'Fast Money' Recap: Financials Hurting
Stocks weren't in favor with investors Monday, as recession fears continue to worry the markets. The Dow lost 108 points and the Nasdaq fell 30 points.
On
CNBC's
"Fast Money," Jeff Macke explained that investors didn't have many reasons to buy stocks Monday. Pete Najarian says this market is still a trader's market. Karen Finerman says that credit issues are still a problem, and that she is staying short
Capitol One
(COF) - Get Capital One Financial Corporation Report
. Tim Seymour says emerging markets have better valuations, and investors are flocking to the overseas trade.
Credit problems and concerns with subprime continue to hurt the financial stocks. Finerman mentioned that
Wachovia
and
Wells Fargo
(WFC) - Get Wells Fargo & Company Report
traded lower Monday off a Merrill Lynch downgrade. Also,
American Express
(AXP) - Get American Express Company Report
TheStreet Recommends
, Capitol One, and
Discover
(DFS) - Get Discover Financial Services Report
traded down on a UBS downgrade. Najarian pointed out that
MasterCard
(MA) - Get Mastercard Incorporated Class A Report
was strong in the tough environment for financials.
(GOOG) - Get Alphabet Inc. Class C Report
accused
Microsoft
(MSFT) - Get Microsoft Corporation Report
of trying to take control of the internet with its $44.6 billion bid for
Yahoo!
(YHOO)
. Macke says Google is complaining and the price action in their stock is weak. Najarian says a good earnings report from
Cisco Systems
(CSCO) - Get Cisco Systems, Inc. Report
could help the technology sector. He also likes
Apple
(AAPL) - Get Apple Inc. Report
and he would avoid Google for a few more weeks. Seymour says he loves
Intel
(INTC) - Get Intel Corporation Report
here.
Boston Scientific
(BSX) - Get Boston Scientific Corporation Report
reported a fourth-quarter net loss of $458 million due to hefty losses on charges. Najarian mentioned that
Medtronic's
(MDT) - Get Medtronic Plc Report
drug-coated stents will hurt BSX.
Las Vegas Sands
(LVS) - Get Las Vegas Sands Corp. Report
reported fourth-quarter profits that plunged 65% due to expansion costs. Finerman says the recession is hitting travelers, and she is short
Morgans Hotel
(MHGC)
. Macke mentioned that
Dollar Thrifty Automotive Group
(DTG)
fell 37% Monday after the rental car firm cut its 2007 earnings guidance.
Legendary real estate investor Sam Zell announced an 8% stake in
Starwood
(HOT)
. Najarian reminded viewers that Zell sold the real estate sector at the top, so you might want to pay attention to him buying HOT here.
Big pharma stocks like
Merck
(MRK) - Get Merck & Co., Inc. Report
and
Eli Lilly
(LLY) - Get Eli Lilly and Company Report
were strong in a weak tape. Najarian says MRK has been oversold, and this could be the time to buy. He also likes
Sanofi-Aventis
(SNY) - Get Sanofi Report
.
Earnings Trade
News Corp.
(NWS) - Get News Corporation Class B Report
,
Walt Disney
(DIS) - Get Walt Disney Company Report
and
Time Warner
(TWX)
are set to report earnings this week. What is the trade?
Macke explained he likes Disney because it always anticipates slower growth in the economy. He loves what CEO Bog Iger is doing by integrating the theme parks with the movie division. Seymour says he likes Disney for their ESPN brand that caters to adults.
Commodity Trade
BHP Billiton
(BHP) - Get BHP Group Ltd. Report
is set to report earnings on Wednesday. What is the trade? Seymour says that
Alcoa
(AA) - Get Alcoa Corporation Report
and China's Chalco don't want to see BHP buyout
Rio Tinto
(RTP) - Get Reinvent Technology Partners Class A Report
. He explained that this opposition to the takeover will help to raise the price for a potential bid for RIO, and consolidation will remain a theme for the entire sector. Seymour says
U.S. Steel
(X) - Get United States Steel Corporation Report
and
Nucor
(NUE) - Get Nucor Corporation Report
are in play. He also likes
Market Vectors-Coal ETF
(KOL) - Get VanEck Vectors Coal ETF Report
for a way to play the coal sector. Finerman disclosed she is long Rio Tinto. Najarian says keep an eye on
Joy Global
(JOYG)
,
Arch Coal
(ACI) - Get Albertsons Companies, Inc. Class A Report
and
Alpha Natural Resources
(ANR)
.
