'Fast Money' Recap: Buy Bank Stocks if They Fall on Senate Commodities Report

NEW YORK (TheStreet) -- The U.S. Senate's committee on investigations said in a report that banks had manipulated prices and taken an unfair advantage over consumers in the commodities market. The report, released Wednesday, caps a two-year investigation.

Will this report affect bank stocks Thursday? If so, it's a good time to buy them, according to the CNBC "Fast Money" traders.

Commodities is an issue now only because prices have moved lower, Guy Adami, managing director of stockmonster.com, said. Tim Seymour, managing partner of Triogem Asset Management, agreed, saying the whole thing is "ridiculous" because banks have been out of commodities trading for months, and in some cases years. No one had an issue when commodity prices were rising, he said. 

If bank stocks trade lower on this news it's a buying opportunity, said Brian Kelly, founder of Brian Kelly Capital. "I'd be a big-time buyer," agreed Pete Najarian, co-founder of optionmonster.com and trademonster.com. Specifically, he likes Goldman Sachs (GS) , JPMorgan Chase  (JPM) and Morgan Stanley (MS) . 

Another opportunity is in Qualcomm (QCOM) , whose shares slid 2% following its analyst day. Investors can stay long the stock as long as shares stay above the recent low of $68, Adami said. Seymour agreed, adding that all of the bad news seems priced into the stock near current levels. 

Kelly argued that shares of Qualcomm trade "terribly" and investors should avoid the stock, especially if it breaks below $69. Najarian said he prefers Intel (INTC)

Najarian also likes Yahoo! (YHOO) , which announced a five-year partnership with Mozilla. The deal is unlikely to be accretive to the bottom line, he said. But the stock seems likely trade up to $55 thanks to Yahoo!'s stake in Alibaba (BABA) . As long as Yahoo! stays above $50, investors can stay long, said Kelly. Seymour added that investors should not be initiating new long positions in Yahoo! near current levels. 

JetBlue Airways (JBLU) announced that it will begin charging customers a baggage fee, a move that will generate annual revenue of $400 million, according to the company. 

But that's not a strategy that Gary Kelly, CEO and chairman of Southwest Airlines (LUV) , plans to implement. The number of customers Southwest would lose wouldn't replace the added revenue from baggage fees, he explained. It's not good to "nickel and dime" the customer, and the company's competitors are doing it a favor by deciding to do just that. It wouldn't be surprising to see some JetBlue customers come to SouthWest now, he concluded. 

Investors might struggle trying to decide which airline to fly, but not which to buy. According to Kelly, investors can buy both Southwest Airlines and JetBlue Airways near current levels. 

Southwest is making a mistake, Najarian said. Delta Air Lines (DAL) recorded over $800 million in baggage fee revenue in 2013 and expects to bring in over $1 billion in fees this year.

The conversation shifted to Cliffs Natural Resources (CLF)  following the stock's 20% decline. The $1.56 billion market cap company may be responsible for paying $700 million in closure costs for its Bloom Lake mine. 

Don't buy CLF near current levels, Seymour said, despite being long the stock. If investors are tempted to buy, they should wait for iron ore prices to bottom out before getting long the stock. 

Adami said investors can start to build a long position in U.S. Steel (X) near current levels. While the stock may decline to $31 in the shorter term, it seems poised to climb to $43 in the longer term. 

Kelly said China is "de-stocking" commodities. He is a seller of the CurrencyShares Australian Dollar ETF (FXA) . Seymour added that investors can also sell the CurrencyShares Canadian Dollar ETF (FXC)  because of the strong U.S. dollar, which seems poised to move higher. 

For their final trades, Seymour is buying Bank of America (BAC) and Najarian is a buyer of Foot Locker (FL) . Kelly said to sell the iShares High Yield Corporate Bond ETF (HYG) and Adami is buying Deckers  (DECK) .

-- Written by Bret Kenwell

Follow @BretKenwell

 

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