Fast Money Recap: The Bulls Are Running
The Fed's big 50 point cut sparked stocks Tuesday, and the crew at CNBC's "Fast Money" discussed why the bulls are running -- and in particular, what it means for financial stocks.
Pete Najarian proposes that Tuesday's action was all about the financials. As example, he points to the
Financial Select Sector SPDR
(XLF) - Get Financial Select Sector SPDR Report
call options, where he saw a ton of volume. Jeff Macke advises that you can't be short financials now.
Guy Adami continues to like financials, especially after
Lehman Brothers
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blew out the numbers. He feels that
Goldman Sachs
(GS) - Get Goldman Sachs Group Inc. (The) Report
and
Morgan Stanley
(MS) - Get Morgan Stanley Report
will kill the numbers when they report. (
RealMoney
TheStreet Recommends
Take: Andrew White said recently, "Morgan Stanley shares will likely continue to push higher, based on higher highs in technical indicators -- including moving average convergence/divergence, on-balance volume and relative strength." To read more on what White said,
All Clear on Wall Street?
Did the Fed rate cut on Tuesday signal all is now clear for Wall Street and the credit problems?
CNBC's
Charlie Gasparino joined the crew to discuss if the brokers are a buy now. Gasparino feels confident about most of the brokers except
Bear Stearns
(BSC)
. He maintains that Bear is the least diversified and is too tied to the credit markets.
However, if you do buy Bear, you only buy it for a possible takeover. Bear is the wild card in the broker sector for Najarian. Gasparino thinks the worst is over for Lehman and that Goldman will benefit the most from trading and a rebound in M&A activity. Macke says he is now bullish on the brokers.
Oil Thanks the Fed
Crude oil hit another record touching $81.51 and gold traded to $735, its highest level in 27 years. Dennis Gartman, publisher of
The Gartman Letter,
joined the show to comment on the action in commodities. The Fed decision shocked Gartman and he indicated that the stock market would continue to climb higher.
The Fed decision makes it clear to Gartman that the Fed isn't fretting inflation, so gold and oil will continue to go higher. Gartman's best trade ideas are
Suncor Energy
(SU) - Get Suncor Energy Inc. Report
and wheat.
Rate Cut Raises the Roof
The equity markets problems all began with concerns of poor lending practices in the housing market. Was the big rate cut on Tuesday a signal from Ben Bernanke that he will not let housing blow up?
Adami declares that housing stocks are back for a trade. He likes
Hovanian,
(HOV) - Get Hovnanian Enterprises Inc. Class A Report
which has 60% of the float short. (
RealMoney
Take: Jim Cramer said recently, "Toll Brothers should buy Hovnanian." To read more on what Cramer said,
Additionally, he recommends
Toll Brothers
(TOL) - Get Toll Brothers Inc. Report
and
Pulte Homes
(PHM) - Get PulteGroup Inc. Report
for a trade. Finerman continues to speak highly of
Home Depot
(HD) - Get Home Depot Inc. (The) Report
, which she owns, for its cheap valuation. She has been wrong on HD so far, but she is sticking with it.
Word on the Street
Cummings
(CMI) - Get Cummins Inc. Report
and
Caterpillar
(CAT) - Get Caterpillar Inc. Report
exploded higher on the Fed cut. Najarian thinks that CAT has much more upside to come. (
RealMoney
Take: Jim Cramer said recently, "Caterpillar's on the move: natural to go out at $75, there I would buy the September 70 calls." To read more on what Cramer said,
Global Notes
Emerging markets like China and Brazil soared on the rate cut. Tim Seymour, Principal at Red Star Asset Management, joined the crew to discuss the emerging markets. Seymour likes gold and
Brazil ETF
(EWZ) - Get iShares MSCI Brazil ETF Report
.
Face2Face
The Fast Money team takes mail from viewers. Ken from Kansas writes, "What happened to the recommendation to get out of gold if the Fed dropped its rates?" Adami reiterated his bearish stance on gold.
Evan from Connecticut wants to know, "Should I sell my October $195 call options on
Goldman Sachs
(GS) - Get Goldman Sachs Group Inc. (The) Report
now or is there still more upside?" Najarian feels strong about GS, but you should take half the position off before earnings.
Tory writes, "What is your outlook for
Tiffany's
(TIF) - Get Tiffany & Co. Report
as the holiday season approaches?" Macke is positive about Tiffany's and
Blue Nile
(NILE) - Get BitNile Holdings Inc. Report
. Macke says this stock is going over $100 and you have to be long it.
Pops & Drops
Pops-
Caterpillar
(CAT) - Get Caterpillar Inc. Report
traded up 5%. Macke suggests getting long CAT.
Target
(TGT) - Get Target Corporation Report
popped 6% off the Fed rate cut. Finerman loves this stock.
Alcoa
(AA) - Get Alcoa Corporation Report
traded up 5%. Adami believes that Alcoa could be bought out by
BHP Billiton
(BHP) - Get BHP Group Limited American Depositary Shares (Each representing two) Report
.
BHP Billiton
(BHP) - Get BHP Group Limited American Depositary Shares (Each representing two) Report
traded up 6%. Najarian believes in the growth story of this stock.
Wendy's
(WEN) - Get Wendy's Company (The) Report
popped 6% on takeover speculation. Finerman hints that these rumors have been around for awhile.
DROPS-
E*Trade
(ETFC) - Get E*TRADE Financial Corporation Report
fell 1.5% after lowering its profit outlook. Najarian was impressed the stock rallied back from Monday's slide. He is short this stock.
Boeing
(BA) - Get The Boeing Company Report
fell 1% after Bank of America cut the price target. Adami says buy it with both hands. (
RealMoney
Take: Jim Cramer said recently, "Boeing's on time, according to press reports, which means a September 95 call play might be important." To read more on what Cramer said,
Final Trade
After an exciting day in the markets, the team signs off with their final trades.
- Macke is shopping for Macy's (M) - Get Macy's, Inc. Report.
- Finerman recommends Altria (MO) - Get Altria Group Inc. Report.
- Adami would buy Nucor (NUE) - Get Nucor Corporation Report.
- Najarian indicates that Companhia Vale do Rio Doce is the real deal. (RealMoney Take: Vasu Vijayraghavan said recently, "CVRD doesn't look too shabby, and I am contemplating a long play on that front." To read more on what Vijayraghavan said, click here.)
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