Fast Money Recap, Wednesday July 8.
The IMF released hopeful news of an incipient recovery for the global economy. Asia will be the driving force behind the upward move which could see 6% growth in China and 2.5% growth in the U.S by the beginning of next year. Eugene Profit of Profit Investments discussed his three picks for the recovery: Blue Nile, UPS and Visa. Profit likes UPS' balance sheet and said, “It has 20% better yield on package delivery than rival FedEx and it’s now at a price point where you can buy it.” Profit thinks growing e-commerce will be good for Visa; he bought the stock at $59 with a $70 price target. Profit says Blue Nile is becoming the "go" place for diamonds and has seen 6% revenue growth year over year in spite of the slowdown.
Hope in Alcoa (NYSE:AA)
Alcoa rose nearly 7% in after hours trading after a reporting a less-than-expected loss of 26 cents per share rather than 38. Tim Seymour thinks the news is bullish because Alcoa usually disappoints anyway, and Guy Adami thinks the stock may be a bellwether for the S&P 500 which was at 870. Karen Finerman disagrees and doesn't think Alcoa's results say anything in particular about the macro situation. Joe Terranova thinks the way Alcoa management cut costs and weathered the crisis is commendable.
Sanford Bernstein cut estimates for Goldman Sachs and Morgan Stanley on concerns about the costs incurred through paying back TARP money. Karen Finerman sees this as a buying opportunity for the long-term. Tim Seymour agrees and doesn't think the fundamentals of the banks are damaged. The group discussed briefly bearish remarks from American Express CEO Ken Chenault; Tim Seymour doesn't think the recovery can happen without momentum from the consumer and Finerman predicts news about same-store sales will give more clarity about consumers.
Discount names are performing well in retail, particularly Family Dollar which reported a 36% gain in quarterly profit. Tim Seymour also likes Kohl's, Dick's Sporting Goods and Wal-Mart. Guy Adami predicts Family Dollar will reach $35.
Google plans to launch an operating system which may threaten Microsoft. CNBC's Jim Goldman doesn't think the news will be so bad for Microsoft, which is expected to release its Windows 7 by the end of 2009 and Google's system is likely to be released later.
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