Recession fears have put the S&P 500 on track for the worst start to January in history. The Dow closed down 59 points and the NASDAQ lost 6 points. The team at CNBC's "Fast Money" try to help investors understand the movements in the market and Brian Schaeffer visits the show to give insight into Apple.Karen Finerman mentioned she bought back a lot of short positions Friday on names like Lehman Brothers Holdings ( LEH) and Simon Properties ( SPG). Pete Najarian advised investors and traders to take profits on short positions that have worked. He disclosed that he took 50% of his put options trades off the table, but he does still see problems ahead for the market. Guy Adami explained how some of the defensive names were sold off Friday and that leads him to believe we are closer to the end of the selling than we were a few days ago.
Apple Earnings PreviewApple ( AAPL) is set to report earnings on Tuesday. Brian Schaeffer, Managing Director at VDM Capital joined the "Fast Money" crew to discuss his take on Apple. Schaeffer explained that he is very concerned about the fundamentals going forward for Apple. He sees increased competition for the iPhone and the iPod and he thinks margins will shrink. Schaeffer questioned why the iPhone is half the price it was a month ago? He predicts Apple will issue a tepid forecast when earnings are reported. Schaeffer also doesn't like the look of Apple from a technical perspective. If the stock breaks $160, it will head to $125. Najarian disagreed and he offered that the iPhone and iPod are just a catch to get people into the Apple stores to buy the Mac. He expects Apple to see huge demand as they move into Japan and China and he feels they will blow numbers away on Tuesday. Apple ( AAPL) fell 7% this week after Steve Jobs failed to spur excitement at Macworld. Najarian speculated that Apple could announce a 2-for-1 stock split when earnings are reported. Macke thinks Apple will report a great quarter, but he is concerned about the stock. He thinks a better tech play is Microsoft ( MSFT) and he would look to buy it around $32. Adami agreed with Macke on MSFT.
Subprime Saga ContinuesSubprime worries continue to weigh on financial stocks. Citigroup ( C) traded to its lowest level since 1998 and Goldman Sachs Group ( GS) lost 6% on the week. Adami thinks Goldman Sachs is cheap and will beat earnings. (Here's another approach to the subprime saga on Stockpickr.com Shorts and Longs in the Subprime Sector.) Finerman thinks the worst is over for Merrill Lynch ( MER) and the stock is getting attractive. Najarian says if you want to play the financials buy U.S. Bancorp ( USB). Macke explained unless you like self-abuse don't touch the financials.
Commodities WiltingEnergy, metals and agriculture stocks were hammered this week as investors fear the commodity bull run might be over. Adami thinks it's time to get out of Newmont ( NEM) if you own it. Finerman disclosed that she is long natural gas and refiners. Macke predicts the commodity stocks have a lot more room to fall. Najarian says the Energy Select Sector SPDR ( XLE) and Materials SPDW ( XLB) are going lower because he sees too much put option activity in both ETFs. Pharma Sick Big pharmaceuticals names like Merck ( MRK) and Schering-Plough ( SGP) were hit hard this week after two studies questioned the effectiveness of cholesterol and antidepressant drugs. Najarian urged investors to take profits in the drug names. Adami likes Humana ( HUM) here. Worst Company On Earth The "Fast Money" traders each offered up their nomination for the worst company on earth. Macke retired Circuit City ( CC) and filled the vacancy with Moody's ( MCO). Najarian thinks both Sprint Nextel ( S) and Motorola ( MOT) qualify. Finerman's pick was Solarfun Power Holdings ( SOLF) for its lack of disclosure and questionable management. Adami picked Advanced Micro Devices ( AMD).