The stock market started off the new year in an ugly fashion on Wednesday with oil briefly touching $100 a barrel. The Dow finished down 220 points and the Nasdaq dropped 42 points. With gold also hitting a record high, the crew at CNBC's "Fast Money" called in Dennis Gartman to talk about commodities and Charlie Gasparino came by to discuss the financial sector.
Jeff Macke agreed with Gartman's hedge trade on gold. Jon Najarian mentioned that he took profits in some of his long options positions in the mining stocks on Wednesday. Tim Seymour thinks with gold trading at such high prices mining stocks like Harmony Gold Mining ( HMY) and Gold Fields ( GFI) are takeover targets. Lastly, Gartman mentioned he is long soybeans, corn and wheat. (Here's one manager's approach to gold on Stockpickr.com Gold Stocks.)
(Take a look at this portfolio of financial stocks on Stockpickr.com Finest Financials Index.)
Analysts are expecting non-farm payrolls to add 50,000 jobs in December. How should traders position themselves ahead of the jobs report on Friday? Macke says the trade is to buy the Retail HLDRS ( RTH) at $90 because he feels the jobs report will show more then 50,000 jobs added.
Macke wants to play the other side of the trade and he would buy defense stocks if they get sold off. He thinks it's way too early to predict who will win the elections.
Drops - United States Steel ( X) fell 6%. Seymour advises viewers that it's time to take some profits with steel prices at 7-month highs. Unibanco ( UBB) fell 5% on no news. Seymour would wait and watch for a spot to buy UBB. BJ's Wholesale Club ( BJ) fell 12% after JP Morgan downgraded the wholesaler. Macke explained that this is a club you don't want to belong too. Goodyear Tire ( GT) fell 5% after Goldman Sachs initiated coverage of the stock with a neutral rating. Adami thinks with the high short interest on GT it's worth keeping an eye on.