'Fast Money' Recap: Apple, Google, Alibaba Earnings on Tap for Next Week

 

NEW YORK (TheStreet) -- The S&P 500 ended higher on the week, climbing 0.36%, while the Nasdaq finished higher by 1.16% for the holiday-shortened week. Now that the European Central Bank has announced its stimulus intentions, investors can get back to focusing on earnings; there's plenty to focus on next week.

Everyone will likely be focused on Apple (AAPL) , Guy Adami, managing director of stockmonster.com, said on CNBC's "Fast Money" TV show. Shares climbed through $112.50 on Friday and some technicians are saying the stock is breaking out. However, it seems unlikely Apple will release results that completely blow away investors' expectations, Adami said, and the stock looks likely to pull back to $108 after earnings. 

It won't just be one quarter's worth of strong revenue for Apple, said Steve Grasso, director of institutional sales at Stuart Frankel. Consumers have been waiting a long time to buy the iPhone 6 and iPhone 6 Plus. Now that inventories are back to normal levels, sales should continue to be strong throughout the year. The stock is poised for higher prices. 

Alibaba (BABA) also reports earnings next week. The stock seems poised to beat expectations, according to Tim Seymour, managing partner of Triogem Asset Management. This could give a boost to shares of Yahoo! (YHOO) , but the stock seems to be "capped" at $51 to $52, he added. 

Google (GOOGL) , which also reports earnings next week, could struggle since its stock has rallied so much in the past few days, up 6.3% since Wednesday. Seymour likes the stock based on valuation but remains cautious headed into earnings. 

Shares of Yahoo! have been "floundering" around $50, Adami said. Management really needs to prove itself when it reports earnings next week. It will likely be the company's most important earnings report since the Alibaba IPO. 

In general, next week's earnings are setting up to be a "sell the news" event, Grasso reasoned. The S&P 500 seems poised to move lower as it declined toward its 50-day moving average on Friday. 

Brian Kelly, founder of Brian Kelly Capital, reiterated that cautious tone headed into next week, saying investors should fight the urge to buy tech stocks on Monday ahead of earnings. As for the European Central Bank's actions, its quantitative easing methods seem unlikely to be effective, so investors who are long European stocks should be cautious, too.

When the Federal Reserve initiated quantitative easing in the United States, it was done partly to lower interest rates. However, rates are already low in Europe, Kelly said. The best-case scenario is the euro continues lower. However, since the euro appears oversold and European stocks seem overbought, he is a seller of the iShares MSCI Germany ETF (EWG) . 

Seymour agreed with Kelly's assessment, adding that sentiment for the euro is really negative. Investors who sold-short the euro or the CurrencyShares Euro Trust ETF (FXE) should cover their short positions. 

Over time, the euro is likely to head lower and the U.S. dollar is headed higher, Grasso said. Because the dollar is headed higher, oil prices are likely headed lower. For that reason, he is a buyer of the ProShares UltraShort Oil & Gas ETF (DUG) . 

Gold prices seem likely to appreciate, but the best way to play a rise in the gold market is through the miners, said Adami. He would buy the Market Vectors Gold Miners ETF (GDX) . 

For their final trades, Seymour is buying United Parcel Service (UPS) and Kelly is a buyer of Alliant Techsystems (ATK) . Grasso said to buy Lockheed Martin (LMT) and Adami is buying Rockwell Collins (COL) .

-- Written by Bret Kenwell

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