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
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
blew out the numbers. He feels that
will kill the numbers when they report. (
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?
Charlie Gasparino joined the crew to discuss if the brokers are a buy now. Gasparino feels confident about most of the brokers except
. 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
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
which has 60% of the float short. (
Take: Jim Cramer said recently, "Toll Brothers should buy Hovnanian." To read more on what Cramer said,
Additionally, he recommends
for a trade. Finerman continues to speak highly of
, 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
exploded higher on the Fed cut. Najarian thinks that CAT has much more upside to come. (
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,
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
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
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
as the holiday season approaches?" Macke is positive about Tiffany's and
. Macke says this stock is going over $100 and you have to be long it.
Pops & Drops
traded up 5%. Macke suggests getting long CAT.
popped 6% off the Fed rate cut. Finerman loves this stock.
traded up 5%. Adami believes that Alcoa could be bought out by
traded up 6%. Najarian believes in the growth story of this stock.
popped 6% on takeover speculation. Finerman hints that these rumors have been around for awhile.
fell 1.5% after lowering its profit outlook. Najarian was impressed the stock rallied back from Monday's slide. He is short this stock.
fell 1% after Bank of America cut the price target. Adami says buy it with both hands. (
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,
After an exciting day in the markets, the team signs off with their final trades.
- Macke is shopping for Macy's (M) - Get Report.
- Finerman recommends Altria (MO) - Get Report.
- Adami would buy Nucor (NUE) - Get 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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