The U.S. stock market closed on the downside Tuesday. Federal Reserve Chairman Ben Bernanke made comments about the state of the U.S. economy, and concern about Lehman Brothers (LEH) added to negative sentiment.
"Fast Money" TV show, Jeff Macke said he didn't know what to make of today's headlines. He observed that Lehman stock trades "like a stuck pig." If a bank has to tell people how liquid they are, it isn't liquid, he said.
Pete Najarian pointed out that the traders had been observing put activity in the
Financial Select Sector SPDR
and Lehman. He said that there has been continued put activity in Lehman, but he doesn't think Lehman is another Bear Stearns. He said Wall Street is concerned and volatility is very high.
Finerman said Lehman can go to the markets to get liquidity, and may have to even if the move is dilutive to the stock. She said the lesson of Bear Stearns is that if a broker doesn't have enough money and rumors go out of control, it's in danger.
3 Stocks I Saw on TV
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Adami said he'd normally call today's trading in Lehman shares a capitulation day, but this time he advised viewers to stay away from the stock. There's further downside, he said. He also expressed skepticism that
or other banks may buy Lehman.
Finerman said she wasn't tempted to buy Lehman on the dip in share price. Macke pointed out that
and Goldman shares didn't go down very much today, which meant there weren't many buying opportunities generally.
announced today that it was getting rid of its Hummer brand. Shares of
also fell today.
Adami said he would not buy GM here. He'd rather be in
, and investors should buy it on any pullback, he said.
Najarian said that $4 a gallon for gasoline has everybody buying Hondas and Nissans. He said consumers are getting into smaller cars.
Billionaire investor Carl Icahn announced today that if his chosen board is elected to
, he will seek the ouster of CEO Jerry Yang.
Najarian said trading volume for Yahoo! has "dried up." He said that options indicate that a deal between Yahoo! and
won't get done at much of a premium.
The traders moved on to discuss the housing market. Adami said that there may be a bottom in shares of homebuilders
The crew then observed that the natural gas trade appears to keep working. Najarian said that investors who don't want exposure to specific stocks should stick with the
U.S. Natural Gas
ETF. He mentioned some individual stocks that are working, including
Elsewhere in commodities, Adami said
still look good. He said he prefers U.S. Steel.
Ben Bernanke made a case for the strength of the U.S. dollar today. Tim Seymour said that the Fed is doing the heavy lifting for the Treasury. He said investors should be wary of weak-dollar trades. He said the commodities bull market could unwind if the dollar rallies.
On the other hand, he said that China stocks like
China Petroleum & Chemical
could go up in such a scenario.
Macke observed that the charts look broken in the commodities space.
Joe Terranova, chief alternatives strategist at Phoenix Investment Partners, joined the show to talk about oil's short-term prospects. He said that if crude hits $120, the trading will be very exciting. He said oil could go down to $115 if it breaks through the $120 level. He said he's bearish on oil by way of shorting
, getting long
, being long
, owning Canadian currency and being long Goldman Sachs. He also instructed viewers to keep an eye out for opportunities in natural gas.
The United Nations said today that world food production needs to increase 15% by 2030. The gang welcomed "Commodities King" Dennis Gartman to the show to talk about where soft commodity prices are headed. He said the U.N. estimate is probably on the low side, but he thinks U.S. innovation will increase per-acre yield on crops. He predicted a long-term bullish trend with short-term hits to prices.
Najarian said he sees heavy call activity in
. He said the company is a play off GM and
and reminded viewers that the two automakers have been executing well internationally. He also pointed out heavy call activity in Nucor.
traded on unusual volume today.
popped on strong earnings. Macke said there has been a small rally in specialty retail. The stocks are heavily shorted, he said.
The traders then ran another "When God Moves Markets" segment, this time discussing the impact of hurricanes on retailers and insurance companies. Adami said he likes
because it has a nice dividend and will probably go higher from here.
Najarian said that when storms come and insurance stocks dip, that's a buying opportunity.
Macke said to sell any retailer that blames the weather for its troubles. He said storms may be good for homebuilders because they gut inventory.
Gulf Island Fabrication
is a potential buy if hurricanes hit the gulf.
Pete Najarian told a viewer he likes
long-term prospects in light of aging baby boomers. He said he also likes the pipeline.
Adami told a second viewer he sees further downside in
Macke said that he'd take the other side of a pop in health care stocks if Hillary Clinton wins the Democratic primary.
Macke selected the
Short Dow30 ProShares
. Adami chose
. Finerman picked
. Najarian said he likes