Fast Money Recap, 4/2/08: Bernanke's Tough Medicine

Recap of CNBC's Fast Money, Wednesday April 2. Click on a stock ticker for more analysis.

Energy: Sunpower (SPWR), Suntech (STP), Energy Conversion Devices (ENER) Schlumberger (SLB), Baker Hughes (BHI), First Solar (FSLR), US Oil Fund (USO)

Pete Najarian commented that oil is up, but that didn’t prevent solar from rallying on news from a German energy conference where it was reported that while producing solar energy costs three times as much as producing oil and natural gas, the price of solar might fall to the level of the other two sources within the year. He likes ENER as well as FSLR. Macke commented on USO’s 3% rise and predicts oil will reach over $110. He moved his stopout from $95 to $99.

Bernanke's Remarks

Jeff Macke said Bernanke’s comments will have a bearish affect on the markets and thinks Treasury Secretary Paulson’s remarks will be more important. Karen Finerman disagreed and thinks the Fed Chairman still has his “hands on the rudder.”

Financials: Merrill-Lynch (MER), Bear Stearns (BSC), Thornburg Mortgage (TMA)

Bernanke commented that BSC would have been headed for bankruptcy if it weren’t for JP Morgan’s rescue. On MER’s news that it will cut its workforce by 10% to 15%, Finerman expressed concerns for the Manhattan real estate market. Najarian doesn’t think put activity in TMA is necessarily bearish.

Best Buy (BBY), Corning (GLW), Apple (AAPL)

BBY reported a strong quarter but could not hold gains, and Macke attributes this to the tough sector, but still calls BBY best-of-breed. News of solid laptop sales will be good for AAPL, said Najarian, but Macke noted laptop margins are low and the company needs to sell higher-margin items, like software. Adami said GLW is the best stock in the electronics space.

The Dow

The group analyzed a chart showing the double bottom in the Dow. Adami believes the market bottomed with the Bear Stearns bailout and is headed higher.

Agriculture: Monsanto (MON), DuPont (DD)

Adami commented MON was unjustly punished for not raising guidance when it raised guidance last week. Najarian added investors are not sure whether MON is a seed or a fertilizer play and his favorite ag stock is DD.

Autos: LoJack (LOJN)Capital One Financial (COF), Autonation (AN) , Carmax (KMX), Penske (PAG), Harley Davidson (HOG)

The group speculated on the possibility of an auto credit crunch on news that late payments for cars reached a ten year high. Finerman would short COF, which issues auto loans, and says AN, KMX and PAG are not as risky. Anti theft device maker for cars, LoJack saw a steep decline in is shares and the group speculated that perhaps people don’t want to bother stealing cars. Macke observed KMX’s strong performance on sluggish earnings, but sees trouble ahead for HOG.

Jon Najarian: Landstar (LSTR), YRC Worldwide (YRCW), Northrop Grumman (NOC), Lockheed Martin (LMT), Home Depot (HD), Fed Ex (FDX), Anheuser Busch (BUD)

Jon Najarian thinks the recession has arrived and has left and likes early-cycle trucking companies, LSTR and YRCW. He predicts strength in aerospace and defense for the next year to year and half and is bullish on NOC and LMT. He noted strong action in HD and FDX and added sin stocks like BUD often thrive in a recession but begin to decline as the economy recovers.

Piper Jaffray analyst Gene Munster with Apple (AAPL), Nokia (NOK)

Gene Munster discussed speculation that the absence of iPhones from shelves may be reason to suspect an incipient release of a 3G phone, since a good company doesn’t just let supplies lag. Macke says if this is the explanation, the release of the new phone had better not be later than May. Najarian said NOK is the best story never told.

Tech: Research in Motion (RIMM), China Mobile (CHL)

Najarian benefited from RIMM’s rise not through buying the stock but from an options trade, and thinks the news will be good for CHL. He advised against chasing RIMM up.

Trader Radar: Expedia (EXPE) were among the most active on the Nasdaq Wednesday.

Micron Technologies (MU), Ruby Tuesday (RT)

Najarian reported MU traded higher in after-hours trading on success in Asian markets. He discussed its heavy call buying. Macke was not surprised by RT’s decline on disappointing revenue. He said casual dining is on the skids.

Subprime Savants: Bill Ackman, MBIA (MBI), Ambac (ABK), Wal-Mart (WMT), Barnes & Noble (BKS), Borders (BGP), Target (TGT)

The group discussed Bill Ackman who secured a 22% increase for his hedge fund by shorting MBI and ABK. He is now bullish on Target. Macke added Ackman is a shrewd investor who puts pressure on companies after buying a large stake; he hold substantial positions in BGP and BKS. Macke agrees with Ackman about TGT, while Finerman prefers WMT.

Final Trades: Macke: Apple (AAPL), Adami: Western Digital (WDC), Finerman: short Capital One, Najarian: Nokia.

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