Recap of CNBC's Fast Money TV program, Monday April 27.
Conventional wisdom is saying that China is the engine that drive the recovery with its $585 billion stimulus and surging demand for fast-food products and industrials. Yum and Caterpillar have risen on this optimism, but Steve Cortes the founder of Veracruz, thinks being long China might be dangerous. The telltale sign that China is not rebounding, according to Cortes, is that crude oil has not been rising. Since China is the center of manufacturing, any recovery for China should be accompanied by a surge in oil. Cortes would short the FXI and said as long as it stays below last week's highs, it will go lower.
Karen Finerman singled out small cap chipmaker Emmulex as a trade on artificial intelligence and converged networking solutions. She thinks Broadcom might make another attempt at a hostile takeover or IBM or Dell might also be potential buyers.
Stocks traded slightly lower on fears over swine flu, but the biotech sector did well on hopes companies like GlaxoSmithKline, Baxter, Crucell and Gilead could develop a vaccine or a treatment. Jon Najarian likes Crucell and Gilead in particular but noted that since these stocks are trading down to session lows, the panic might be easing. He added GSX and BAX to the list. Mike Khouw thinks the government might want to stockpile vaccines.
While swine flu is proving to be a catalyst for the biotech sector, oil, airlines and hotels all dropped lower on fears that travel might spread the disease. Continental Airlines lost 15% and Carnival Cruise Lines showed heavy losses along with Starwood and Marriott. The peso has fallen 3% and Tim Seymour would avoid investing in Mexico now, but he noted that during the SARS crisis, metals made unexpected gains.
Corning shares rose higher the company's earnings beat and resurgence of demand for flat screens for televisions. Dan Fitzpatrick is a bull on Corning and says the chart shows the path of least resistance is higher. However, Joe Terranova prefers Apple as a tech play.
Karen Finerman thinks the decline in Mexican stocks has been too extreme and would take a look at PAC and American Movil, a Mexican phone company which might actually benefit from the crisis as Mexicans might make more phone calls to ensure the safety of family and friends. Pete Najarian would keep an eye on Hess because of options action. Guy Adami thinks Marriot is a good short.
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