The markets finished flat Monday after a volatile trading session. The Dow Jones Industrial Average added 1.36%, or 0.02%, to 8,764.49, while the S&P 500 was down 0.95, or 0.10%, to 939.14. The Nasdaq was off 7.02, or 0.38%, to 1,842.40.
The business story that garned most of the attention of the trading panel on CNBC's "Fast Money" TV show was Apple ( AAPL - Get Report), which generated a lot of buzz off its developers conference today. Jim Goldman, who was at the conference, said the stock reversed much of its red ink for the day after it came out with a flurry of announcements, including a new iPhone 3GS model that will retail for $199 for the 16G model and $299 for the 32G model. He said the big news of the day was the lowering of the price of the existing iPhone to $99. He said the company also announced refreshments to its laptop line and provided details on its Leopard operating system that comes out in Sepetember. Pete Najarian called Apple's upside "incredible," adding the $99 move will increase demand by 100%. Guy Adami said the trade on Palm ( PALM) is over after the weekend announcement of its Pre smartphone. He said he doesn't know where the trade goes from here. Najarian said Palm has a phenomenal phone but doesn't have enough to distribute. He said it still has a long way to go to compete against Apple's iPhone, and he considers Research In Motion ( RIMM) the preeminent name in the space because of its business email.
Adami said Apple is a stock that hedge funds, traders and investors want to own as the market turns over. Melissa Lee, the moderator of the show, said her own little study of the impact of the developers conference shows that Apple usually declined 8% a week after the show. Lee brought in Mike Abramsky, managing director of RBC Capital Markets, who was at the developers conference and believes there is $20 more to the upside for Apple. He said the upside will driven by the long-term opportunities for the iPhone platform. He also estimates that Apple will sell 18 million iPhones in fiscal 2009 and 28 million in fiscal 2010, which is just 2 to 3% of the global market of 1 billion handsets. He told Najarian the iPhone price cut will sustain momentum as Apple passes on its production efficiencies to consumers. He also said there is room for Apple, Research In Motion and Palm to gain market share because of the huge size of the handset market. Adami reiterated his belief that Apple is a little overextended. He sees it heading to the low $130's before it goes higher. Oil was flat today as the rest of the commodities fell. Joe Terranova said oil is basically a dollar story as he predicted oil will zoom up to $70 again if the dollar declines. Adami said Schlumberger ( SLB - Get Report) is a bit rich after a monster run this year (up 35.74% year to date). He said Schlumberger will head down if crude declines.
Lee referred to a chart that showed natural gas will outperform oil if the ratio of the two goes above 18. Najarian said the best way to get exposure to both is BP ( BP - Get Report) which continues to outperform names such as Chevron ( CVX) and Exxon Mobil ( XOM). He also liked the solar plays, including Renesola ( SOL - Get Report), which he says has received an unusually high amount of options activity in the last two trading days. Terranova said his favorite in this space, though expensive, is First Solar ( FSLR - Get Report). Lee brought on Rebecca Patterson, JPMorgan's head of global exchange and commodities, to comment on the dollar rally. She said the rally is being driven by overextended short dollar positions, better-than-expected non-farm payroll numbers Friday and bad news from Europe, including a downgrade of Ireland. She said she is a seller of dollar on shorts against commodity currencies and emerging Asian currencies. She told Finerman that she doesn't believe the Fed will raise rates this year. And she said she prefers the Australian dollar against the euro any day, adding "European fundamentals stink." She liked the Australian dollar because of the country's ties to China, the strength of its economy and decent interest rates. Lee invited Gregory Boye, CEO of Peabody Energy ( BTU) to comment on a Wall Street Journal story that questioned the amount of coal reserves in the U.S. that can be profitably extracted. Boye said even the article's contention that only about 120 years worth of coal reserves is recoverable is still cause for celebration. "It's going to power our economy for next 100 years," he said.
He said the real test will be the application of technology, cost structure and future prices to get the coal out of the ground. Lee shifted the discussion into some light-hearted fare on companies that are doing well in helping people to "hide fat" in tough economic times. Finerman mentioned some companies she liked, including Maidenform Brands ( MFB), up 32.71% year to date, and Warnaco Group ( WRC), up 78.45% year to date. In jest, Terranova said an alternative play would be Harley-Davidson ( HOG), saying a fat person with a Harley at least would look good at the beach. The topic of girdles touched a nerve with Adami who said to much laughter from the rest of the panel: "Come on folks! Go to the frigging gym and do some push-ups and sit-ups. Jack Lalanne doesn't have no girdle, and he's 99 years old." In the final trades, Terranova recommended covering the British pound if you're short. He thinks the dollar is going to roll over. Adami was for McDonald's ( MCD), while Finerman liked Kraft ( KFT). Najarian liked Isis Pharma ( ISIS). "Check out
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