The last day of 2007 was a disappointment for the bulls on Wall Street. The Dow finished Monday down 100 points and the Nasdaq lost 22 points. The cast of characters at CNBC's "Fast Money" changed a bit, but the commentary was as strong as ever. A preview for 2008 took the stage front and center.
The Fast Money lineup for December 31st was made up of the following, Brian Schaeffer, Managing Director of Van Der Moolen Capital Markets, Carter Worth, Oppenheimer Chief Market Technician, Jon Najarian (Pete's Brother) founder of Optionmonster.com and Guy Adami.
What's up for 2008?
Guy Adami likes
going into 2008. Jon Najarian recommends the
Consumer Discretionary SPDR
because he thinks consumer spending will return in 2008. Carter Worth thinks that the stock market will have a "black" beginning for the New Year.
Brian Schaeffer explained that he is a long term optimist, but a short term pessimist going into 2008. Schaeffer mentioned he is bullish on healthcare stocks like
. Adami thinks the valuation on ISRG is a little rich at current levels.
(Check out this portfolio pick for 2008 on Stockpickr.com
The "Fast Money" traders offered up 5 major market predictions for 2008. Adami's prediction is that
will embark on a major takeover in biotech and trade higher. He feels Pfizer has no pipeline but they do have lots of cash to do a takeover. Schaeffer agrees with Adami and he thinks that big cap pharmaceuticals will be the place to be in 2008. Schaeffer's prediction is that health care stocks will rise on valuation. He likes the valuations and good yields for the sector going into 2008.
Worth's prediction is that China and India will continue to have strong economies, but the stocks will trade lower. He believes the stock market for China and India are bubbles and will begin to top out and end lower in 2008. Najarian doesn't buy into Worth's prediction. Najarian's prediction is that Wall Street stocks will climb out of the credit-crunch. He thinks the financial sector will have less turmoil in 2008. Dylan Ratigan's prediction was three words: China, solar and fun.
Addison Armstrong Director of Market Research for Tradition Energy joined the "Fast Money" crew to discuss his take on oil for 2008. Armstrong expects oil prices to trade lower to the $75 level in 2008 because of a weaker economic environment. He thinks slowing demand from China and India will help to take crude oil lower. Adami agrees with Armstrong and feels $75-$80 is the right price for crude. Najarian thinks oil will sell off, but it will not stay at the $75 level for long.
Oil put in its best year for returns in 5 years and gold saw its best year since 1979. Worth says stick with the gold, oil and soft commodities trade.
CKE Restaurants CEO Interview
Andy Puzder the CEO of
joined the "Fast Money" crew to discuss his take on the prospects for his company. Puzder compared CKE's 99 cent burger to comparable priced burgers from Wendy's and McDonald's. The size of CKE's burger wasn't even comparable to its competitor's offerings. Puzder explained CKE is also doing very well with their premium coffee. Schaeffer mentioned he will be a buyer of the stock. Adami thinks CKE needs to get out a better message to Wall Street.
Word on the Street
is reportedly in talks to sell a big stake to a Chinese or Middle-Eastern fund. Najarian thinks the financials are the cheapest sector in the market. Adami likes
Goldman Sachs Group
because it continues to buyback stock. Worth explained that a lot of the earnings power for the investment banks isn't going to materialize going forward. He would avoid the financial sector and the asset managers. Najarian mentioned that a loss in M&A and investment banking fees can be made up by the trading desks for the brokerages.
U.S. existing home sales rose, but median home prices fell 3.3% Adami recommended looking into
ahead of earnings for a trade. He thinks if KB Home says anything remotely positive the stock will see a short covering rally.
Kirk Kerkorian's Tracinda announced it has purchased a 35% stake in
. Najarian explained the deal was tipped off by the options activity in the December options. He also mentioned he wouldn't shadow Kerkorian by buying other stocks in the sector.
Dick Parsons stepped down as the CEO for
Monday. Jeff Bewkes will step in to replace Parsons. Adami tells investors that Time Warner is a buy for 2008. Schaeffer likes the media stocks, especially
Options Backwardation Trade
Jon Najarian sees a trading opportunity based off of options backwardation for the 1st week of January. Backwardation is where the implied volatility is higher for the front month options. Najarian explained that an unusual premium is being put on the options for
. This unusual premium for the front month contracts suggest to Najarian that a sharp rally is in the cards for ELON and HIS.
Happy 52-Week High
Deere & Company
Pops & Drops
traded up 2% after Barron's said the stock could rise 20% with a spin-off of its cigarette division. Adami declares Loews is cheap and he likes it.
traded up 2%. Schaeffer would be a seller on this rally.
traded up 3% after the firm lowered its exposure to SIV's (structured investment vehicles). Worth still says don't buy LM.
traded up 2%. Adami remains bullish on MasterCard.
fell 3% on no news. Schaeffer doesn't like the stock or product. He wouldn't be a buyer on this drop.
Las Vegas Sands
fell 3%. Najarian recommends buying LVS on a further dip.
fell 3% as U.S. auto makers are looking to use lighter materials. Adami mentioned that Nucor is the best run steel company and a potential takeover target.
Viewers of the show would like to have their questions answered.
Samantha from New York wants to know, "
is over $200 barrier this year. Is it too rich for 2008?" Schaeffer thinks the price of Apple stock is getting ridiculous. He recommends taking profits at $200 and maybe buying some put options. Worth also thinks Apple is overpriced. Najarian likes Apple and has a $230 price target on the stock.
Dan from New York asks, "Exports are booming and the dollar remains weak. Do you think the strong economic boom outside the US is enough to starve off a recession?" Najarian doesn't think the US will go into a recession and he sees the dollar strengthening in 2008. Adami likes
for a play on global demand.
The crew says goodbye to 2007 with their best trade ideas.
- Schaeffer recommended Nordstrom (JWN) - Get Report.
- Worth picked Altria (MO) - Get Report.
- Najarian wants more Starbucks (SBUX) - Get Report.
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