'Fast Money' Recap: Early Santa Rally
NEW YORK (
) -- The markets rallied Wednesday for a second consecutive trading session.
The
Dow Jones Industrial Average
jumped 106.63, or 0.95%, to 11, 362.14 and the
S&P 500
added 15.46, or 1.28%, to 1,221.53. The
Nasdaq
rose 29.92, or 1.17%, to 2,579.35.
Brian Kelly said on
CNBC
's "Fast Money" TV show that the markets were spurred by the decision by the ECB to do its own form of quantitative easing as well as good pending housing sales numbers that came out today.
Tim Seymour concurred, saying the ECB is bringing liquidity to the markets that need it. He said that action might have been disappointing to some who expected stronger action.
For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
3 Stocks I Saw on TV |
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Seymour said it is easy to get caught up in all the geopolitical news and lose sight of valuations. He said stocks are cheap and "that's what you need to focus on."
Melissa Lee, the moderator of the show, said financials is one space that looks attractive, with a steeper yield curve and loan growth demand working in the favor of banks. Guy Adami said he liked the medical devices and health care names.
Joe Terranova said he was going out on a limb with
Comerica
(CMA) - Get Report
on the theory that the economy is recovering and that the financials will play a big role in the rebound.
He also liked
Goldman Sachs
(GS) - Get Report
and the work its trading desk has done in the past quarter.
Lee noted that oil broke above $90 a barrel. Terranova said he's very bullish on crude the next two weeks.
Richard Ilczyszyn, senior market strategist at Lind-Waldock, also was bullish on crude as well as natural gas, which he recommended buying on dips. He sees copper heading to $4 if the market continues to rally.
Looking ahead to Friday's jobs report, Joe Lavorgna, an economist with Deutsche Bank, expects an above consensus figure of 150,000 jobs created. He said he would be buying equities ahead of the report not so much because of the jobs report but because it comes along with a string of earlier data that support the belief of an economic recovery.
He said he's looking for the jobless rate to drop to 8% in 2011, adding the jobless rate usually overshoots to the downside when the labor market starts to get healthy.
Shifting to retail, Patrick McKeever, an analyst with MKM Partners, offered some possible takeover targets in the sector in the wake of the recent buyout of
JCCrew
( JCG). Based on a screen he ran, he came up with three takeover candidates:
Citi Trends
(CTRN) - Get Report
,
Big Lots
(BIG) - Get Report
and
99 Cents Only
( NDN).
In the trading the globe segment, Seymour said
Pepisco
's
(PEP) - Get Report
$3.8 billion deal for a two-thirds stake in
Wimm-Bill-Dann
( WBD) is a smart emerging markets trade. He said the companies like Wimm-Bill-Dann are attractive because of their strong sales and margin expansion.
For the hedge pick of the week, Skybridge Capital's Anthony Scaramucci chose
Kirkland's
(KIRK) - Get Report
, a smallish-cap home décor business that operates primarily in the Sun Belt.
He called Kirkland's, which trades at 5.4 times earnings, a great turnaround story. He said the stock is held by some value-based hedge funds.
With the yield curve getting steeper, Terranova commented on the rise in 30-year rates and how that seemed to be driving home sales. Adami said he liked
Home Depot
(HD) - Get Report
, while Seymour told viewers to check out
Cemex
(CX) - Get Report
if housing takes off.
Simon Baker took the panel to the movies, saying there's reason to be optimistic about Hollywood these days, with the strong showing by such movies as
Harry Potter and the Deathly Hallows
and the upcoming lineup of 3-D movies.
His favorite picks are
Cinemark
(CNK) - Get Report
and
Regal
(RGC)
.
Shifting to the auto trade and the comeback of
Toyota
(TM) - Get Report
, Seymour said the Japanese automaker is storming back with its lowest inventory ever, highest mileage driven and age of fleet. He said Toyota is well positioned in the U.S. auto market where it gets 50% of its revenue.
Cortes liked Toyota, too. He said the company was dogged by a currency issue, but he believes that's turning around.
In the final trades, Seymour liked
Trinity Industries
(TSL)
. Adami liked
FedEx
(FDX) - Get Report
. Kelly liked
Penske Automotive Group
(PAG) - Get Report
And Terranova liked
Radio Shack
(RSH)
.
--Written by David Tong in San Francisco.
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