Brian Kelly, founder of Brian Kelly Capital, pointed out that the bond market sold off on Tuesday morning despite the positive economic news. However, geopolitical issues continue to weigh on stocks, which is why he sold-short German equities.
Guy Adami, managing director of stockmonster.com, said geopolitical issues haven't helped the stock market but neither have the transport sector or small-cap indices. He said the S&P 500 could decline to 1,860.
Dan Nathan, co-founder and editor of riskreversal.com, argued that small-cap stocks actually held up relatively well on Tuesday compared to the broader market. However, it's concerning that the financial sector has not participated in the rally.
Karen Finerman, president of Metropolitan Capital Advisors, said markets seem poised to rally once the "noise" of the Ukraine-Russia situation is in the past.
The energy sector declined 2%. Adami and Finerman said Eaton (ETN) is beginning to look attractive on a valuation basis, but could decline further before becoming a buy.
Kelly said a lot of good news is already priced into shares of Intel (INTC) and he is not a buyer at current levels.
Nathan agreed with Kelly, adding the company has a great balance sheet and solid dividend yield but the stock has moved too much to the upside. Adami added that when margins peak at Intel, typically the stock price does, too. That may be the case today.
Sucharita Mulpuru, vice president and principal analyst at Forrester Research, discussed the brutal selloff in shares of Groupon (GRPN) in the after-hours session.
She said the company's move into fashion items and its acquisition of Ideeli have been a drag on the overall business. She added that Groupon's "goods" business is also very capital-intensive but has promise over the longer term.
Kelly said Groupon's recent business ventures aren't relative to the core strategy and cost a lot of money. Management is also failing to execute, he added, before saying he is not a buyer of the stock. Adami said the earnings report wasn't great but a 16% selloff seems overdone.
Disney (DIS) reported strong top- and bottom-line earnings results.
Finerman said investors had already priced in a good earnings report, which is why the stock isn't moving too much. Management continues to do a great job but the stock appears a little expensive compared to its historical valuation.
Adami said Disney "might be the best-run company in the U.S." He added the stock trades with a high valuation but the company continues to "grow into" that valuation over time.
Kelly bought shares of BlackBerry (BBRY), reasoning the CEO continues to execute the turnaround plan. He added that the stock should have a good second half of 2014 and could get over $12.
Nathan disagreed, saying the stock is not a buy at current levels. Adami suggested BlackBerry looks good on the long side, with the downside being limited to $9 and having upside potential to $10.50 or $11.
Nathan said shares of Whole Foods Market (WFM) have been crushed since its growth has slowed. However, the call option buying activity is very short-dated and doesn't seem to fit the normal pattern of an activist investor getting long the stock via options. It's likely only traders playing the rumor that hedge fund manager Carl Icahn may get involved in the stock.
Finerman added that WFM may be a good pick for an activist investor but the stock is not cheap enough at current levels for most of them.
Bob Carter, senior vice president of automotive operations for Toyota Motors (TM), was a guest on the show. If you want a "snapshot of consumer optimism," just look at the auto market, he said. Auto sales have grown to a seasonally adjusted annual rate (SAAR) of 16.5 million while also posting six straight months of year-over-year growth. The company's hydrogen fuel car is scheduled to debut in 2015.
Kelly said Toyota Motors should continue to benefit from the yen, but its hydrogen fuel cell car is unlikely to be the "Tesla killer." Adami said he would rather be a seller than a buyer of Toyota as it approaches a huge double-top, which a bearish technical pattern.
James Stewart, a columnist at The New York Times, was surprised by Twenty-First Century Fox's (FOXA) decision to withdraw its bid for Time Warner (TWX). Typically, FOXA management has a history of paying a premium for the companies it wants but appears to be acting conservatively at the moment. This "no-deal" seems good for consumers, Steward concluded.
Adami said Time Warner is a buy near current levels, but it might decline to $72.
Chris Garabedian, CEO of Sarepta Therapeutics (SRPT), said his company has a potential treatment available for the Ebola breakout, if the government were to ask for it. The company has lost some key management figures but Garabedian said the current management remains strong and focused. The company plans to move forward with key studies in regards to its muscular dystrophy treatments.
Adami said investors shouldn't buy Sarepta Therapeutics based its potential Ebola treatment. However, they can buy the stock based on nearby support at $20. Any good news could shoot the stock higher, he added.
Rick Heitzmann, managing director at FirstMark Capital, was a guest on the show. Regarding bitcoin, he said the market is still relatively small. However, the price has held up okay given all the bad news and outlawing by China and Russia. It's also likely to remain volatile, he said -- as in, bitcoin seems likely to dip below $500 but climb over $1,000 or perhaps $2,000 all in the next 12 months.
Dan Nathan pointed out the bearish options activity in the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). Specifically, a trader rolled out of 15,000 August $79 put options and into 15,000 September $72 put options. The position looks like it's being used for protection, he reasoned.
For their final trades, Nathan is a seller of the PowerShares QQQ Trust ETF (QQQ) and Kelly is a buyer of the iShares 20+ Year Treasury Bond ETF (TLT). Adami is a buyer of BlackBerry and Finerman is a seller of the SPDR S&P 500 ETF (SPY) put options.
-- Written by Bret Kenwell in Petoskey, Mich.