NEW YORK (
) -- The markets ended lower Tuesday on inflation fears.
Dow Jones Industrial Average
was down 49.05, or 0.47%, to 10,452.20, while the
dropped 6.18, or 0.55%, to 1,107.93. The
lost 11.05, or 0.50%, to 2,201.05.
Guy Adami expressed concerns on
's "Fast Money" TV show about the lack of leadership in the financials. He said
are sharply down from their 52-week highs. "The financials are trying to tell you something," he said.
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 onTV
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Tim Seymour agreed with Adami's assessment but also pointed out the tape has fare well, with the S&P finishing above the 1,100 level that it has been struggling with.
Gary Kaminsky said worries about higher interest rates come with a recovering economy, as evidenced in today's encouraging Produce Price Index numbers. He predicted 80% of where the market will be early next year will depend on what happens with interest rates.
Joe Terranova was befuddled with all the level of pessimism in the market. He said there's been a tremendous rally in the capital markets and now there's a foolish attempt to tried to pick a top for the market. He said there's more upside to the market and specifically pinpointed Jan. 11 as the date when that will come when the next round of quarterly earnings begin.
He said the fears of a higher dollar having a negative effect on the equities haven't materialized. He said the rollover of the S&P hasn't happened during the dollar's recent ascent.
However, Kaminsky maintained there will be a minor correction in the market if interest rates rise next year.
Melissa Lee, the moderator of the show, noted that the euro was falling today against the dollar over growing sovereign debt concerns in Austria and Greece. Seymour said it might be an opportunity to sell the dollar because of the piling into the dollar because of the weakness in the euro.
Lee noted comments earlier in the day by noted hedge fund manager James Chano about a credit bubble in China. Adami said Chanos has "a history of being right" and that if he is correct about China, it could lead to the loss of the commodity and S&P trades.
But Seymour took issue with Chanos' comments. He said there may be an asset bubble in China but he also said there is solid evidence of real demand in the country.
Kaminsky warned about the consequences of "shorting a country." He said investors can get "severely damaged" if they try.
Lee noted that
traded higher after selling $10 billion worth of stock. Adami said Wells Fargo was in "no-man's land," adding the next trade would be to short it when it hits $27.50.
Terranova said the best financial stocks to be in now might be asset managers like
Lee brought in Jeff Palma, head of global equity strategy for UBS, for his thoughts for the market in 2010. He said he sees the markets moving higher in 2010 though it will be a different sort of rally. He said it will less risky, more defensive and more about quality stocks.
He said the sectors that would do the best will be tech, consumer staples and energy. He said demand in emerging markets will be much stronger than the developed markets.
Shifting to crude oil, which broke a nine-day losing streak today, Terranova said the oil trade still faces a massive contango, inventory overhang and the dollar rally. He said there may be a further pullback into January before there is a shift in the index weightings from crude to natural gas.
Seymour, however, said he sees a 10% rise in oil between now and the end of the year, adding the rise in the dollar is not that "big of a deal" on the trade.
Kaminsky said energy companies will outperform because of the M&A activity in the sector. "Managers want to own energy names," he said.
Kaminsky said he liked
while Adami said
is an energy momentum stock that continues to work.
With the Federal Open Market Committee meeting this week, Lee brought in George Goncalves, head of fixed income rates strategy at Cantor Fitzgerald, to talk about the possibility of higher interest rates.
He said he doesn't expect the Fed to deviate much from its rhetoric this week. However, he warned of tough times for short rates in 2010 as the
moves to tighten monetary conditions. He said a rise in interest rates to 1% shouldn't hurt the economy.
Kaminsky agreed higher interest rates would not be a negative for the stock market but he said investors have been accustomed to a climate where interest rates are near zero.
Lee brought in Jim Flaws, the CFO for
to comment on the LCD market. He said the demand has been outstanding for LCD television sets. "Customers haven't backed down at all," he said.
He said the company is a low-cost producer of LCDs, relying on manufacturers in Korea, Taiwan and China. He also said the company has its own program to reduce costs.
In the final trades, Seymour liked
. Adami liked
. Kaminsky liked
. And Terranova liked
-- Written by David Tong in San Francisco
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