That 70s Economy - Fast Money Recap (5/8/08)

by: Miriam Metzinger

Recap of CNBC's Fast Money, Thursday May 8. Click on a stock ticker for more analysis.


Karen Finerman and Jeff Macke thought AIG's proposal to raise its dividend in spite of a loss that was double The Street expectations is foolish and will not improve the company's image.

Schlumberger (NYSE:SLB), Exxon Mobil (NYSE:XOM), ConocoPhillips (NYSE:COP), U.S Oil Fund (NYSEARCA:USO), Joy Global (JOYG), Energy Conversion Devices (NASDAQ:ENER), Hess (NYSE:HES)

As oil continued its upward climb and reached $124, Pete Najarian credited higher oil prices for fueling Thursday's rally and said SLB and HAL are leading the sector. Adami thinks COP is cheaper than XOM and Macke recommends USO. Finerman said the role of demand was important to consider. Macke thinks oil will cost $120 a barrel or more for the next three years. John Terranova joined the program and said oil futures are very expensive, and the rising price of oil is not just speculation. He would buy oil names or Hess. Najarian commented JOYG has sold all of its underground equipment for 2009. Najarian noted ENER's spectacular earnings beat as it reported a 17 cent per share profit when The Street estimated a 6 cent loss.

Wal-Mart (NYSE:WMT), Children's Place (NASDAQ:PLCE), Aeropostale (NYSE:ARO), Saks (NYSE:SKS), Eastman Kodak (EK), Target (NYSE:TGT)

On Wal-Mart's strong numbers, Finerman suggested taking a look at PLCE and ARO. Macke was surprised by SKS' 9% rise given the current climate. Najarian noted increasing call activity in EK and Adami predicted a short-covering rally for EK. Target has been lagging behind Wal-Mart and Macke suggested the company consider lowering its prices, expanding globally and focusing more on retail and less on its credit operations. Najarian thinks TGT isn't broke and wouldn't try to fix it.

McDonald's (NYSE:MCD), Burger King (BKC)

On MCD's announcement of strong international sales, Macke said the price is right for MCD. Najarian thinks BKC is every bit as good as MCD but is cheaper.

Citigroup (NYSE:C)

Concerning Citigroup's investor meeting on Friday, Finerman says she wants to hear that Citi will spin off its consumer banking segment, although Macke doesn't expect any new developments, because CEO Vikram Pandit is still playing for time. While Finerman doesn't expect a rapid recovery for Citi, Adami would buy the stock on declines.

Amy Cappellazzo, head of contemporary art at Christie's Auction House

Amy Cappellazzo reported international sales are strong in spite of a weak U.S. economy. Although there may be a decline in demand, she doesn't see one soon. Adami would buy Sotheby's (NYSE:BID) on this information.

Trader Radar: Hansen Natural (HANS) traded on an unusually high volume on Thursday.

That 70s Economy: McDonald's and Ford (NYSE:F)

The group discussed similarities between the present era and the 70s including conflict in the Middle East, rising oil prices and frustration with government. The economic decline of the 70s was followed by a boom period in the 80s, and the group said the same could happen again. Adami would buy MCD and F on these parallels. Najarian commented Ford shows a willingness to integrate oil alternatives.

Final Trade: Macke: Sell some Activision (NASDAQ:ATVI), Adami: Cisco (NASDAQ:CSCO), Finerman: JP Morgan (NYSE:JPM), Najarian: Nike (NYSE:NKE),

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