'Fast Money' Recap: Tapering? Big Deal

NEW YORK (TheStreet) -- The markets brushed off a soft nonfarm payrolls report, with the S&P 500 and Dow Jones Industrial Average hitting fresh record highs.

Guy Adami said on CNBC's "Fast Money" TV show that he never suspected the Federal Reserve to taper its bond-buying program in September. He continued to say that the markets don't give investors a lot of time to "sell the highs" and its refusal to go down on Friday is bullish.

Dan Nathan said the iShares 20+ Year Treasury Bond ETF ( TLT) got crushed the last couple of days and only had a small bounce, meaning equities could continue to run higher. He thinks there is a 50-50 chance of tapering in September, which will be dependent on the data.

Steve Grasso asked if the taper even mattered at this point. He said that interest rates continue to rise and that investors should therefore avoid the home builders and buy the financials.

Tim Seymour said the fall tapering date all depends on the data, which he expects to be better in August. He added that he would stay long the financials and that the market could actually rally when tapering is finally announced.

Berkshire Hathaway ( BRK.B) reported earnings and Adami said that while the stock has been strong this year, he would look to other financials such as Blackstone Group ( BX).

Grasso said the only group he would avoid is the homebuilders because they're so sensitive to interest rates. However, he did say that he would be a buyer of the home improvement stores, such as Home Depot ( HD).

Weight Watchers ( WTW) was the first stock on the show's "Pops & Drops" segment and Grasso said that he is avoiding the name because of declining revenue, lower guidance and a departing CEO.

J.C. Penney ( JCP) fell 13% on the week from news the company will have its credit slashed from one of its providers. Nathan said that he would avoid this stock.

Buffalo Wild Wings ( BWLD) popped 10% on the week from strong earnings and made new all-time highs, but Adami said he would be a seller by taking some profits because of valuation.

Seymour said he was a buyer of Potash ( POT), which was down 22% on the week and he noted that the stock is now flat from the pre-market lows of the original drop.

LinkedIn ( LNKD) was the first stock on the show's "Top Trades" segment and was up 10% on Friday. Adami said the stock was not a buy after earnings and thinks that investors should buy the pullback.

American International Group ( AIG) reported strong earnings. Seymour said it has a lot of value and upside but he is not a buyer.

Looking ahead to next week, Grasso said he was a buyer of Tesla ( TSLA) ahead of earnings on Wednesday.

Priceline.com ( PCLN) reports earnings on Thursday and Nathan said the options market is only implying a 6% move. He thinks we could get more than that. Therefore, he suggested to play via options.

On Tuesday Disney ( DIS) will report earnings and Seymour said the stock is a great company over the long term, but he thinks this quarter will not be very good.

Adami said Pandora ( P) might spike heading into earnings at the end of August because of the high short-interest, but there is a lot of resistance at $20.50.

For their final trades, Adami said to buy PulteGroup ( PHM), Seymour was buying Cliff Natural Resources ( CLF) and Grasso was a buyer of Telsa. Nathan was the lone seller, who said to short FedEx ( FDX).

-- Written by Bret Kenwell in Petoskey, Mich.

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Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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