Retail Trade
Retail stocks have been
en fuego
over the past couple of weeks, but some best of breed names like
Wal-Mart
(WMT) - Get Walmart Inc. Report
and
Target
(TGT) - Get Target Corporation Report
took a hit Monday. With January sales figures due out Thursday, is it time to take profits in the space?
Finerman explained that when a sector moves that sharply to the upside, investors must take some off the table. She would like to see the sector pull back more before she reloads. Macke says the retail stocks will be great trading vehicles for the entire year.
He recommends investors make a list of retail names they like and wait for them to come down. Seymour likes
Sears Holdings
(SHLD)
from a valuation perspective, and Macke says he would buy SHLD at a 9-handle. Finerman says she doesn't have a long SHLD position, but she wouldn't short it.
Egypt Trade
With 80 million people, Egypt is the most populous nation in the Middle East. The country is starting to see the flow of petrodollars into its economy. Egypt's economy is now growing at 7% annually and receiving a shot in the arm from growth in tourism.
Last year 10 million foreigners flocked there. What is the trade? Seymour says the trade is the
S&P Emerging Middle East & Africa SPDR
(GAF)
or
T. Rowe Price Tramx Mutual Fund
(TRAMX) - Get T. Rowe Price Africa & Mid-East Report
.
Clorox CEO Interview
Clorox
(CLX) - Get Clorox Company Report
CEO Don Knauss joined the "Fast Money" crew to discuss his company's prospects. Knauss explained that he issued more cautious guidance Monday because the pressures of commodity costs are rising from $25 million to $100 million for the second half of the year.
He says their glad trash bags have the largest exposure to commodities costs of all their major brands. Knauss says Clorox is growing their top line ahead of Wall Street expectations, growing volume and running more efficient cost saving programs. Seymour disclosed he bought
Unilever
on Monday because they have big exposure to Eastern Europe. Finerman says she owns Wal-Mart which is her way to get exposure to firms like Clorox.
Trader Radar
Dollar Thrifty
(DTG)
traded 10 times its average daily volume Monday.
Pops and Drops
Pops
:
Palm
(PALM)
traded up 5%. Seymour wondered if anyone even owns a Palm Pilot.
RealNetworks
(RNWK) - Get RealNetworks, Inc. Report
traded up 4%. Najarian says RNWK has some problems.
China Life Insurance
(LFC) - Get China Life Insurance Co. Ltd. Report
traded up 5%. Seymour doesn't like that LFC trades at 45 times earnings.
Solarfun Power Holdings
(SOLF)
traded up 8%. Finerman says don't get involved in SOLF.
Drops
:
United Airlines
(UAUA)
fell 6%. Macke explained that UAUA announced it would charge consumers $25 to check a second bag.
Pier 1 Imports
(PIR) - Get n.a. Report
fell 8%. Macke says PIR is the slowest turn around in history.
WCI Communities
(WCI)
fell 10%. Finerman explained the drop is misleading because the stock only fell 50 cents.
Under Armour
(UA) - Get Under Armour, Inc. Class C Report
fell 6%. Najarian says UA paid up for its Super Bowl advertisement and it didn't work.
Virgin Mobile
(VM)
fell 12%. Seymour says that VM story is losing ground to
AT&T
and
Verizon Communications
(VZ) - Get Verizon Communications Inc. Report
.
Delta Air Lines
(DAL) - Get Delta Air Lines, Inc. Report
fell 7%. Macke says Monday was a tough day for the airlines.
Humana
(HUM) - Get Humana Inc. Report
fell 3%. Najarian explained that HUM is putting out too much negativity in a stock market that is unforgiving.
Final Trade
Najarian picked
Albemarle
(ALB) - Get Albemarle Corporation Report
. Macke likes Walt Disney ahead of earnings and for a long-term investment. Seymour favors
Gold Fields Limited
(GFI) - Get Gold Fields Ltd. Report
. Finerman recommends
Kaiser Aluminum
(KALU) - Get Kaiser Aluminum Corporation Report
in front of earnings.
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