'Fast Money' Recap: Holding Pattern
The stock market was able to hold onto its gains from Wednesday with the Dow finishing up 22 points and the Nadsaq closing up a modest 5 points in Thursday's session. The team at CNBC's "Fast Money" tried to guess where the market's headed while also taking a look at financial stocks.
Wharton Professor Jeremy Siegel stated on
CNBC
that he is bullish on the stock market, because he doesn't see any competition for stocks from bonds or real estate. Siegel's comments basically don't make sense to Tim Seymour. However, Pete Najarian interpreted the comments as Siegel just saying there is no other place to put money besides stocks. Guy Adami thinks the market looks okay and Siegel is on to something.
Najarian would point investors to technology stocks like
(GOOG) - Get Report
,
Apple
(AAPL) - Get Report
,
Research In Motion
(RIMM)
and
Microsoft
(MSFT) - Get Report
. Karen Finerman says the S&P isn't trading a rich multiple at all.
Financials in Headlines
Capital to the tune of 13.5 billion has made its way into some of the distressed financials this week. Whitney Tilson, The Value Investing Congress Chairman and manager of hedge fund T2 Partners joined the "Fast Money" crew to discuss his take on the financials. Tilson feels that
Lehman Brothers
(LEH)
is a short here. In his opinion, the firm has a lot of exposure to subprime they haven't disclosed yet. Finerman mentioned she is short Lehman Brothers and long
Goldman Sachs Group
(GS) - Get Report
.
Also, Tilson mentioned that
Freddie Mac
(FRE)
could be a great buy here. However, Najarian likes
Fannie Mae
(FNM)
better then FRE. Instead of FRE, Adami likes
Ameriprise Financial
(AMP) - Get Report
and feels the stock has been sold off unjustly with the rest of the financial sector.
Tilson disclosed that he is short both
MBIA
(MBI) - Get Report
and
Ambac Financial
(ABK)
and he predicts both will go to zero.
Morgan Stanley
(MS) - Get Report
Co-President Zoe Cruz announced she will step down from the investment bank. Finerman is curious as to why she would leave, because Cruz was one of the highest ranking women on Wall Street. She thinks that Cruz is too young to just retire. Seymour thinks this is a sign of the times, while Adami says his sense is that Cruz was asked to leave.
Hedge Fund Citadel Investment Group announces an 18% stake in
E*TRADE
(ETFC) - Get Report
. Najarian bought stock in ETFC on Thursday. Adami thinks just for a trade ETFC might be worth a shot here.
(Check out a professional portfolio focused on financial stocks at Stockpickr.com
.)
Time to Shop
Sears Holdings
(SHLD)
falls 10% after the retailer reported a 99% drop in profits as sales declined and margins plummeted. Seymour thinks the Sears story looks very interesting at these levels with a couple of Wall Street whales long the stock. Adami cautions not to bet against Eddie Lampert. He has zero leverage and plenty of cash on the balance sheet. Najarian pointed out that SHLD has been trading with the decline in real estate.
Unusual options activity was noted in Department Store
Dillard's
(DDS) - Get Report
. Najarian explained that an insider bought 100,000 shares recently and the January $20 calls were bought big on Thursday. Adami mentioned that Dillard's has a 17% short interest and the stock could easily go up a few bucks. Finerman thinks it's interesting to see an insider buy that much stock.
Dell
(DELL) - Get Report
plunges 10% in after hours trading after the computer maker issues a cautious outlook. Adami says the operating margins and gross margins weren't good enough, but he still likes the stock. Najarian thinks this is a great opportunity to get into Dell at a much cheaper price.
Dollar Trade
Goldman Sachs Chief Economist Jim O'Neil put out a piece of research on Wednesday that said the U.S. dollar is going to stabilize or appreciate against the euro and the yen, then weaken against some of the emerging market currencies. Adami finds it very interesting that O'Neil is saying this ahead of the Fed meeting for Dec. 11th. Adami also expects gold and oil will continue to slide lower and that decline could come against the strengthening of the dollar. Seymour thinks the emerging market currencies will continue to dominate the dollar.
India Trade
India's economy is booming at the rate of 9% per year, but the Indian consumer is burning less oil per-person then just about any other consumer on the planet. Seymour tells investors to play this trend with refiners like Reliance Energy or ONGC. He also likes bank plays like
ICICI Bank
(IBN) - Get Report
and
HDFC Bank
(HDB) - Get Report
which are investing capital to help build out the energy infrastructure.
Another way to play the growth is with outsourcing names like
Satyam Computer
(SAY)
and
Infosys
(INFY) - Get Report
. Najarian thinks India needs coal and a potential takeover play might be
Alpha Natural Resources
(ANR)
. Adami predicts somebody will make a play to takeover
United States Steel
(X) - Get Report
.
Happy 52-Week High
Monsanto
(MON)
Pops & Drops
Pops -
Apple
(AAPL) - Get Report
traded up 2% after news broke that an iPhone that can download faster from the internet will be released next year. According to Najarian, Apple bottomed at $165 and now it's rocking.
Smithfields Foods
(SFD)
traded up 5% after the hog production and pork processing company reported better-than-expected second-quarter earnings. Adami remarks that you have to love this stock.
ValueClick
(VCLK)
traded up 7% after UBS slapped a $23 price target on the online advertising firm. Finerman believes takeover speculation took VCLK higher.
Tivo
(TIVO) - Get Report
exploded up 23% after winning validation of their video recorder patent in the EchoStar dispute. This is great news for TIVO, if you ask Najarian.
Drops -
Men's Warehouse
(MW)
fell 16% after reporting disappointing third-quarter earnings. Seymour suggests losing the guy on the commercials.
Aeropostale
(ARO)
fell 13% after missing Wall Street's sales estimates. In Adami's opinion, ARO was due for a drop.
Final Trade
The team hands out their favorite trade ideas of the day.
- Seymour advises playing along with the whales and buying Sears Holdings (SHLD) .
- Adami recommended buying E*TRADE (ETFC) - Get Report with a tight stop.
- Najarian agrees with Adami on E*TRADE and he bought the stock on Thursday.
- Finerman gave out paper play Domtar (UFS) - Get Report.
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