCO) for the time being. Seymour suggested stocks like El Pollo Loco do well in bull markets but do terribly during market declines. Seymour said he would "hold" Intel (INTC) because it is fairly valued but faces a lot of resistance near $35. Adami said Intel has done well while the rest of the industry has sold off. Investors should stay long for now. Read More: Europe's Malaise Won't Muck Up U.S. Recovery Najarian said Intel and Broadcom (BRCM) seem poised to rally into year's end.
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