NEW YORK (TheStreet) -- The S&P 500 open higher on Thursday’s trading session, but closed lower by 0.56% while the 10-year Treasury yield dropped to a 13-month low.
Brian Kelly, founder of Brian Kelly Capital, said it will be hard for U.S. equities to rally until the situation between Ukraine and Russia gets sorted out.
Steve Grasso, director of institutional sales at Stuart Frankel, said that over the next two to three trading sessions, investors should have a good idea of whether the S&P 500 will maintain support near 1,910 and move higher, or break support and head down to the 200-day simple moving average, near 1,860.
Dan Nathan, co-founder and editor of riskreversal.com, pointed out that many German companies — such Adidas and Siemens — have been trading poorly. Perhaps U.S. multinational stocks are next, he reasoned.
Karen Finerman, president of Metropolitan Capital Advisors, said that over the longer term, U.S. equities should be fine and the geopolitical issues are just "noise." Eventually, it will pass, she added.
Ari Wald, head of technical analysis at Oppenheimer & Company, was a guest on the show. It’s too late for many investors to consider selling their equity positions, since the recent selloff happened so fast, he said. Long-term investors can consider buying stock though, as the Dow Jones Industrial Average has pulled back to its 200-day simple moving average.
The German equities index, the Dax, looks to be at support near 9,000 and seems likely to trade back up toward its 200-day simple moving average, Wald said. Also, the 10-year Treasury yield seems likely to break below 2.4% and “flush” out a lot of investors. Finally, the yield should move significantly higher following that flush.
Kelly disagreed that the Dax will move higher and he continues to hold his short position in the index. He is also long bonds, reasoning that the 10-year Treasury yield looks likely to break below 2.4%.
Grasso said that U.S. equities seem poised to rally in September or October, barring any significant geopolitical events.
Kelly said investors can stay long CBS Corp. (CBS) as long as the stock stays above $55.
Finerman said it’s good that Lululemon Athletica (LULU) founder, Chip Wilson, is reducing his stake in the company. He was too much a distraction, she added.
Kelly said Ctrip.com International (CTRP) and other Chinese Internet stocks seem poised to move higher.
Nathan said Netflix (NFLX) will probably make new all-time highs, which is roughly 5% away from current levels, but he is not a buyer of the stock.
Kelly said investors should be careful with ebola biotech plays, such as Tekmira Pharmaceuticals (TKMR).
Finerman is a buyer of Google (GOOGL) near current levels. Grasso is also long the stock, but said he is concerned that it is forming a “double-top,” which is a bearish technical pattern.
Nathan is a buyer of Nvidia (NVDA) near current levels.
Bre Pettis, co-founder and CEO of MakerBot, which was acquired by Stratasys (SSYS) in 2013, was a guest on the show. The MakerBot segment delivered 100% year-over-year revenue growth, something Pettis attributed to the company finally having all of its products out on the market. It’s revenues have become significant to Stratasys’ overall revenue figures, accounting for roughly 20%, he concluded.
Grasso said Stratasys has become a big commercial 3-D printing company, but is also making strides in consumer 3-D sprinting.
Kara Swisher, co-executive editor at Re/Code, was a guest on the show. In regards to valuations, she said that many technology stocks offer great products and solutions. However, investors sometimes tend to get a little ahead of themselves, pushing the valuations too high relative to what the company can actually generate in profits, citing Twitter (TWTR) as one such company.
Kelly said he is selling shares of Apple (AAPL) short, with at $101 stop-loss. He reasoned that the trade has an attractive risk-to-reward setup and that all of the good news seems priced into the stock.
Nathan added that Apple could hit $90 rather quickly if it breaks below its 50-day simple moving average.
Cumulus Media (CMLS) fell 8% and was the first stock on the show’s “Pops & Drops” segment. Finerman reasoned that earnings were disappointing and costs were “out of line.” She is going to re-evaluate her long position.
Agrium (AGU) fell 2%. Kelly said, “I would just stay away from this completely.”
Jack In The Box (JACK) popped 10%. Nathan said investors who are not long should not buy the stock and those that are long should use $55 as their stop-loss.
Mobileye (MBLY) fell 5%. Grasso is a buyer of the stock on a pullback.
Michael Pachter, managing director at Wedbush Securities, was a guest on the show. He has a buy rating on shares of Zynga (ZNGA) with a $7 price target. The company’s lowered guidance and ensuing selloff in the share price should mark a “low point” in the stock, he said. The company has delayed some of its mobile games, which didn’t help, but its user metrics are improving, especially in mobile. It might take a few a months, but the stock should rebound.
Grasso said Zynga seems like a good speculative play. Nathan agreed, saying investors could buy the stock near $2.
Kelly said, “there’s no way” he’s buying the stock.
Ben Kallo, senior research analyst at R.W. Baird, was a guest on the show discussing SolarCity (SCTY). The company reported strong earnings results. SolarCity remains a leader in the residential solar space and megawatt bookings were stronger than expected. He said the stock is likely to continue higher, but investors should maintain realistic expectations for the company.
Finerman is long SunEdison (SUNE), which also reported strong earnings. The industry is attractive, she added, despite the high valuation.
Nathan pointed out the bearish options activity in shares of Royal Caribbean Cruises (RCL). Specifically, there was a buyer of 7,500 September $55 put options.
For their final trades, Nathan is a buyer AT&T (T) and Kelly is buying the Market Vectors Gold Miners ETF (GDX). Grasso is a buyer of Magnum Hunter Resources (MHR) and Finerman is buying Allergan (AGN).
-- Written by Bret Kenwell in Petoskey, Mich.