'Fast Money' Recap: Still on Board With Microsoft
Stocks in the U.S. closed the week on a mixed note Friday as investors digested a number of earnings reports, weak consumer-sentiment data and record oil prices. The Dow added 42 points, and the Nasdaq fell 5.99 points.
On
CNBC's
"Fast Money" TV show, the traders discussed
Microsoft's
(MSFT) - Get Microsoft Corporation Report
weaker-than-expected sales numbers. Guy Adami said the quarter was fine and said guidance for next year was fantastic. He still believes the stock is screaming buy at current levels. Karen Finerman said she is happy to own the stock at current prices. Jeff Macke disclosed that he bought shares in the software giant on Friday.
Finerman looked at a few options that Microsoft should consider as the merger deadline for
Yahoo!
(YHOO)
approaches. She said Microsoft could drop the bid, bump it, nominate new directors or exchange the offer for cash and stock. Her advice was to exchange the offer. Macke said that if he were running Microsoft he would tell Yahoo! to get bent. He disclosed that he sold that last of his Yahoo! shares on Friday.
Oil Boom
Crude oil prices spiked to almost $120 a barrel after news broke that a U.S. cargo ship fired at two Iranian speed boats. Addision Armstrong, a
CNBC
on-air contributor and director of market research at Tradition Energy, joined the traders to discuss his take on oil. He said that the interesting thing is that the Iran confrontation was 24-hour-old news, and it still moved the oil market. He said oil looks strong, and he isn't convinced that the dollar's strength is here to stay.
Najarian questioned Armstrong about the strength on natural gas. He responded that natural gas looks incredibly strong, and he said the futures contracts will trade up to $11.70. He added that large speculators are net short by the highest amount in history.
Najarian recommended that investors look at the oil service sector. He added that there is market speculation of a deepwater discovery near Brazil, and this could be bullish for names like
TheStreet Recommends
Pride
( PDE),
Transocean
(RIG) - Get Transocean Ltd (Switzerland) Report
and
Noble
(NE) - Get Noble Corporation plc Report
. He also likes the
Oil Service ETF
(OIH) - Get VanEck Oil Services ETF Report
which broke out this week and trades at 11 times forward earnings.
Gold and Dollar Talk
Gold prices broke a two-day losing streak, and the dollar rose sharply. Adami said he doesn't like the price action in gold, especially after Dennis Gartman recently went bearish on the yellow metal. He predicted the dollar will reverse big time in the second half of this year. If that happens, he said, the entire commodities complex will get crushed. Macke said the dollar is done going down, and nothing was more evident of that than oil and the dollar both trading in tandem to the upside.
Chart of the Day
The traders took a look at the chart of hot agriculture name
Potash
(POT)
. Najarian explained that charts don't go straight up forever. He said he doesn't think the ag names are done going up and said almost all of them have reasonable valuations. Adami recommended that investors pick up this week's issue of
Vanity Fair
for a great piece on
Monsanto
(MON)
.
All Hail the Rail
Adami said to watch
Burlington Northern
( BNI), which reports earnings before the bell on Tuesday. He advised investors to take some off the table around these levels. He mentioned that rail plays
Wabtech
(WAB) - Get Westinghouse Air Brake Technologies Corporation Report
and
Trinity
(TRN) - Get Trinity Industries Inc. Report
continue to rip higher. Najarian said the rails are doing well because of the ag and coal play.
He told investors to keep an eye on
Joy Global
( JOYG) and
Bucyrus International
( BUCY), which are the equipment makers that help get coal out of the ground.
Charging for Profits
Adami said the
American Express
(AXP) - Get American Express Company Report
numbers bode well for
MasterCard
(MA) - Get Mastercard Incorporated Report
. He also said to look at
Wachovia
(WB) - Get Weibo Corporation Report
if you want to get back into financial stocks. Macke steered investors toward
Goldman Sachs
(GS) - Get Goldman Sachs Group Inc. (The) Report
.
