Recap of CNBC's Fast Money, Tuesday January 6.
In spite of news from the Federal Reserve minutes painting a bleak picture of the economy, stocks rose on the hope of a hastened government stimulus. Guy Adami noted that 75% of the stocks on the NYSE rose 3 times last week, a pattern that also happened in 1938 prior to major rallies. He would buy Toyota and Mosaic, because both stocks perform well even on bad news.
Bank of America CEO Kenneth Lewis says he is willing to forego his 2008 bonus as the bank’s expectations fall dramatically. Karen Finerman expects to see bigger losses, while Pete Najarian thinks Visa stands head and shoulders above other financials. Guy Adami doesn’t think financials will lead the market, but doesn’t think things are too bad, while Jeff Macke says it is hardly possible to analyze banks, “Who knows what is on their balance sheets?”
Technology stocks shone as a sector expected to receive special attention from Obama. Microsoft climbed on news that its Xbox video game is trouncing its competitor Playstation. Najarian would buy Hewlett Packard and Nvidia,which he thinks has more upside potential. Adami agrees about Hewlett Packard and would buy it on a pullback.
Apple fell after its underwhelming MacWorld Conference that did not feature CEO Steve Jobs or any new products. The only news at the conference was that Apple is dropping copy protection from songs sold on the internet and it released its slimmest ever 17 inch laptop.
Alcoa is cutting back its production and eliminating 13,000 jobs. Guy Adami thinks this is bullish news, likes Alcoa as a value play and thinks it may be an attractive takeover target.
Commodities continued their upward climb with Freeport and Alcoa going higher. However, oil dipped below $49 a barrel in spite of the Mideast crisis and OPEC’s production cuts. Jeff Macke says anyone who isn’t taking profits in Freeport after a 30% gain is nuts, while Najarian said he wouldn’t chase commodities. However, Adami noted Bristow Groups 10% pop and said he thinks it will go higher.
The Volatility Index fell 8% to its lowest level in 3 months. Jon Najarian would look to the tech-heavy Nasdaq, since tech stocks are expected to rise and fall with the many conferences coming up. He would also buy InVentiv Health which should spike up ahead of the JP Morgan Healtcare conference and likes BiogenIdec because it is cheap.
For the third consecutive day, the dollar was up against the euro and the yen. Is this a sign of a higher trend, or has the dollar peaked for now? “I don’t think the dollar will run a lot more versus the euro in the near future. It's already made substantial moves,” said Fast Money guest Dennis Gartman, adding the same goes for the yen and many other currencies which are all headed lower. Gartman thinks gold will be the beneficiary of this trend, but adds he is not so bullish on the gold metal.
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