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 Trade

Joe 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.)


Gold 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.

Macke disagrees with Seymour and instead he would sell the mining stocks and buy the Gold ETF ( GLD). Najarian mentioned that the options players are selling calls on the mining names like Newmont Mining ( NEM), Gold Fields and Goldcorp ( GG). Adami maintains that if you want to participate in the mining space buy Freeport-McMoRan ( FCX).

Ag Stocks Bloom

Agriculture 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 Preview

The 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 Street

Gaming 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.

Online Advertising Trade

With the Iowa Caucus set for tonight politicians continue to spend money online to raise awareness for their campaigns. JP Morgan is predicting that online spending could reach $10 billion in 2009. Najarian thinks Google ( GOOG) will benefit from this trend, but his best idea is Yahoo ( YHOO). Adami prefers Digital River ( DRIV). Macke doesn't agree with Najarian on Yahoo. He feels Yahoo can't get out of their own way.


As the BRIC (Brazil, Russia, India and China) markets continue to grow investors will see more IPO's from these emerging markets. Seymour thinks the way to play this trend is with the underwriters like UBS ( UBS), Morgan Stanley ( MS), Goldman Sachs Group ( GS) and Credit Suisse Group ( CS) which are the top BRIC underwriters.

Seymour also likes China Mobile ( CHL) and CNOOC ( CEO) for plays on moving off the Hong Kong exchange to the Shanghai. Adami also favors China Mobile. Najarian says play the exchanges like Nasdaq Stock Market ( NDAQ) and NYSE Euronext ( NYX) because they will benefit from increased trading volumes from ADR transactions. He also likes UBS and he disclosed he owns all three of the above mentioned stocks. Macke agrees with Najarian on the exchanges.

Pops & Drops

Pops - SINA Corp ( SINA) traded up 8% after Piper Jaffray raised its rating on the Chinese internet portal from neutral to buy. Seymour likes SINA.

Superior Energy Services ( SPN) traded up 19% after signing a $750 million contract to dismantle downed platforms in the Gulf of Mexico. Adami agrees with Jim Cramer that SPN is a valuation trap. He would take profits off this pop.

Raytheon ( RTN) traded up 3% after the defense company won two U.S. Army contracts worth $18 million. Adami loves the defense stocks into 2008.

Sasol ( SSL) traded up 3% on no news. Seymour explained that as oil goes above $100 coal, it is comparatively cheap and that is bullish for SSL.

Drops - Rite-Aid ( RAD), Walgreen's ( WAG) and CVS ( CVS) fell more than 6% each after all three reported December sales that missed Wall Street estimates. Macke isn't a fan of these stocks.

YRC Worldwide ( YRCW) fell 11% after the company reported that it will take up to $800 million in fourth-quarter acquisition charges. Najarian asks why own this stock?

Panera Bread ( PNRA) fell 10% after the company reported a 1.2% decline in fourth-quarter same-stores sales. Najarian would look to buy it in the $30's.

NetSuite ( N) fell 8%. Macke is still bullish and suggests buying the stock when it dips.

Shutterfly ( SFLY) fell 16% on no news. Najarian would say away from SFLY.

Family Dollar ( FDO) and 99 Cents Only Store ( NDN) fell more than 6%. Macke cautions investors not to own these stocks - retail is too hard right now.


Viewers send in the questions that they'd like the panel to answer.

John writes, "Guy, are you still bullish on MasterCard ( MA) even with recession talk and a spending slowdown by consumers? It looks like it's ready to turn over on the charts." Adami expressed that he is still bullish on MA because people are spending money with plastic and moving away from using cash.

Bob wants to know,"What's going on with McDonald's ( MCD). It seems like we are having a McMess lately?" Macke thinks McDonald's is just fine as long as Starbucks ( SBUX) exists.

Nadim asks, "Seymour, I know you love and follow Russia. But which picks do you think would be very nice for 2008?" Seymour's best ideas for Russia are CTC Media ( CTCM), Market Vectors Russia ( RSX) and Gazprom ( OGZPY).

Final Trade

The team shares the trades they think have the most potential for profit.
  • Macke favors Cypress Semiconductor (CY).
  • Adami for the second day in a row picks Intel (INTC).
  • Seymour recommends Tata Motors (TTM) because the company is buying Land Rover and Jaguar from Ford.
  • Najarian advises shorting Valero (VLO) for a short term trade.
Stockpickr is a wholly owned subsidiary of TheStreet.com.

If you liked this article you might like

George Soros' Top 10 Dividend Stock Picks for 2015

George Soros' Top 10 Dividend Stock Picks for 2015

Top 10 New Stocks to Trade Like Hedge Fund Renaissance Technologies

Top 10 New Stocks to Trade Like Hedge Fund Renaissance Technologies

4 Warren Buffett Dividend Stocks Jim Cramer Also Owns

4 Warren Buffett Dividend Stocks Jim Cramer Also Owns

6 Health Care Stocks John Paulson Is Betting On for 2015

6 Health Care Stocks John Paulson Is Betting On for 2015

11 Stocks Warren Buffett Loves for 2015: IBM, Wal-Mart and More

11 Stocks Warren Buffett Loves for 2015: IBM, Wal-Mart and More