Oil touched $100 a barrel for the second day in a row on Thursday and the stock market barely reacted. The Dow closed up 12 points and the Nasdaq finished down 6 points. The crew at CNBC's "Fast Money" took a look at oil, gold and agriculture.
Oil TradeJoe Terranova, Director of Trading at MBF Clearing Corp., joined the "Fast Money" crew to discuss his take on oil. Terranova explained that historically oil tends to get cheaper as the spring approaches and gas prices rise as the summer driving season approaches. He thinks this trend will increase the crack spread and benefit the refiners. Terranova recommends accumulating stock in the refiners heading into Martin Luther King Day and have the position in place by President's Day. He would then look to take profits in March if the trade works out. Jon Najarian thinks oil is displaying a head fake and is setting up to disappoint the bulls. He suggests shorting the refiners until mid-February and then flipping to the long side. Macke thinks these trades are very complicated, so he would simply buy United States Oil Fund ( USO). (Here's how the pros do it on Stockpickr.com Profunds Oil & Gas.)
BlingGold hit another new high Thursday trading up to $869.10. Tim Seymour predicts that with gold performing so strongly, the miners are ripe for takeovers. Having said that, he likes Harmony Gold Mining ( HMY) and Gold Fields ( GFI) for takeover plays in the gold mining sector.
Ag Stocks BloomAgriculture stocks were on fire Thursday after Monsanto ( MON) reported fist-quarter profits that nearly tripled. Adami remarked that this quarter was unbelievable and the story is real. He would stay with Monsanto, but he does think it will pullback. Najarian explained that traders are moving into agriculture stocks for their safety. Macke recommended not being piggish on these stocks and taking some profits in names like Agrium ( AGU), Potash ( POT), Mosaic ( MOS) and Monsanto. (Take a look at this portfolio on Stockpickr.com Agriculture and Fertilizer Index.)
Jobs Report PreviewThe December jobs report is set to be released on Friday morning. Michael Darda, the chief economist at MKM Partners joined the "Fast Money" crew to discuss his take on the jobs report. Darda explained that the data doesn't point to the US heading into a recession, but it does suggest the economy is slowing down. He feels that stock valuations are very reasonable when compared to bonds. Darda recommends going long stocks and shorting bonds if you have a 6-to-12 month time horizon. Macke says get long the Retail HOLDRS ( RTH) below $90 for a trade heading into the report. Tim Seymour explained that the bond market is pricing in a recession and he would continue to keep an eye on that development.
Word on the StreetGaming stocks took a beating as investors grow concerned about the growth prospects in Macau. Macke thinks now is the time to build positions in names like MGM ( MGM) and Las Vegas Sands ( LVS). Najarian agrees with Macke. State Street ( STT) explodes up 8% after the company issued a bullish forecast and took a $279 million charge for legal costs related to poor investments on subprime mortgages. Adami reminded viewers that he brought up this stock in September. He now feels the valuation on STT is getting a bit rich. Macke commented that the stock rallied because the company was proactive on the mistakes it made with their money market funds tied to subprime investments. Lenovo Group announces plans to enter the United States consumer PC market. Najarian thinks the play off this news is too short Dell ( DELL). He wouldn't short Hewlett-Packard ( HPQ) because he feels they're better positioned to handle the competition from Lenovo. Activist investor Bill Ackman says Target ( TGT) will hit $120 in the next 3 years. Macke likes Target for the long term, but he thinks Ackman is just talking his book with this lofty price target. Bed Bath & Beyond ( BBBY) fell 7% in after hours trading on lower-than-expected guidance. Macke says don't buy the dip on specialty retailers like BBBY ever. Intel ( INTC) traded 2% lower on Thursday as the Bank of America downgraded continues to weigh on the chipmaker's shares. Adami doesn't understand why Intel is trading lower and he feels that he is either missing something on Intel, or it's a screaming buy. He thinks Intel's next quarter is going to be great.