'Fast Money' Recap: What's Next?

NEW YORK (TheStreet) -- The S&P 500 slid lower on Thursday over continued fears in emerging markets and amid the Federal Reserve's decision to taper an addition $1 billion from its asset purchasing plan. 

Guy Adami, managing director of stockmonster.com, said he would be "shocked" if the broader market declined on Thursday. It's important for the S&P 500 to stay above 1,765 for the bulls. 

Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said he doesn't expect the market to rally on Thursday. He added there have been interesting pockets of strength, including the Market Vectors Gold Miners ETF (GDX), the iShares 20+ Year Treasury Bond ETF (TLT) and the Materials Select Sector SPDR ETF (XLB). 

Dan Nathan, co-founder and editor of riskreversal.com, said last year's leading stocks have been selling off for weeks now, including Nike (NKE) and Starbucks (SBUX).  He added that the S&P 500 seems likely to trade down to 1,700, near the 200-day moving average. 

Steve Grasso, director of institutional sales at Stuart Frankel, said the S&P 500 keeps hitting on support at its 100-day moving average, making it more likely that it will eventually fail. He thinks the market will go lower. 

Google (GOOG) announced it will sell Motorola Mobility to Lenovo for $2.91 billion, pending regulatory approval. Adami said investors should stay long Google but reduce their long position before the close on Thursday. 

Nathan said Google is getting overvalued because it is up 35% since it reported earnings last quarter. He said investors should look to buy near $1,000. 

Grasso is a buyer of Google but suggested investors wait for an earnings-induced pullback. 

Facebook (FB) is higher after reporting earnings. Adami said the stock seems likely to trade to $60. 

Brown argued that Facebook is overvalued, saying it is currently worth more than Disney (DIS). He argued that FB will eventually trade on valuation but it could take years for it to play out.  

Robert Peck, managing director and Internet analyst at SunTrust Robinson Humphrey, was a guest on the show. He said Facebook ad revenue were up 76% year over year and margins increased to 56% and continue to accelerate. He added that half of the company's revenue are now on mobile, a huge improvement from last year. Ad pricing is also increasing as well. 

Brown said Qualcomm (QCOM) is likely to struggle after its multi-year breakout quickly failed to materialize.
Grasso disagreed, saying QCOM could move higher as long as it holds $70 as support. 

Adami said Qualcomm's full-year guidance was good, but its second-quarter guidance was a little light. He thinks the stock is "fine."

Yahoo! (YHOO) fell 9% after reporting earnings. Grasso said he still has a small position because of the company's Alibaba stake, but has taken most of his profits already.

Brown said the Alibaba trade in Yahoo! is over and suggested that investors buy Softbank because it has a larger stake in Alibaba than Yahoo! as well as stakes in other Chinese Internet plays. 

David Chao, DCM co-founder and general partner, said Chinese companies that plan to IPO in the U.S. are unlikely to be delayed. He reasoned that the four big auditing companies in China are simply subsidiaries of the ones from the U.S. He added that many large U.S. corporations use these firms when operating in Asia. He added that a compromise is likely. His top Chinese e-commerce plays were Alibaba and VipShop. 


U.S. Steel (X) was the first stock on the show's "Pops & Drops" segment. Adami said investors could stay long with a stop-loss at $24.50. 

Dow Chemical (DOW) was up 4% and Brown likes the company. He said the stock popped because the company announced it would spin off its petrochemicals unit and increase its share buyback. 

Alcoa (AA) jumped 1% and Grasso said he is staying long. 

T-Mobile U.S. (TMUS) dropped 4%. Nathan said there is chatter about regulators blocking a merger with Sprint (S), which could down the stock an additional 10%. 

Dave Barger, CEO of JetBlue Airways (JBLU), said the weather has caused some flights to be cancelled, which will weigh slightly on the company's upcoming earnings. However, he's optimistic on the company's revenue prospects in both the short term and long term. The company's new in-flight service, Fly-Fi, is superior to that of GoGo's (GOGO), he said. He added that it's being installed in his company's airplanes as well as those of United Airlines (UAL). 

Grasso called the in-flight service a game-changer and said it was a reason alone to buy the stock.

Adami continues to favor JBLU, saying the industry should continue to do well. The company has limited downside and huge upside. Brown said analysts still haven't moved their estimates high enough for JBLU, which is expected to grow earnings around 20% to 25% for the next five years.

Nathan said Yum! Brands (YUM) could move higher on just slightly better-than-expected earnings results. He pointed out bullish activity in the February $70 call options.

Brown said Priceline.com (PCLN) has support in the low-$1,000 price range but he is not a buyer heading into earnings. 

Adami likes KKR (KKR) and Blackstone (BX). 

Grasso said he is not a buyer of LinkedIn (LNKD) after its recent selloff. 

Nathan said Apple (AAPL) seems to be trading at the right price now, given its earnings report and guidance.  

For their final trades, Grasso is buying Bank of America (BAC) and Brown said to buy DOW. Nathan is taking profits in GOOG and Adami said to buy TLT.

-- Written by Bret Kenwell in Petoskey, Mich.

Follow TheStreet.com on Twitter and become a fan on Facebook.

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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