Fast Money Recap - American Express: Don't Leave Home with It (12/10/08)

CNBC's Fast Money Recap, Wednesday December 10.

Auto News: GM (GM), USO (USO), Vale (RIO), BHP Billiton (BHP), Nucor (NUE)

Wednesday was volatile because of the uncertainty over the proposed government bailout of GM and Ford. Oil rose on news the Saudi Arabians are cutting supplies. Karen Finerman, however, is shorting oil because she says the rise in price does not make sense, given the fact inventories have not been reduced. Gold rose to a 10 day high of $800 an ounce and took copper with it. Tim Seymour thinks commodities are going higher and likes VALE and BHP. Guy Adami agrees with Seymour about commodities and notes Nucor went up even on not great news.

No Credit: American Express (AXP), Visa (V), Mastercard (MA), Capital One Financial (COF)

American Express shares plummeted when Banc of America and Citigroup gave the stock a “sell” rating, citing the company’s vulnerability to credit problems and slow spending. Visa and Mastercard also saw lowered ratings on declining fundamentals. Karen Finerman would short Capital One Financial, and Adami would buy Mastercard on weakness.

Commodities Coming Back? Exxon Mobil (XOM), Devon (DVN), Dynegy (DYN), EOG Resources (EOG)

Rumors are spreading that emerging markets will send commodities soaring once again, but others say the drop commodities saw after the hedge-fund propelled bubble will keep the sector down for a while. Whatever the scenario, Joe Terranova likes high cash low debt companies like XOM, but he warned of a January selloff in commodities. Tim Seymour would play iron ore with BHP and Vale. Finerman suggested Devon or Dynegy for natural gas, but Terranova thinks EOG is the to natural gas play.

Fat Dividends: Reynolds (REI), Philip Morris (PM), Diageo (DEO), Harley Davidson (HOG), PG&E, (PCG), Altria (MO)

Everyone is talking about dividends, but which dividend stocks are safe? Karen Finerman likes liquor and tobacco stocks such as PM, DEO and REI with a predictable business model. Macke also likes PM. Finerman would beware of HOG because it is linked strongly to consumer spending. Guy Adami likes utility stock PG&E and thinks it has bottomed.

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Comments

[Ames Tiedeman:]

AXP is a great name. Long term it is a winner. People will still spend money. Hopefully in a more responsible way in the future. What is a name worth? A lot when it is American Express.

2008 Dec 13 05:50 PM