It was a volatile week in the market with the whipsaw action keeping traders and investors on their toes. The crew at CNBC's "Fast Money" reviewed which companies fared well and which CEO's did not.
Drama at MerrillSpeculation is making the rounds on Wall Street that Stan O'Neal will be removed as CEO and Chairman of the Board from Merrill Lynch ( MER) possibly this weekend. CNBC's Charlie Gasparino joined the "Fast Money" crew to discuss what he is hearing about O'Neal leaving. Gasparino says rumors are out that Larry Fink the CEO of BlackRock could be named the new Chairman and the CEO position might be split between Greg Flemming and Bob McCann. Gasparino told viewers that O'Neal is telling people close to the situation that he will be gone soon. Najarian declares he still would be a buyer of Merrill and that if O'Neal doesn't go, he expects the stock to go down to $55. However, Macke advocates shorting Merrill when O'Neal leaves and he compared it to the short of Home Depot ( HD) when Bob Nardelli left. Gasparino predicts the stock will pop if Merrill gets the right guy in. Macke would love to see the stock pop, so he can short it.
Action HeroesIn late breaking news, Dylan Ratigan reported that activist investor Carl Icahn has sent a letter to the board of BEA Systems ( BEAS) saying its time to come to the negotiating table with Oracle ( ORCL). Rumors are that BEA Systems wants $21 share and Oracle offered $17. The offer is set to expire on Sunday. Finerman agrees with Icahn and thinks the deal will get done. (Check out Icahn's portfolio on Stockpickr.com at Carl Icahn.)
Tech Ticking UpMicrosoft ( MSFT) trades up 15% after profits and revenues handily beat Wall Street estimates. Jeff Macke remarks that the earnings were great especially from Microsoft and the shorts are getting crushed. Karen Finerman feels the market is very confusing with tech performing well, but many financial stocks doing poorly. Guy Adami prefers Intel ( INTC) here and noted that the Citigroup analyst put a $33 price target on the name. Najarian favors Apple ( APPL) and he would stay away from everything in the chip sector. . Najarian noted the options in Yahoo ( YHOO) were every active Friday. He also pointed out that Google ( GOOG) and Yahoo are moving together. Macke declares that Yahoo is getting it together and he is long the stock. However, he tells traders they can't be short the financials in front of a possible Federal Reserve rate cut and you can't be short technology with MSFT earnings.
Economic ThoughtsNext week the Federal Reserve will meet to decide on interest rates and the jobs report will be released. Najarian states that the Fed is going to cut and that's why the financials flew Friday. In his opinion, its the jobs report that investors should pay attention to. He advocates staying with the good sectors like technology and asset mangers and avoid the rest. Macke and Finerman agree that the jobs number will be the best indicator for the economy.
Earnings Week AheadCrude oil hits another record Friday trading above $92. Adami points out that Exxon ( XOM) isn't rallying into record oil prices and suggests the company might miss earnings. XOM has a rich valuation and the price action signals that it may move lower. Adami admits that Exxon scares him in front of earnings. He warns that if Exxon reports bad results, it could take the Dow lower. Finerman mentioned that Kirk Kerkorian's Tracinda is looking to buy 16% of Tesoro ( TSO). She envisions the deal playing out as follows:
- Kerkorian tenders 16% position
- Kerkorian picks representatives on board
- Kerkorian makes a bid for entire company or another firm will make a bid