'Fast Money' Recap: Like Japan

The trading panel discussed on how the U.S. economy is facing the kind of deflationary environment that Japan has struggled with.

Author:
Publish date:: Aug 13, 2010 6:16 PM EDT

The trading panel discussed on how the U.S. economy is facing the kind of deflationary environment that Japan has struggled with.

NEW YORK (

TheStreet

) -- The markets sagged Friday on continued angst about the economy.

The

Dow Jones Industrial Average

lost 16.80, or 0.16%, to 10,303.15. The

S&P 500

fell 4.36, or 0.40%, to 1,079.25, while the

Nasdaq

dropped 16.79, or 0.77%, to 2,173.48.

Jon Najarian said on

CNBC

's "Fast Money" show that it was a "lousy" trading week, with very little volume and very little to trade.

Tim Seymour said he was discouraged by the negative data coming from overseas in countries such as China and Australia. Joe Terranova said investors are waiting for a reallocation away from corporate and government debt to equities.

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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Guy Adami said the move to the bond markets is accelerating, setting up for what he believes will be a "critical" period for the technicals next week.

Patty Edwards said next week will be the "big tell" for some big retail earnings coming out.

Najarian said the S&P seems to be in a range of 1,020 to 1,120 with a possible breakout on Labor Day.

In the deal of the day, Melissa Lee, the moderator of the show, said

Blackstone

(BX) - Get Report

has agreed to buy

Dynegy

(DYN)

for $4.7 billion. The deal calls for Blackstone to sell Dynegy's natural gas plants in California to

NRG Energy

(NRG) - Get Report

Terranova called it an excellent deal for Blackstone, which is putting up $540 million and assuming $4 billion in debt, and NGR Energy, which will be getting exposure to natural gas on the West Coast.

Lee turned the panel's attention to what worked this week: gold, which was up 1%; the

iShares Barclays 20+ Year Treasury Bond ETF

(TLT) - Get Report

, up 2%; and the U.S. dollar, up 3%.

Dennis Gartman said the U.S. is in a disinflationary environment like Japan's and that Treasuries and corporate debt securities are going to do well under these circumstances. He said the situation won't turn around until there is an expansion of the monetary base, gold moves to $1,300 an ounce and copper gets stronger.

Turning to GM's long-awaited IPO, Lee referred to a

Reuters

dispatch that said that the automaker is considering opening up 20% to 30% of the offering to retail investors.

Seymour sees a good reception for the IPO for an automaker that is coming back "lean and mean" and expanding globally. Gartman doubts whether it will be a "blowout" IPO but said it's a good idea to let the public in on the offering.

Shifting to tech, Lee said

Research In Motion

( RIMM) launch of its Torch this week came with little fanfare and tepid reviews. Adami said it may be time to get into the stock.

Looking ahead to next week, Michael Block, chief equities strategist for the Phoenix Partners Group, said he's staying away from companies with weak guidance like

Cisco

(CSCO) - Get Report

and

Hartford Group

(HIG) - Get Report

Edwards said she was looking with trepidation at next week's retail earnings. She said

Target

(TGT) - Get Report

has issues with its credit cards, and

Wal-Mart

(WMT) - Get Report

needs to plug some vacancies in management.next week retailers.

Dan Greenhaus, a chief economics strategist with Miller Tabak, said it's tough to make any fixes in the economy when the private sector is busy deleveraging. He said the

Fed

has done what it can and stressed the need for changes in fiscal policy and spending.

He said he believes the Bush tax cuts will be extended to lower income consumers.

In the final trades, Seymour liked

Gol Linhas Areas Inteligent

(GOL) - Get Report

. Adami liked

Anheuser-Busch InBev

(BUD) - Get Report

while Terranova liked

Visa

(V) - Get Report