'Fast Money' Recap: Second-Quarter Playbook

NEW YORK ( TheStreet) -- The markets were flat Thursday ahead of Friday's jobs report.

The Dow Jones Industrial Average fell 30.88, or 0.25%, to 12,319.73. The S&P 500 lost 2.43, or 0.18%, to 1,325.83. The Nasdaq added 4.28, or 0.15%, to 2,781.07.

Brian Kelly said on CNBC's "Fast Money" show that he didn't think much of comments from Narayana Kocherlakota, president of the Federal Reserve Bank in Minneapolis, about higher interest rates later this year.

Kelly said he didn't that scenario wouldn't have a huge impact on the market.

Tim Seymour stressed the importance of Friday's jobs report. He said he doubts the Fed will raise interest rates until there is a "seismic" shift in the labor market. For the time being, he sees Fed Chairman Bernanke leaving interest rates near zero for the foreseeable future.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Joe Terranova argued the normalization of rates is a good thing for the markets, which he sees going higher.

Zachary Karabell noted that the Fed raised interest rates 17 times between 2004 to 2008 and that such steps were consistent with a rising market. He said higher interest rates may come in 2012 or late 2011.

For second quarter outlook, the panel looked at the winning plays in the first quarter. Terranova said investors should stay in the energy space, where he is overweighted. He said April historically is a good month for energy in the past several years with the exception of a blimp in 2010. He said he would stick with integrated names like Exxon Mobil ( XOM) that have proven reserves and Canadian energy names.

Seymour said he liked the current price level for oil. He sees the oil supply disruptions in Europe helping out Gazprom, adding Petrobras ( PBR) will do fine with oil at $115.

Kelly said he sees oil moving to $125 if the economic recovery picks up and there is peace in Middle East.

The grains trade worked in the first quarter, and Kelly said grain prices should continue to go higher in the second. He said with low levels of crop inventories, Monsanto ( MON) and PowerShares DB Agriculture Fund ( DBA) were good picks.

Seymour said he liked stocks with exposure to companies that are involved in improving productivity like Syngenta ( SYT), Bunge ( BG) and Archer-Daniels Midland ( ADM).

There was a difference of opinion on whether the financials would make a run in the second quarter. Kelly said financials will head lower if oil prices rise.

But Seymour said the financials are starting to make money and come back from a "death scare." Finerman agreed, saying the current valuation of financials prices in a lot of bad things. She said the banks' earnings power will grow once the economy improves and they start increasing their loan books.

Silver was a popular trade in the first quarter, up 22%. Peter Schiff, head of Euro Pacific Capital, said silver works because it's a play on its value as a precious metal and industrial metal. He also said it will continue to rise as long central banks around the globe continue to print money.

Seymour, though, said he would rather own gold, downplaying silver as a big momentum trade.

The losers in the first quarter included Cisco ( CSCO), Best Buy ( BBY), Target ( TGT) and Akamai ( AKAM).

Are any worth picking up in the second quarter? Kelly said he would pick up Akamai, which was down 19% in the first quarter, because its business is at least Internet- and online-related. Finerman said she liked Target, which was down 17%, while Seymour said Cisco was worthwhile based on valuation and its dividend.

A day before Friday's jobs report, Alan Krueger, a former assistant Treasury secretary and now an economic professor at Princeton, said the job market is healing slowly, with not enough job growth to make up for the job deficit. Karabell agreed, saying the country is in for a long period of structural unemployment.

Looking at the charts, Christopher Verrone, of Strategas Research Partners, said the bull trend is intact for the second quarter, with the risk to the upside. He favored owned cyclical stocks in transport and railroad names and set a target of 1,450 for the S&P.

He also liked Petrobras ( PBR), which, he said, has gone through a bearish-to-bullish reversal and provides a positive comment on the emerging market complex.

Shifting to the trading the globe segment, Seymour said the emerging market trade, which played catch-up late in the first quarter, looks good in the second. He said he would be in stocks like Market Vectors: Russia ( RSX) and iShares MSCI Brazil ( EWZ).

Looking at the "fine print" of the eBay's ( EBAY) deal for GSI Commerce ( GSIC), Finerman said the deal didn't pass the smell test for her because it excluded a number of assets worth $500 million.

She said the GSI Commerce's CEO was allowed to buy those assets, putting up only $31 million in equity and eBay lending the rest. She sharply criticized GSI Commerce's board for not doing a better job of shopping around those assets.

The chart of day was on Apple ( AAPL), which appears to be topping out as the stock has been rebounding off lower highs. Kelly said he thinks highly of the company, adding the stock looks interesting at $340.

Terranova said he was long Apple puts, adding the June quarter will show how supply challenges affected the company. Seymour said Apple is not broken but clearly has a high bar to clear.

In the final trades, Terranova said he had puts on IntercontinentalExchange ( ICE) and CME Group ( CME). Finerman liked JPMorgan ( JPM) trade. Kelly liked PowerShares DB Agriculture Fund. And Seymour liked General Motors ( GM), saying it was cheap at 5.5 times earnings.

--Written by David Tong in San Francisco.

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