Fed Up With Rate Cuts
MKM Partners' Chief Economist Mike Darda joined the traders to discuss the upcoming
Fed
rate policy meeting set for Wednesday. Darda said he believes it will be "one and done" for the Fed. He explained that the rate-cut cycle is essentially over. He also mentioned he doesn't think the Fed will do an emergency surprise cut. Finerman explained that Fed member dissention could be signal that the central bank is done. Bottom line, the traders all say the Fed is going to be done.
Media Moves
Lehman Brothers media analyst Anthony DiClemente joined the traders to discuss his take on the media stocks ahead of their earnings reports set for next week. DiClemente said
Viacom
(VIA) - Get Via Renewables Inc. Report
has earnings momentum, and he expects
Discovery
(DISCA) - Get Warner Bros Discovery Inc Com Ser A Report
to continue to outperform.
He explained that
CBS
(CBS) - Get CBS Corporation Class B Report
has too much exposure to radio and TV stations, and those businesses have a lot of question marks. Disney is hitting on all cylinders, but the coming quarter will have tough comparisons, DiClemente said.
Playing Video Games
On Tuesday
Take-Two
(TTWO) - Get Take-Two Interactive Software Inc. Report
will be releasing the controversial video game
Grand Theft Auto IV
. Can investors make money off this? Macke said he doesn't believe that
Electronic Arts
( ERTS) really wants to buy Take-Two. Take-Two has bet the house on this game, said Macke. He said he believes the numbers out of the gate for the
Grand Theft
are going to be enormous.
Quicker Than the Ticker
The traders looked at their recent good calls. Fineramn told investors to buy
Philip Morris International
(MO) - Get Altria Group Inc. Report
. She was on the money, and MO went up 6% from her call. Adami recommended
Apache
(APA) - Get APA Corporation Report
. Shares of APA went up 12% since his call. Macke said buy
Apple
(AAPL) - Get Apple Inc. Report
on a dip before earnings. The stock ripped 11% higher from his call. Najairan picked
Goldman Sachs
(GS) - Get Goldman Sachs Group Inc. (The) Report
. He nailed the call, and GS advanced 16%.
Trader Radar
Canon
(CAJ) - Get Canon Inc. American Depositary Shares Report
shares were among the most actively traded on the
New York Stock Exchange
today.
Fast Fire
The traders took a look at some of their bad calls. Najarian had recommended
AMR
(AMR) - Get Alpha Metallurgical Resources Inc. Report
, but record oil prices took the stock down. He said that if you're in this stock, get out. Finerman said to buy Microsoft going into earnings. The stock fell 6% since her call, but she is sticking with the name for a longer-term story.
Macke had advised investors to get into
Starbucks
(SBUX) - Get Starbucks Corporation Report
. Since his call, the stock fell 13%. He said to stay out of the stock until Starbucks listens to him on how to fix the company. Adami had picked
Ameriprise Financial
(AMP) - Get Ameriprise Financial Inc. Report
because he said they have no subprime exposure. He was dead wrong, and the stock fell 11% from his call. He admitted he was wrong.
A Guest From the West
Neil Koehler the CEO of
Pacific Ethanol
(PEIX) - Get Alto Ingredients, Inc. Report
joined the traders to discuss ethanol. Koehler said that right now we're in an energy crisis, and we have a dangerous dependence on foreign oil. Ethanol is lower than the cost of gasoline and provides significant economic benefits, he said.
Najarian asked Koehler about liquefied coal. He said we need a whole host of new energy ideas to draw from like liquefied coal. Koehler explained that the government is mandating that we move away from fossil fuels and toward alternative energy sources that are renewable. He said that right now, ethanol is the best choice until a better technology or alternative energy choice comes along.
Final Trade
Macke said to sell
Activision
(ATVI) - Get Activision Blizzard Inc Report
. Najarian's son picked Disney.
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