The Federal Reserve cut interest rates a quarter-point on Wednesday and the stock market surged higher. The crew at CNBC's "Fast Money" analyzed the rate change and how investors can profit from it.
Jeff Macke maintains that the Fed is concerned about growth and inflation going forward. He ventures that the Fed rate cut is bearish for financials.
Biggs Expects Surge
Barton Biggs of Traxis Partners joined the "Fast Money" crew to share his take on the markets. Biggs thinks the Fed did what it should have done and the market is being set up for a big surge higher. He also mentioned that he is hearing from the prime brokers that hedge funds are at their lowest levels of being net long in 4 years. He expects a stampede into year end in big cap big multinationals, tech, Asia and emerging markets.
Biggs feels China right now is just like U.S. tech stocks in early 1999. He thinks the investment banks are signaling they will perform well into year end. The commercial banks he feels are a tougher story. He pointed out that
is too cheap. Lastly, Biggs mentioned that his favorite position right now is investment banks and he has been adding to that position recently.
Dennis Gartman Take
Dennis Gartman, author of The Gartman Letter, another guest on "Fast Money" discussed his take on the commodity space. Gartman thinks Barton Biggs is right about a stock market melt up into year end. He also mentioned its total nonsense in the crude oil market right now. Gartman is long natural gas and he wouldn't be short crude oil. He is short financials and he thinks
( CFC) goes to zero in six months. Gartman continues to recommend buying commodities like wheat, gold, copper and steel. He predicts that oil will go to $100, but even at that level he isn't interested in shorting it. Lastly, he mentioned that he has never seen a trade so one sided as the short U.S. dollar trade.
Rate Cut and Utilities
Could the utility and retail stocks be in trouble if the fed is done cutting rates? Guy Adami mentioned that
Public Service Enterprise Group
is due to report earnings Thursday and investors should look to take profits. He sees trouble for the utility stocks if the Fed stops cutting rates. He would also look to take profits in utility play
( CEG). Pete Najarian says on pullbacks it's an opportunity to get long copper names and Carter Worth also likes copper here.
Macke feels even with the rate cut he doesn't want to get long the best retail stocks. Instead of buying on dips, he would short retail stocks when they trade up. Macke also noted that
has a big short position building and they keep missing earnings.
are set to report earnings on Thursday and Friday.
Julia Boorstin joined the "Fast Money" crew to give her take on the media stocks. Boorstin thinks investors could see some upside in Viacom from the impact of the movie Transformers. She wasn't as optimistic on CBS, which she says is struggling to gain market share in the youth demographic. CBS gets 80% of its revenues from advertising and the potential writers strike could hurt them.
Najarian tells investors to play the media space with
. However, Adami would buy
and he predicted shares could hit $24. Macke pefers
long and CBS short.
(Check out this investor's media portfolio on Stockpickr.com,
Health Insurer Trade
is set to report earnings on Friday. Worth mentioned that Cigna has beaten earnings six out of the last six quarters. Worth likes the chart and he would get long ahead of earnings. Macke feels traders can play the health insurer stocks long against the "short political trade" because nothing ever happens politically to change things.
Word on the Street
Crude oil hit another record Wednesday crossing $95 in after hours trading. Najarian says we're seeing tons of speculation in crude oil and those speculators are looking for even higher prices. Worth thinks the move in oil is overdone and is putting in a top. In Macke's opinion, the oil market is irrational and will kill the last short before it falls back to somewhere in the $70's.
trades above $700 on speculation the firm will enter the mobile phone market. Najarian mentions that Google trades on a cheaper 2008 valuation then
right now. He also recommending that investors keep an eye on
. He thinks its possible Apple will announce a stock split at Macworld in January. Macke says make sure you have an exit plan in Google. Najarian noted that options players are buying calls on Google all the way up to the $800 strike. Adami mentions if you want a "Fed proof trade" buy
surges 20% as earnings destroy Wall Street estimates. Adami recommends taking some profits here. He still loves it in the longer term for a sea change story.
falls 21% after hours on disappointing earnings. Macke says people have been short Crocs the entire way up and finally the bears won one. He advised investors not to touch this stock. Najarian says Crocs is not showing investors that it can continue their growth and that is a problem. Worth mentions when a trade gets too crowded like Crocs, who is left to buy?
( ABK) and
continues to slide as investors fear more problems are ahead for these insurers. Worth says MBIA and Ambac have more downside to come. Najarian says the trade is to short these through a put spread. Worth says the big banks didn't respond to the rate cut and that is a bearish signal.
Happy 52-Week High
Pops & Drops
traded up 4% on news the telecommunications firm is cutting 4,000 jobs. Carter warns investors to stay away.
traded up 10% on strong profits. Take precautions, says Adami and take profits.
( SIRF) traded up 28% on strong profits that beat Wall Street estimates. Najarian points out the GPS space is moving.
Chipotle Mexican Grill
traded up 4% after reporting a 72% bump in profits. Worth counsels viewers to stay with CMG because he sees more to come.
traded up 7%. Adami thinks BYD is a takeover play.
iShares FTSE/Xinhua China 25 Index
traded up 3%. Worth says stay away it's doubled in the last six months.
( AMLN) fell 4% even after a positive report for diabetes drug Byetta. Najarian reminds viewers that Byetta is in Phase II testing and isn't set to launch yet.
( LNET) fell 14% after issuing lower earnings guidance. Macke declares LNET is dead money.
Buffalo Wild Wings
plunged 21% after reporting disappointing earnings. Macke advises getting out of the entire casual dining space.
- Macke recommends getting long Microsoft (MSFT) - Get Report.
- Adami says buy Intel (INTC) - Get Report above $26 and he thinks it's heading to $30.
- Najarian likes Apple (AAPL) - Get Report.
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