3 Stocks I Saw on TV
NEW YORK ( TheStreet) -- The markets ended up higher on Thursday on some encouraging reports on bond auctions in Spain and Italy. The Dow Jones Industrial Average rose 21.57, or 0.17%, to 12,471.02. The S&P 500 added 3.02, or 0.23%, to 1295.50. And the Nasdaq was up 13.94, or 0.51%, to 2724.70. Guy Adami said on CNBC's "Fast Money" TV show that JPMorgan's ( JPM) earnings will be an important tell on whether the surprisingly strong financial rally is about to pause. For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
Adami said he would be looking at JPMorgan's return on assets and net chargeoff rates for credit card debt. He said he would probably take profits in the stock and return to buy it back at a later time. Keith McCullough said JPMorgan is in position where its number has to be good and where it has to overdeliver on heightened expectations. He said it is in a difficult situation where shorts are fearful of getting squeezed and the longs are hopeful of getting paid. He said it's not a situation where he would want to be long. Joe Terranova reiterated the importance of using options in the financials trade. He said investors will be looking to see how JPMorgan is going to control costs. Moshe Orenbuch, a Credit Suisse analyst, said he would be looking for JPMorgan's comments on capital markets activity and its willingness and ability to return capital. He said the surprisingly strong rallies in Bank of America ( BAC) and Citigroup ( C) will depend on the health of the consumer and their ability to return capital to shareholders. Orenbuch said JPMorgan's earnings should be closer to expectations than its peers. He said it wasn't able to do much in dividends and a buyback because it used up its earnings too quickly. Melissa Lee, the moderator of the show, noted that Diamond Foods ( DMND), was falling in after-hours trading on reports of investigations by the Department of Justice and SEC of its walnut grower payments.
CNBC senior stocks commentator Herb Greenberg said the issue is whether the company inflated its results as a result of the way it handled the accounting for the "momentum" payments to the growers. He said what's at stake is the impact of these investigations on its acquisition of Pringle from Procter & Gamble ( PG). He said several big investors in Diamond have already dumped their shares in the stock, which recently has been "jerked every which way." Lee brought in Rich Ilczyszyn, of Intrader.com, to comment on the volatile day in oil after reports of a 6-month EU delay in the ban of imported oil from Iran. The trader said the Iranian risk premium could be as much as $20 and compared today's report to moving "Niagara Falls through a garden hose." He said he's looking for oil to drop to $92.77 a barrel, where he sees a double bottom. He also said investors are piling in on the short side of the trade. As for gold, he said the catalyst for the metal could a euro capitulation and dollar selloff. Commenting on the deflated price of natural gas, Adami said there are opportunities in the chemical space, specifically Georgia Gulf ( GGC). McCullough said any rally in Cabot Oil & Gas ( COG), which was down 3.5% today, should be shorted. Shifting to a discussion on the prospects of the controversial Keystone pipeline, Transcanada president and CEO Russ Girling said the $7 billion project will create 8,500 jobs along pipeline spreads, 3,000 jobs at pump stations, 600 jobs for construction camps and tank construction, 1,000 jobs in construction, management and inspection. He said it will be the safest pipeline built in the U.S., adding the company is talking with the federal government about an alternative route through Nebraska. He said the Canadian oil sands will shift to other markets, including Asia, if the U.S. pipeline project is not approved. Lee brought in Mike Ryan, chief investment strategist for UBS wealth management, who said that the next decade will see investors more selective about equities as they look for income-oriented stocks that pay and grow dividends over time.
As for investing tips for the rest of the year, McCullough said he liked consumer discretionary stocks because of the strong dollar. He also looks for gold to back off hard. Terranova said investors shouldn't abandon the dividend paying strategy and to stick with debt-owning instruments like the TM Corporate Bond Fund ( LQD) and financias like JPMorgan and Wells Fargo ( WFC). In the final trades, Khouw favored using short-term calls on JPMorgan. Najarian liked Chico's ( CHS). Adami liked GlaxoSmithKline ( GSK). McCullough favored shorting Bed Bath & Beyond ( BBBY), and Terranoval said to buy Carnival Cruise Lines ( CCL). -- Written by David Tong in San Francisco. >To contact the writer of this article, click here: David Tong. To submit a news tip, send an email to: email@example.com. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. Follow TheStreet.com on Twitter and become a fan on Facebook.