'Fast Money' Recap: Energy Trade On?
NEW YORK (
) -- The markets were mixed Monday ahead of the midterm elections and the prospects of another round of quantitative easing.
The
Dow Jones Industrial Average
was up 6.13, or 0.06%, to 11, 124.62 and the
S&P 500
rose 1.12, or 0.09%, to 1,184.38. The
Nasdaq
slipped 2.57, or 0.10%, to 2,504.87.
The trading panel on
CNBC
's "Fast Money" TV show began with a discussion of the energy trade, which topped the tape.
Joe Terranova said oil is finally beginning to move to the upside and called it part of the global growth story that will benefit the integrateds, drillers and service companies. He said the energy trade will be a beneficiary of QE2.
For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
3 Stocks I Saw on TV |
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Terranova said the SP Energy Index has reached a golden cross for the first time since July 2009, when it triggered a 3-month market return of 10% and 6-month return of 22%.
Steve Cortes, though, said he was not a believer in the oil story. He said crude hasn't gone anywhere in the past six months. He said one can only be bullish in crude if there is surging emerging market demand, and he said that's not happening.
Steve Grasso said he is long oil because of all the momentum he's seen behind the trade.
Melissa Lee, the moderator of the show, said the volatility index is creeping higher. Karen Finerman said she was hanging on to her puts on the index and her general belief of buying on rumor and selling on news. Finerman said a lot of people believe the market is heading lower on the news this week.
Brian Kelly was more optimistic. He said he is not selling on the news because he's encouraged by the prospects of a normalized business cycle. He said he was looking to invest in transports and dry bulk shippers.
If there is a selloff, Terranova said he would be buying
Apple
(AAPL) - Get Report
on a pullback to $290 as well as any cloud computing names and anything tethered to the emerging market like energy and copper.
Stephen Weiss said he would be looking to get into transports and consumer discretionary stocks in the early cycle of an economic recovery. His picks included stocks such as
Nordstrom
(JWN) - Get Report
and
Fedex
(FDX) - Get Report
.
Cortes said he was broadly bearish on retail and was looking to short
Target
(TGT) - Get Report
.
In a trading the vote segment, Ed Mills, FBR policy analyst, said the West Virginia and Illinois Senate races will be key because the winners will be seated right away and be in a position to decide on the Bush tax cuts.
Lee brought in Jesse Eisinger, a senior reporter for Propublica, which reported that the SEC is investigating whether
JPMorgan Chase
(JPM) - Get Report
allowed a hedge fund to improperly select assets from a deal backed by sub-prime loans.
The deal, called Squared, was completed in May 2007 and involved a collaterized debt obligation.
He confirmed the seriousness of the investigation. Finerman said she didn't think the report was as dramatic as it sounded.
In the tech space,
Microsoft
(MSFT) - Get Report
was up, along with
Intel
(INTC) - Get Report
.
Terranova was down on Microsoft because it hasn't established what it wants to be. He said the stock has languished since its latest earnings report.
Finerman said she liked Microsoft's recent earnings, saying its valuation is "beyond compelling." Grasso said hedge fund managers are nervous about the stock and believe a big corporate shakeup is needed.
Last week's air cargo terrorist threat has sent security firm trades higher. Deepak Chopra, CEO of
Osi Systems
(OSIS) - Get Report
, said he expect his company, which manufacture monitoring equipment, will benefit from growth opportunities for the next couple of years. He also sees a greater threat than air cargo in ship containers.
Lee brought in Scott Burk, an analyst with Oppenheimer, who raised his rating on
Halliburton
(HAL) - Get Report
to outperform from perform despite reports linking the company to the use of unstable cement on the BP well in the Gulf of Mexico.
Burk defended his call, saying the cement was adequate and Halliburton was protected from environmental liability under an indemnity clause between it and BP.
In the final trades, Terranova liked Target. Grasso said to sell natural gas. Finerman liked
St. Jude Medical
(STJ)
. Grasso liked liked
Peabody Energy
(BTU) - Get Report
but to sell below $52.
--Written by David Tong in San Francisco.
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