Retail on a Tear - Fast Money Recap (8/11/08)
Recap of CNBC's Fast Money, Monday August 11.
Oil Volatility Dictates Trading – Apache (APA), Chesapeake (CHK), PowerShares DB US Dollar Index Bullish (UUP), ExxonMobil (XOM), XTO Energy (XTO), Schlumberger (SLB), Transocean (RIG), Flowserve (FLS), ConocoPhillips (COP), Potash (POT), Arch Coal (ACI), Agrium (AGU)
The news: Oil prices fell on Monday as a drop in crude imports by No. 2 consumer China outweighed concerns over supply disruptions stemming from the conflict between Russia and Georgia. The plays: The oil trade is probably being driven by the strong dollar, explains Joe Terranova. But natural gas has my attention. I think gas is probably finding a bottom. Look at Apache and ExxonMobil, he says. If oil moderates and stops going down, theintegrated names should trade higher. I’d look at ExxonMobil on a valuation basis said Adami. I bought the PowerShares DB US Dollar Index Bullish on Monday said Macke, as a dollar trade. Adami said his trade is XTO Energy. “The stock is down 30% since the end of June and valuations look okay,” he says. Other trades Adami likes include Schlumberger and ExxonMobil. Finerman is long Transocean and Flowserve. Najarian said he likes many of the stocks mentioned above. Look at ConocoPhillips and Exxon Mobil as well as BP. In energy I’d duck and cover and treat them all like they’re broken, he says. However I like Potash at $150, Arch Coal at $40 and Agrium at $60.
Retail on a Tear - Retail HOLDRs ETF (RTH), Wal-Mart (WMT), Kohl’s (KSS), Gap (GPS), Consumer Discretionary SPDR (XLY), Home Depot (HD)
The news: The Retail HOLDRs ETF jumped significantly on Monday as Wal-Mart, Kohl’s and the Gap leading the way. As we said above, investors are betting that the recent decline in oil prices will help boost consumer spending. I think the play is to sell into this strength, says Karen Finerman. Also, keep in mind Kohl’s is up something like 40% over the last few weeks. That’s too much too fast. I’m a seller too, says Jeff Macke. The RTH rallying 10% in 2 trading days is nothing more than an opportunity to sell. If you don’t mind a little more volatility look at the Consumer Discretionary SPDR counsels Pete Najarian. It should trade inversely to oil. If you're in Home Depot I would take profits, adds Guy Adami.
Airlines Move UpNothing helps airlines take flight like the plunging price of oil. In fact both the airlines and the automakers traded higher as oil retreated. A Morgan Stanley analyst is forecasting profits for the airlines in 2009, explains Pete Najarian. The analyst thinks all the recent cost cutting measures should bode well provided oil averages about $115 next year.
Banks Rise - Goldman Sachs (GS)On a forward basis I’d dump the financials, says Jeff Macke. The only buy in this group is Goldman Sachs. Guy Adami says “I also think Goldman is going higher.”
Moody’s Downgrade – Morgan Stanley (MS)
Shares of Morgan Stanley trader lower after hours as Moody's downgraded the investment banks debt rating to A1 citing Risk Management Miscues. The performance out of Morgan Stanley has been exceptional. However, Najarian said he would not chase it. I think it’s a buy at $40.
Olympic PlaysFew things are more prestigious than triumph at the Olympics. Now, Fast Money breaks down the nations vying for victory to see if their stocks could turn your portfolio into gold. No Olympics has meant more to a home nation than the current Olympics in Beijing. It’s the culmination of a 30-year economic expansion sparked by an ancient culture's embrace of free markets. This transformation of the world's most populous nation created insatiable demand for oil, steel and grain. As the Chinese built roads, buildings and blossomed into a wealthy society China's stock market surged sevenfold in just the last two years. But now the games are here and the story is beginning to unwind.
With the stock market losing half its value in '08 alone should you go for gold and continue betting on Beijing after the Olympics? The best China trade out there is probably Yum! Brands says Guy Adami. Pizza Hut and KFC are both huge there. (Of course, Taco Bell hasn’t really taken hold though, adds Karen Finerman with a wink.) I have issues with trading China, says Jeff Macke. It’s a communist nation that can repatriate assets whenever they want. If you must trade China I suggest McDonald’s because they’re simply exporting American taste. Look at Sohu. I like Nokia for emerging markets exposure, says Karen Finerman. But it’s not necessarily a China trade.
After Hours – LDK Solar (LDK)
On Monday LDK Solar posted quarterly earnings that blew away estimates as additional manufacturing capacity allowed the company to sell more solar wafers, sending its shares up 19 percent after hours. The Chinese solar power company also raised its revenue and wafer shipment forecasts for the year. That is solar fun but the trade is too hot for me to handle, says Karen Finerman.
Final Trade – Your First Move for Tuesday August 12.
Jeff Macke likes Wal-Mart (WMT).
Guy Adami recommends going long Schlumberger (SLB).Karen Finerman says to buy Microsoft (MSFT).Pete Najarian suggests long Marvell Technologies (MRVL).
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This article has 2 comments:
- David White
- 428 Comments
Aug 13 10:52 AM- ShareGyan
- 3 Comments
My Website
Nov 18 11:58 PMOnce again after crash Nifty has started going up. Now we suggest all rises should be used as an opportunity to exit old long positions.
This bull run will continue for few more days. Overall market is in bearish mood as in medium term its just a small rally due to short covering
and result season.
Happy Trading,
ShareGyan