On a peculiar day for the U.S. stock market, the indices sold off hard early, then crept back to the baseline. The Dow closed down less than 0.1%, the S&P 500 eked out a gain of 0.1%, and the Nasdaq finished down 0.6%.
"Fast Money" TV show, Pete Najarian said the rally off the low was driven by bullish action in the commodities. He attributed early selling to profit-taking in the sector. Guy Adami, Jeff Macke and Karen Finerman all believed that the market was in for another selloff. Finerman cited awful stock performance from
and a Friday jobs number that will likely be discouraging.
Adami said that energy plays led the market to the break-even mark. He stressed that natural gas is a way to play the energy boom. He also predicted a breakout in copper, recommending
. He said there may be a bubble in gold.
Macke said to take profits in gold as it approaches $1,000 an ounce. He said that oil wants to break out, reminding viewers that it almost reached $104 a barrel today. He recommended the
U.S. Oil Fund
Najarian said that if oil gets to $105, it will break out. He noted that natural gas was outperforming oil stocks. He predicted a pop to the upside.
Karen Finerman called weakness in the dollar the "flip side of inflation." Najarian suggested looking at Canadian companies. He believes that with a strong currency, many of them may step into the U.S. looking to make acquisitions.
Chart of the Day
The crew noted that the
Financial Sector SPDR
showed continued weakness for the financial sector.
, Adami said analysts have taken their estimates down. He noted lower highs in the stock's chart and predicted upside when the company reports earnings in several weeks.
Finerman observed a
Securities and Exchange Commission
rule that companies with huge downsides on earnings must preannounce. She noted that if Goldman were to miss, now would be the time for a preannouncement. She suggested that, if her understanding of the rules is correct, one could conclude that Goldman will reach its projected numbers.
Najarian said he hopes the stock gets punished so he can get long. He predicted a pop after earnings.
Macke said he would get into the stock at $150.
disappointing round trip, Macke said the stock is a "value stock," and that investors will have to wait until it goes down more before buying.
Najarian said that Apple might do a buyback. He also advised keeping an eye on
Adami said to watch
. He also noted the entire Internet sector had been downgraded by Piper Jaffray.
In the auto sector, Adami said that
should stop making trucks. He recommended
as a play on the sector but cautioned that the "whole thing is a disaster right now."
made a $2.63 billion bid for
today. Finerman called the bid "aggressive," and noted that Ohio, where Diebold is based, is not an arbitrage-friendly state.
Adami noted the offer's 66% premium over the company's share price and pointed out that Diebold said that that wasn't high enough. Macke expressed confusion that companies facing buyouts at huge premiums were not taking the deals.
intended acquisition of
as an example. Finerman predicted a higher offer for both Diebold and Yahoo! Najarian agreed.
Warren Buffett said today that recession is here. Najarian lauded Buffett's foresight on
Burlington Northern Santa Fe
. He also suggested viewers take a look at
Johnson & Johnson
, shares of which Buffett has recently bought. He noted the Buffett is generally getting into foreign pharmaceutical names, but avoiding American ones such as
How to Trade This Week's Economic Data
Friday's payroll number will be on many traders' screens, and a recent survey found that 83% of Americans rate the economy as fair or poor.
Macke said hw follows only one survey, the Investor's Intelligence Survey. He predicted that the data would be lousy and said that that expectation is likely already priced in to discretionary stocks. He expressed distrust of surveys, saying, "It's not tradeable data." Finerman agreed.
Najarian said that investors are better served to look where people put their money. He suggested looking for spikes in the Volatility Index (VIX) as a true indicator of fear.
Which Politician Will Help Your Portfolio?
In advance of tomorrow's crucial Democratic presidential primaries in Ohio and Texas, the "Fast Money" crew welcomed Rob Cox of Breakingviews.com to discuss the market's prospects should Barack Obama, Hillary Clinton or John McCain win the general election.
Cox said that Obama may be the best for the markets, because he plans to cut government spending by getting out of Iraq. Adami disagreed, saying that a pullout of Iraq would precipitate an increase in general defense spending.
Cox pointed out that McCain plans to increase Iraq spending while cutting corporate taxes. He said it was harder to see where that money would come from. He also said that drug companies should fear all three candidates because of concerns about health care spending.
Adami again disagreed, arguing that stocks like
are likely set up nicely for at least 18 to 24 months, because it will be difficult to pass a health spending bill in 2008 or 2009.
Macke expressed concern about the Democrats' rhetoric about NAFTA. Cox said that Obama has voted against free trade, Clinton is somewhere in the middle, and McCain is more of a free trader. He suggested that the posturing about NAFTA may be peaking in advance of the Ohio primary.
Record Buybacks: A Buy Signal?
The crew noted that there has been a great deal of announcements of stock buybacks but not much buying. Macke reminded viewers that buybacks happen for many reasons. Usually, he said, companies buy back stock to inflate earnings per share by decreasing the float. He said that a buyback is not a good indicator of a rally.
Najarian said he prefers to see individual insiders from a company buying stock. He noted that the CEO of
has bought a million shares of his company this year. He said this was a much better indicator.
traded lower and was one of the most active names on the
New York Stock Exchange
Technical analyst Louise Yamada joined the traders to discuss some trends she saw in the market.
She noted that the
has broken its five-year uptrend and is now spending time in a triangle. She noted a breakdown in the index, citing lower highs and people selling into rallies. She predicted further declines in the S&P 500.
, Yamada said she reached a sell signal in 2002 and the currency has been downtrending ever since. She put a short-term target of 72 on the index.
In commodities, gold prices should continue to rise, she said. She projected an upside target of $1,050 per ounce, if not $1,150. She had an oil price target of $124 a barrel.
financial expert Suze Orman joined the "Fast Money" team next to offer advice about what everyday people should do in this market. She stressed that the "Fast Money" traders operate under a very rapid time frame and said others should take a much longer view of their investments. She advised viewers to diversify and invest in index funds and ETFs. As long as an investor won't need the money for 10 years, the market's unpredictability shouldn't matter too much.
Macke chose the
Short Dow30 ProShares
. Adami selected United Technologies. Finerman picked
. Najarian went with
Stockpickr is a wholly owned subsidiary of TheStreet.com.