'Fast Money' Recap: Looming Crisis

NEW YORK (TheStreet) -- The broader markets closed near session lows as worries increased over the ongoing budget deficit debate.

On CNBC's "Fast Money" TV show, Guy Adami said his favorite consumer plays remain MasterCard ( MA) and Visa ( V). He added traders could look to go long The Gap ( GPS) with a $40 stop.

Josh Brown said Wal-Mart ( WMT) refuted a report Wednesday that it is cutting orders; the report had sent the stock lower. He added traders should avoid J.C. Penney ( JCP) and that high-end retail still looks to be in good shape.

Dan Nathan disagreed on the high-end retailers, pointing out earnings misses from Coach ( COH) and Polo Ralph Lauren ( RL). He said consumers aren't buying Apple's ( AAPL) iPads, which shows their spending power is softening.

Mike Khouw said that while Wal-Mart does repurchase a lot of shares, the top-line growth has been unimpressive and U.S. consumers are not in great shape.

Amazon ( AMZN) is not focused on making profits on its tablets and instead is focusing on driving sales from the actual device, Nathan said -- a plan that may not work out in the end. He would not commit new money to the stock now because it is near all-time highs.

Jon Najarian said he doesn't like Amazon's price cut on its lower-priced tablet, which is not as good as many of its competitors. He called it a losing strategy that will hurt the company's profits even more. He called it a losing strategy.

Adami argued the stock has been in a strong uptrend and that he isn't going to fight it until that changes. He said the $300 level would be important.

Larry McDonald, senior director and U.S. equity and policy strategist at Newedge, was a guest on the show and said he expects equity markets to rally on Friday in anticipation that the budget deficit will be resolved on Monday.

Taking it one step further, he said nimble traders could look to fade the ensuing rally for the debt ceiling debacle on Oct. 15. From there, if there is a "grand bargain" between both political parties, he would consider that very bullish for stocks.

The airline industry was the featured group on the show's "Street Fight" segment. Najarian defended the sector, saying there are fewer seats available and more demand for those seats, driving prices higher. He added that airlines have figured out the fee system, which brings in billions of dollars per year. He concluded that the airlines' revenue are expected to jump 67% year over year.

Nathan disagreed, arguing this is one of the worst industries that has ever existed. He added that it's built to fail and the airlines don't have any differentiation in their products to create customer loyalty. Finally, he concluded the stocks do not have any attractive entry points.

Najarian said Immersion Corp. ( IMMR) should continue to do well over the long term. Brown added that hedge funds have been buying large chunks of the stock on dips.

Yahoo! ( YHOO) was the first stock on the show's "Trending Trades" because of the potential for the Alibaba IPO to be listed in the U.S. Nathan said investors should look to get out when hedge fund manager Dan Loeb gets out.

FAB Universal ( FU) is up huge in September. Brown said very nimble traders can watch this one for a momentum play higher.

DryShips ( DRYS) was the first stock on the show's "Pops & Drops" segment. Brown said the trends for these companies usually last for a while.

Carnival ( CCL) fell 5% and Khouw said that higher fuel costs and lower bookings were hurting the company. He added that he's not a fan of the stock.

BlackBerry ( BBRY) fell 6%. Nathan said eventually the stock will be gone and no one sees any value in it.

Deutsche Bank ( DB) dropped 2% and Adami said he doesn't see any reason to go out and buy the stock. He added it'll likely drift lower over the next week.

Bed Bath & Beyond ( BBBY) jumped higher following its earnings report. Adami said traders will likely have to chase the stock, although he admitted he hates to say that because he doesn't usually like to chase.

Brown disagreed, saying he wouldn't chase it and thinks the stock could be putting in a top.

Brown likes Hain Celestial Group ( HAIN) at these levels, with the stock near solid support.

Adami said Google ( GOOG) should hold $850 and likes the stock heading into earnings.

Choosing among American Axle & Manufacturing Holdings ( AXL), Goodyear Tire & Rubber ( GT) and Ford ( F), Nathan said he prefers to own Ford for its dividend yield and future growth.

Mike Khouw said he would rather own Priceline.com ( PCLN) over Ctrip.com International ( CTRP) because Priceline has a more reasonable vaulation.

For their final trades, Khouw suggested traders take a look at the bearish options activity in J.C. Penney. Nathan was taking profits in Zynga ( ZNGA). Adami was a buyer of Boston Beer ( SAM), Brown was taking profits in bank stocks and Najarian said to buy Thoratec ( THOR).

-- 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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