'Fast Money' Recap: Shaken by the Fed

NEW YORK (TheStreet) -- The S&P 500 closed lower by 0.60%, but above session lows after the Federal Reserve came across as a bit more hawkish than the market anticipated. 

On CNBC's "Fast Money" TV show, the trading panel was discussing the Fed's decision to possibly end its quantitative easing program by fall of 2014 and begin raising fed funds rate roughly six months later. 

Tim Seymour, managing partner of Triogem Asset Management, said the Fed seems to be confusing investors and also seems to be "going with the flow." He added the Fed's comments bode well for industrial and cyclical stocks, specifically FedEx (FDX), Cummins (CMI) and Ryder System (R). 

Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said Wednesday's comments from the Fed weren't necessarily bad but did catch investors off-guard. 

Dan Nathan, co-founder and editor of riskreversal.com, pointed out how quickly bonds and utilities sold off on Wednesday. He said the iShares MSCI Emerging Markets ETF (EEM) will likely make new lows within the month. 

Guy Adami, managing director of stockmonster.com, pointed out how well financial stocks performed on today's news of higher interest rates. Specifically, he was a buyer of Citigroup (C).

Paul Hickey, co-founder of Bespoke Investment Group, said in each of the past 10 years Netflix (NFLX) and Dollar Tree (DLTR) have been positive for the last two weeks of March. GameStop (GME) and Tenet Healthcare (THC) have also performed well during this time period. 

Of the stocks named by Hickey, Brown said Dollar Tree looks the best mainly due to its low valuation. 

Guess? (GES) sold off in the after-hours, following its fourth-quarter earnings results. Adami said the stock looks likely to break $27 and decline to $25. 

Collin Gillis, an analyst at BGC Financial, has a hold rating on Apple (AAPL) with a $550 price target. Regarding smartphones, he said the price gap continues to widen while the functionality gap between the phones continues to narrow. He said Apple should put more focus into services and wearable devices. It is no longer considered a growth stock, he concluded. 

Seymour said Apple continues to protect its margins by not reducing the price of its iPhones. He added that the company is not "broken" and still has a favorable valuation. Brown agreed. 

Nu Skin Enterprises (NUS) fell 6% and was the first stock on the show's "Pops & Drops" segment. Nathan said to "avoid this one at all costs." 

Hewlett-Packard (HPQ) jumped 3.5%. Adami said to stay long. 

Orbitz Worldwide (OWW) dropped 9%. Brown said the fall isn't surprising after the stock's huge run in 2013 and increased competition from its peers. 

Freeport-McMoRan (FCX) was down 2%. Seymour said the stock is "interesting" at current levels but admitted there are no existing catalysts to get him to buy the stock at this time. 

First Solar (FSLR) soared over 20% on Wednesday. Brown said he would stay long the stock after the company provided better-than-expected guidance for fiscal 2014, 2015 and 2016. He added the stock is now cheap based on these growth projections.

Shares of Twitter (TWTR) are down 19%, year to date. Nathan said $50 has proved to be a very important level in the stock. He reminded investors the company reports earnings soon and on May 6, 475 million shares are going to become available in public markets.

Adami said the price action for Twitter has not been good and he expects the stock to fall to the high-$40s. 

Barry Schneider, president, chairman and CEO of Loyal3, was a guest on the show. His company attempts to make IPOs available for small retail investors. He said that 98% of his clients hold the stock through day 1 of a company's IPO, and 90% are still holding by day 30. He reasoned that every investor should have access to IPOs and not just the institutions and big investors. 

Toyota Motors (TM) will pay $1.2 billion to settle the unintended acceleration recalls, which resulted in 10 million vehicles being recalled and five deaths. Investors are wondering if General Motors (GM) will suffer a similar fate. 

Nathan said the recall news will eventually "blow over" and reasoned that it's not a reason to not invest in shares of GM. 

Brown suggested that China should stop trying to sustain an 8% GDP growth rate. Instead, it should reset the bar to about 6% GDP growth, stop inflating the credit bubble and focus on growing consumerism. 

In an earlier interview on CNBC, Starbucks' (SBUX) CEO Howard Schultz said that rising coffee prices account for less than 20% of the company's costs of good. He added that rising dairy costs are a bigger risk, but reiterated that Starbucks will maintain its guidance and earnings per share estimates. 

Seymour said Starbucks' coffee costs are hedged through the first quarter of 2015 and advised investors not to sell the stock. 

Nathan said he would be "cautious" of Starbucks at $80 but added that $70 proved to be a good level to buy at. 

Greek yogurt now represents 50% of U.S. yogurt sales. Mariano Lozano, president and CEO of The Dannon Company, said America is thought of as an "emerging market" for yogurt sales since, on average, Americans only have one yogurt per week. In other parts of the world, people average one yogurt per day. He added that rising dairy prices coincide with rising demand, which bodes well for yogurt and dairy companies.

For their final trades, Adami is a buyer of Tenet Healthcare, Nathan is short the EEM via a long position in put options and Seymour said to buy the iShares MSCI Brazil Capped ETF (EWZ), which has formed a "double bottom," a bullish technical pattern.

-- Written by Bret Kenwell in Petoskey, Mich. 

Follow @BretKenwell


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Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter.

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