Is the Commodities Bubble Popping?- Fast Money Recap (4/29/08)

by: Miriam Metzinger

Recap of CNBC's Fast Money, Tuesday April 29. Click on a stock ticker for more analysis.

ConcoPhillips (NYSE:COP), Potash (NYSE:POT), Wal-Mart (NYSE:WMT)

Jeff Macke discussed oil’s 2% slide downward and thinks gold is a better short than oil, which hasn’t yet topped. Karen Finerman thinks the dollar has yet to hit bottom, and says the Fed should not cut rates.. Pete Najarian said investors are leaving oil, metals and agriculture behind after they have had amazing runs. He discussed POT’s and COP’s numbers and thinks investors should be willing to take some off the top, but with oil at $110, commodities might have further to go. Karen Finerman thinks agriculture stocks could be hurt by a backlash against ethanol, but Najarian thinks the agriculture bull market is fueled more by the rising demand for food than by ethanol. He thinks POT dipped only because of an analyst’s prediction and is not lowering his $300 target for Potash. Macke said while ethanol might not be the catalyst for the agriculture bull market, the bubble will burst eventually and ethanol may have a role to play. He noted record performance for WMT and thinks the stimulus checks will help the consumer.

U.S. Oil Fund (NYSEARCA:USO), Baker Hughes (NYSE:BHI), Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL)

Najarian predicts USO will drop given options activity, and Adami is bullish on BHI after a 50% correction. He also likes SLB and HAL.

Citigroup (NYSE:C), Financial Select Sector SPDR (NYSEARCA:XLF)

Citigroup backtracked on an earlier statement by the CFO that it would not need to raise capital and raised $3 billion in a stock offering. Shares fell, and Finerman says investors felt deceived by the bank’s earlier statements. Adami noted that Bear Stearns did the same thing and Macke said Citigroup needs to raise more capital. He thinks the heat will be off the financials after a run following the Fed meeting. Najarian said XLF reached resistance level of $27 seven times, and Citi’s selloff contained the ETF.

Merck (NYSE:MRK)

Merck dropped 9% after the FDA rejected its cholesterol drug. Najarian said the result was surprising and thinks MRK could be a buy at the current price. However, Macke said Merck has had too much bad news and he would look elsewhere.

Take Two (NASDAQ:TTWO), Electronic Arts (ERTS)

Michael Pachter, gaming analyst at Wedbush Morgan discussed TTWO’s smash hit game Grand Theft Auto 4, which is expected to be one of the greatest games ever. However, Pachter thinks Grand Theft’s success is already priced into TTWO’s stock and doesn’t think ERTS’ bid for the company will be significantly altered by the game’s success.

Fed Meeting and GDP figures

CNBC correspondent Steve Liesman said the GDP numbers will be lackluster to mildly positive. He said to look out for inventory numbers and thinks the consumer is starting to spend, thanks to the stimulus checks. Liesman predicted Bernanke’s statements will be mild in order to avoid conflict within other Fed members and says he will find other strategies to help the economy besides cutting interest rates. Adami reiterated his prediction that the dollar will be stronger in the second half of the year.

Mastercard (NYSE:MA), Corning (NYSE:GLW), Wal-Mart (WMT), Pepsi Co (NYSE:PEP), Apple (NASDAQ:AAPL), Broadcom (BRCM), Qualcomm (NASDAQ:QCOM)

On strong earnings from MA and GLW, the group wondered whether the economic crisis was ending. Macke said that the real winners like GLW and WMT were not blaming the economy for problems and he would sell some GLW because he predicts a pullback. Finerman is bullish on PEP and AAPL and Najarian likes QCOM and BRCM.

Trader Radar: Rent-A-Center (NASDAQ:RCII) traded on unusual volume on Tuesday.

Berkshire Hathaway (NYSE:BRK.A), Wells Fargo (NYSE:WFC), Burlington Northern Santa Fe (BNI), Johnson & Johnson (NYSE:JNJ), American Express (NYSE:AXP),

The group discussed Warren Buffett’s success despite the troubled economy and Macke and Finerman suggested buying BRK.A. Adami thinks Buffett is bullish on WFC for its management, BNI for pricing power and JNJ for its consumer products. Najarain says AXP has more upside than BNI or JNJ.

Commodities Bubble Has Popped

Dennis Gartman told the group that he thinks the commodities bubble has popped and would short Deere (NYSE:DE)

Final Trade: Macke: Sell Citigroup, Adami Short Dow30ProShares (NYSEARCA:DOG), Finerman: Altria (NYSE:MO), Najarian Biogen Idec (NASDAQ:BIIB)

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