NEW YORK (TheStreet) -- Stocks bounced back Thursday with the S&P 500 climbing roughly 0.5%. However, it was the rally in bonds that caught the eye of Guy Adami, managing director of stockmonster.com.
On CNBC's "Fast Money" TV show, he pointed out the iShares 20+ Year Treasury Bond ETF (TLT) rose 1.35% on the day. Friday's non-farm payrolls report will ultimately be the catalyst to take bonds either higher or lower.
Brian Kelly, founder of Brian Kelly Capital, remains "very cautious," however, and took off many "risky" positions on Thursday. It's hard to position when it's unclear how the market will react to April's non-farm payrolls report on Friday. He believes oil will go lower, which will be beneficial to transportation stocks, particularly airline companies.
March was a big disappointment when it came to the labor results, said Dan Nathan, co-founder and editor of riskreversal.com. If the April report is strong, it increases the odds the Federal Reserve will raise interest rates sooner rather than later. If stocks rally despite that perception, it's bullish, he said.
However, if the labor report is bad, it will give investors the perception the Fed will delay a potential rate hike. If stocks rally on this news of a slower-than-expected rate hike from the Fed, that's bearish news, Nathan reasoned.
U.S. stocks and oil prices will suffer if the strong U.S. dollar continues, added Steve Grasso, director of institutional sales at Stuart Frankel. He also pointed out that a rally in the euro will likely cause European stocks to decline.
Grasso finds many energy stocks overvalued because investors are assuming oil prices will continue to rise, possibly up to $85. Because they're basing their estimates on such high oil prices, the sector seems overvalued.
Oil prices have gone up over 30% from their lows, which has weighed on consumer discretionary stocks like Nike (NKE), Wal-Mart (WMT) and Macy's (M), Nathan said. He believes it will be tough for these stocks to rally if oil prices continue going higher.
Yelp (YELP) shares soared 23% on Thursday after the company confirmed reports it is exploring selling itself. Nathan said don't buy the stock since exploring a sale is far from actually selling the company.
Yelp was Mark Mahaney's top small-cap tech stock pick for the year. Mahaney, a managing director at RBC Capital Markets, thinks the stock could be a takeover target. The most likely buyer is Yahoo! (YHOO), he said, but others include Alibaba (BABA), Facebook (FB) or Google (GOOGL).
Shares of Yelp are now in "no man's land," according to Adami. When it comes to Yahoo!, investors can stay long the stock with a stop-loss at $42. If Yahoo! buys Yelp, it'll cause a selloff in Yahoo!, Kelly added.
At this point, Yahoo! CEO Marissa Mayer shouldn't be doing any M&A activity because she hasn't created much shareholder value throughout her tenure, argued Eric Jackson, founder and president of Ironfire Capital and a contributor to TheStreet.com. The company only has $6 billion in net cash, so a deal for Yelp -- likely around $4 billion to $5 billion -- is almost completely out of the question.
If the deal were to ever go through, there would be an uproar from shareholders, of which he is one. Instead, Jackson thinks Mayer should focus on improving the core business and introducing new products.
For their final trades, Nathan is buying 3D Systems (DDD) and Grasso is a buyer of DuPont (DD). Kelly is selling the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and Adami is buying Whole Foods Market (WFM) with a stop-loss at $41.