'Fast Money' Recap: Pre-Fed Rally
The stock market saw a healthy rally on Monday as investors bid up stocks ahead of the Federal Reserve meeting set for Tuesday. The Dow closed up 101 points and the Nasdaq finished 12 points into positive territory. The crew of CNBC's "Fast Money" analyzed the rally, the writer's strike and foreign investments.
Guy Adami explained that a
UBS AG
(UBS) - Get Report
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write down of $10 billion helped the market go up on Monday. He thinks bad news is good news until the market shows investors otherwise. However, Karen Finerman declares that the market keeps rallying off the same news of a Fed rate cut. She believes the rate cut is already in the market. In Jeff Macke's opinion, the market is trading off of key technical levels with the break above 1490 on the S&P 500.
That's Entertainment
No end appears to be in sight for the writer's strike in Hollywood.
CNBC's
Julia Boorstin joined the "Fast Money" crew to discuss the entertainment stocks. Boorstin explained that if the strike continues through the winter, television programming will start to feel the negative effects for the first quarter of 2008.
Disney
(DIS) - Get Report
and
News Corp
(NWS) - Get Report
are diversified the best to weather the storm and
CBS
(CBS) - Get Report
could be hurt the most by the strike.
Najarian remarked that consumers are going to the internet for entertainment and his play is
(GOOG) - Get Report
. On the other hand, Finerman says play internet advertising with
ValueClick
(VCLK)
. Adami and Macke both like Disney.
(Check on the performance of a portfolio of entertainment stocks on Stockpickr.com
.)
America on the Cheap
Foreign companies are quickly moving in to buy American companies off the weak US dollar. Macke expects that the next plays will be in the entertainment sector. He would look to buy
Take-Two
(TTWO) - Get Report
and
THQ
(THQI)
for potential takeover plays.
Adami mentioned that rumors floating around Wall Street are saying that the mining sector is in play. His pick is
United States Steel
(X) - Get Report
for a takeover opportunity. Finerman's most interesting idea is
Tiffany's
(TIF) - Get Report
for an acquisition play. Najarian likes
Alpha Natural Resources
(ANR)
for a takeover play in the energy sector. He also mentioned that big pharmaceutical firms like
Sanofi-Aventis
(SNY) - Get Report
and
Novartis
(NVS) - Get Report
could be looking to buy biotech companies to improve their pipelines.
Biotech Conference
News out of the American Society of Hematology Conference was moving biotech stocks on Monday. Najarian explained that
Celgene
(CELG) - Get Report
had disappointing news at the conference and the stock plunged 14%. On the flip side,
Millennium Pharmaceuticals
(MLNM)
traded higher after the firm reported positive results for their drug Velcade. Najarian thinks the selling on Celgene was overdone and the stock is presenting a buying opportunity at these levels.
Dividend Cuts
Washington Mutual
(WM) - Get Report
cuts its dividend to 15 cents a share, slashes jobs and sets capital infusion. Finerman wasn't the surprised with the dividend cut. She mentioned that her firm went short
MBIA
(MBI) - Get Report
on Monday and she expects more bad news to come. Adami says he loves
U.S. Bancorp
(USB) - Get Report
for a bank play because Warren Buffett holds a big stake and the company has no exposure to subprime. Finerman thinks that
Citigroup
(C) - Get Report
could be the next bank to cut its dividend.
(Take a look at Warren Buffett's portfolio on Stockpickr.com
.)
Strong Performers
Housing stocks put a in a strong performance Monday as short sellers cover ahead of the Fed meeting. Najarian mentioned that he is seeing bullish options activity in
Pulte Homes
(PHM) - Get Report
and
D.R. Horton
(DHI) - Get Report
. Adami thinks
Home Depot
(HD) - Get Report
is cheap on valuation and will be the stock of 2008. However, Finerman prefers
Lowe's
(LOW) - Get Report
for its strong balance sheet.
McDonald's
(MCD) - Get Report
hit an all time high on Monday after the burger giant reported that monthly sales went up 8.2%. Macke tells investors they need to own McDonald's. Adami points out that as long as McDonald's can hold onto global growth in Asia, the Middle East and Africa the stock will keep going higher.
Texas Instruments
(TXN) - Get Report
trades up 5% after hours off a positive mid-quarter update. This is a great opportunity to sell TXN, according to Najarian. Adami mentioned that he likes
Intel
(INTC) - Get Report
above $26 in the semiconductor sector.
Lafarge
(LFRGY)
announced plans to buy a cement unit from Egypt's Orascom for $12.9 billion. Finerman thinks a takeover could happen for
Texas Industries
(TXI)
. Najarian also likes TXI and he said keep an eye on
Martin Marietta Materials
(MLM) - Get Report
. But Adami loves
Jacobs Engineering
(JEC) - Get Report
for the firm's strong backlog.
POPS&DROPS
Pops -
Caterpillar
(CAT) - Get Report
traded up 3% after Bear Stearns made some positive comments on the equipment maker. Adami maintains that CAT is cheap and also a buy.
Cadbury Schweppes
(CSG)
traded up 1% after Nelson Peltz announced he is teaming up with Qatar to increase his stake in the company. Finerman remarked that Peltz has deep pockets and she likes this news and the stock.
LDK Solar
(LDK)
traded up 29% after the Chinese solar company signed a 10-year deal with a German solar cell maker Q-Cells. Najarian advises shareholders to take some profits.
Rite Aid
(RAD) - Get Report
traded up 9% after Lehman Brothers reiterated its $7 price target. Adami explained RAD is a lottery ticket that will pay off.
NYSE Euronext
(NYX)
traded up 3% off a positive Barron's mention. Najarian points out that the exchanges are "money printing machines."
Nasdaq
traded up 3%. Finerman agrees with Najarian. The deals keep happening for the exchanges and Nasdaq has momentum.
Bankrate
(RATE)
traded up 20% after the company reported higher than expected 2008 revenues. Macke suggests covering your shorts in Bankrate.
Drops -
Overstock.com
(OSTK) - Get Report
fell 22% after CEO Patrick Byrne said fourth-quarter gross margins might be lower then previously expected. Macke tells investors to run away from OSTK.
Myers Industries
(MYE) - Get Report
fell 31% after Goldman Sachs delayed its $800 million acquisition of the plastic and rubber firm. According to Finerman it's a good company, but she wouldn't touch it here.
Palm
(PALM)
fell 2%. Macke steers viewers away from this stock.
Final Trade
The team starts the week with their favorite trades for the audience.
- Macke recommends THQ (THQI) .
- Adami likes U.S. Bancorp (USB) - Get Report for a play on Warren Buffett.
- Najarian favors EMC (EMC) .
- Finerman picked Saks (SKS) .
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