'Fast Money' Recap: What Good Is Goldman?
Dylan Ratigan hosted CNBC "Fast Money" show Tuesday night. He started the show with a discussion of Goldman Sachs Group (GS) - Get Goldman Sachs Group Inc. (The) Report. He mentioned that Goldman CEO Lloyd Blankfein spoke at a Merrill Lynch conference today. Blankfein was quoted as saying "our reformation as a bank holding company isn't having a material impact on the way we operate our business."
Guy Adami said the problem is that Wall Street doesn't know how Goldman will make money going forward. He says "at some point the smartest guys in the room will come out and say something." Tim Seymour said the good news for Goldman is that value guys are looking at the stock. Karen Finerman says "the one good thing for Goldman is that credit default swaps have not moved out materially."
The "Chart of the Day" was the
Dow
. Ratigan pointed out that the Dow is stuck in the middle of the range. Adami says "the only edge you have in the market is the range, so sell the extremes and buy the dips."
Najarian said that if you want to trade the range, then play
Burlington Northern Santa Fe
(BNI)
at $80,
Norfolk Southern
(NSC) - Get Norfolk Southern Corporation Report
at $52 and
Union Pacific
(UNP) - Get Union Pacific Corporation Report
at $60.
Seymour said one interesting play is
TheStreet Recommends
Frontline
(FRO) - Get Frontline Ltd. Report
, which should announce a 35% dividend yield next week.
Seymour said the story of the day was the announcement that
American Express
(AXP) - Get American Express Company Report
gained emergency approval to become a bank holding company overnight. Najarian told viewers to look at
IBM
(IBM) - Get International Business Machines Corporation Report
and
Hewlett-Packard
. He says "if the emerging markets start to come back, these tech names will trade higher."
Ratigan asked the traders what they think of oil-related equity names. Adami explained that there is no money in the commodity market right now. He says "stocks such as
Exxon Mobil
(XOM) - Get Exxon Mobil Corporation Report
and some of the oil service names will be great plays early next year when the money comes back."
Seymour said to watch
Petroleo Brasileiro
(PBR) - Get Petroleo Brasileiro S.A.- Petrobras Report
, which is trading at three times earnings. Najarian told viewers that commodity play
Archer Daniels Midland
(ADM) - Get Archer-Daniels-Midland Company Report
is seeing a lot of bullish options activity.
Ratigan moved the conversation to China. Seymour said if he would be bullish on any emerging market, he would be more bullish on China. He said you can play China with the
iShares FTSE/Xinhua China
(FXI) - Get iShares China Large-Cap ETF Report
,
PetroChina
(PTR) - Get PetroChina Company Limited Report
and
China Mobile
(CHL) - Get China Mobile Ltd. Report
.
Finerman says "China is absolutely full of it, and the stimulus package is too little too late." Adami pointed out that
Jacobs Engineering
(JEC) - Get Jacobs Engineering Group Inc. (J) Report
traded down 7%, despite having a great backlog and big exposure to China's infrastructure build-out.
Ratigan brought up
General Motors
(GM) - Get General Motors Company Report
. He said the stock is at 66-year lows and a bailout appears to be certain. Jon Najarian said one thing General Motors,
Ford
(F) - Get Ford Motor Company Report
and
Chrysler
can do is sell clean diesel cars in the U.S. like they do overseas.
He says, "they can have these cars in this country in months, but they need to relax on crash testing and EPA." Finerman said we need to fix the union and labor problems at General Motors, or the bailout will not work. Najarian told viewers he is coving his short position in names such as
Cummins
(CMI) - Get Cummins Inc. Report
and
TRW Automotive
(TRW)
.
Hedge Fund Pains
The traders discussed some ways to play hedge fund liquidations with 13Fs due out this week that show some of the largest institutional holdings. Finerman said investors should read the 13Fs for Citadel Investment, Atticus Capital, Harbinger Capital and Pershing Square Capital. She says "they are very big holders of some stocks, and if you have seen stocks that have moved a lot, than that could be the reason."
Ratigan said investors should watch names such as
U.S. Steel
(X) - Get United States Steel Corporation Report
,
MasterCard
(MA) - Get Mastercard Incorporated Report
,
Alpha Natural Resources
(ANR)
and
Cliffs Natural Resources
(CLF) - Get Cleveland-Cliffs Inc. Report
.
Najarian mentioned that Wall Street whale Julian Robertson has been buying
Apple
(AAPL) - Get Apple Inc. Report
,
Visa
and
MasterCard
(MA) - Get Mastercard Incorporated Report
. He says "you have to like Visa at these levels."
Liz Claiborne CEO Interview
The crew spoke with Bill McComb, CEO of
Liz Claiborne
(LIZ)
about whether this year's holiday season is in trouble. McComb said he is grateful that he downsized the company a year ago. He says "woman's apparel and accessories are down 15% to 20%." He said the best period he can think of to compare the current economic crisis to is right after Sept. 11, 2001. McComb explained that Claiborne has cut capital spending by 50% and implemented additional expense controls for 2009.
Legg Mason CEO Interview
Legg Mason
(LM) - Get Legg Mason, Inc. Report
CEO Mark Fetting, joined the traders to talk about the state of the mutual fund industry. Fetting said now is the time to look at asset managers like Legg Mason. He explained that it's more deprecation of the market and not capital outflows that have hurt Legg Mason's assets under management. He says "Legg Mason Capital Management led by Bill Miller just got a big client to come in for $1 billion."
Trader Radar
Shares of
Tyco International
(TYC)
were among the most active names on the
NYSE
Tuesday.
Final Trade
Seymour recommended
Focus Media
undefined
. Adami picked
McDonald's
(MCD) - Get McDonald's Corporation Report
. Finerman said she bought some
(GOOG) - Get Alphabet Inc. Report
and sold some calls against it. Najarian told viewers to buy some puts on American Express.
This article was written by a staff member of TheStreet.com.
