'Fast Money' Recap: Market Rotation
NEW YORK (
) -- The markets closed higher Wednesday amid turmoil in the commodities and bond markets.
The
Dow Jones Industrial Average
added 13.32, or 0.12%, to 11, 372.48 while the
S&P 500
rose 4/53, or 0.37%, to 1,228.28. The
Nasdaq
gained 10.67, or 0.41%, to 2,609.16.
Joe Terranova said on
CNBC
's "Fast Money" TV show there was a rotation today away from precious metals to the financials. He questioned remaining in gold.
Guy Adami said he sees a couple more down days for silver and didn't see the current situation as a buying opportunity.
Pete Najarian said he reduced his position in
Market Vectors Gold Miners ETF
(GDX) - Get Report
but didn't believe all the longs wanted out.
Najarian said he was encouraged to see the financials show leadership. Terranova said the copper performed well and sees as it as a trade for 2011. Najarian, though, said he didn't see much more upside in copper at $4 a pound and wanted to wait for a pullback.
Shifting to the Treasuries, Melissa Lee, the moderator of the show, said it was the worst two-day selloff since the Lehman bankruptcy. Adami said the yield was rising for the wrong reasons and was not a positive for equity markets.
But Terranova said it was difficult to predict where yields will go and said the bonds may be just be returning to a normal pattern. Karen Finerman said the steepening yield curve will provide widening interest margins and help banks generate earnings.
Adami still thought there are headline risks for banks. Najarian said he was encouraged by comments from the CEO of
US Bancorp
(USB) - Get Report
about loan growth and the success of investment banks with IPO and secondary offerings.
Najarian said he was adding to his position in
Citigroup
(C) - Get Report
, which Terranova predicted will be heading to $5 in the wake of the government's latest selloff of its stake.
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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The Nasdaq moved higher for the sixth consecutive session. Najarian said he saw strong bullish options activity in
Texas Instruments
(TXN) - Get Report
and
Microsoft
(MSFT) - Get Report
. He also said he liked the programmable chip stocks like
Altera
(ALTR) - Get Report
.
Simon Baker, of Baker Avenue Asset Management, said he saw strength in the Japanese tech stocks, especially
Canon
(CAJ) - Get Report
and
Sony
(SNE) - Get Report
.
For the hedge fund pick of the week, Anthony Scaramucci dismissed the overblown fears that led to a selloff today in
H&R Block
(HRB) - Get Report
. He said the company is a "classic value name" that trades at 8.4 times earnings while offering a 4.6% dividend.
Lee referred to a list of best performing large cap tech stocks this year. They included
Netflix
(NFLX) - Get Report
, up 245%;
F5 Networks
(FFIV) - Get Report
up 160%;
VMWare
(VMW) - Get Report
up 100%;
Salesforce.com
(CRM) - Get Report
, up 97%; and
Qwest Communications
(Q)
, up 81%.
Najarian said he's been waiting for pullbacks in F5 Networks but he hasn't seen any. Likewise, Adami said the growth rate in a stock like Salesforce.com justifies the valuation.
In the wake of today's news about the announced breakup of
Fortune Brands
(FO)
into three businesses, Baker mentioned three companies that potentially could be broken up. They were
Dover
(DOV) - Get Report
,
Textron
(TXT) - Get Report
and
Emerson
(EMR) - Get Report
.
Shifting to the economy and jobs, Jonas Prising, president of the Americas for
Manpower
(MAN) - Get Report
, said that employers seemed intent to engage in more robust hiring in the U.S. and globally.
He said the pivate sector added 1 million jobs since the low in 2009. And he said temporary staffing has grown 430,000 in 12 months.
Options trader Mike Khuow looked at past runs in silver and warned how silver can fall sharply in a short space of time. Terranova agreed, saying an investor could lose everything on a pullback.
Lee brought in Steve Cortes to talk about China's economy. Cortes found the economy troubling. He said China bulls should be concerned about whether real estate valuations can be sustainable and whether Chinese banks are transparent about their loans.
He said he is shorting China in different ways and said investors should be cautious about plays like
Mosaic
(MOS) - Get Report
which are dependent on China.
In the final trades, Terranova offered up a pairs trade, long
Financial Select Sector SPDR
(XLF) - Get Report
and short
Select Sector SPDR Fund -Health Care
(XLV) - Get Report
. Adami liked
Diamond Foods
(DMND)
. Finerman advised waiting on
Omnicare
(OCR)
until it cools off. Najarian liked
McDonald's
(MCD) - Get Report
.
The panelists included Guy Adami, managing director of Drakon Capital; Pete Najarian co-founder of optionMONSTER.com; Karen Finerman, president of Metropolitan Capital Advisors; Joe Terranova, chief alternatives strategist for Virtus Investment Partners.
--Written by David Tong in San Francisco.
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