Will the Exxon Go Green? Fast Money Recap (5/27/08)

Recap of CNBC's Fast Money, Tuesday May 27.

Top in Oil: UltraShort Oil and Gas ProShares (DUG), Baker Hughes (BHI)

As oil dropped to $128 after hitting record highs last week, the group discussed whether the top is in or if it was merely a bubble that popped. Guy Adami says a strong performance from DUG indicates a short-term top while Pete Najarian recommends service and exploration plays like BHI, since the company doesn’t depend on the price of crude. He thinks BHI will reach $100.

Trusting Tech: Apple (AAPL), Google (GOOG), IBM (IBM), Hewlett-Packard (HPQ), Cisco (CSCO), Juniper (JNPR)

On oil’s drop and hope that the consumer may start spending, AAPL, GOOG, HPQ and CSCO jumped. Adami commented that while the sector may be recovering, he wouldn’t run into tech. Macke thinks there are more “huge storms” on the horizon and wouldn’t trust tech. Najarian is bullish and would buy CSCO and JNPR on 3G buildout. He notes analyst price targets for Apple at $200.

Rockefellers Go Green? Exxon Mobil (XOM)

XOM led energy stocks down ahead of its meeting during which it is expected that the Rockefellers will push for the development of alternative energy. Jeff Macke remarked, “That doesn’t make sense. They’re an oil company!” Karen Finerman says there is enough money to diversify into alternative energy, and Najarian agrees. Adami doesn’t think XOM has been a good way to play rising oil and notes it trades at a premium to Chevron. He would consider getting into XOM with a $86 handle.

Financial Mess: Bank of America (BAC), Financial Select SPDR (XLF), Lehman Brothers (LEH), Visa (V), Mastercard (MA), American Express (AXP), Goldman Sachs (GS), Morgan Stanley (MS)

Najarian is concerned that heavy put activity in BAC is bringing down financials, although XLF managed to squeak by. BAC predicted a second quarter loss for LEH, which actually performed decently on Tuesday, and cut its outlook for GS and MS. Macke said financials are trading vehicles. Najarian would buy V, MA and AXP.

GM Stalled: GM (GM), American Axle (AXL), Borg Warner (BWA)

After a Citigroup downgrade, GM fell to its lowest level since 1981, since the company is expected to spend $7 billion in cash and may have to raise capital. Guy Adami would look at downstream plays AXL and BWA.

China Cracks: iShares FTSE China (FXI), PetroChina (PTR), Humana (HUM), Costco (COST),Wal-Mart (WMT)

Steven Cortes, CEO of Veracruz says decoupling is a myth, and China’s growth is dependent on the U.S. consumer, who is currently worried about spending. This spells the end of the China trade. Cortes would short FXI, PTR, and buying Humana COST and WMT.

Head in the Clouds: Google (GOOG), Adobe (ADBE)

Google is developing an innovative way of obtaining computer services from outside sources and paying only for what is used. This is called “cloud computing” and only proves that Google is “the oxygen of the internet,” according to Piper Jaffray senior research analyst Gene Munster. He is also bullish on ADBE, which is creating a similar product.

Cool Coal: Bucyrus (BUCY), Greenbrier (GBX), Westinghouse Air Brake (WAB), Joy Global (JOYG)

Oil may be dropping, but coal is rising in value, and Najarian is bullish on BUCY and GBX. Adami noted Carl Icahn holds shares in GBX and he likes WAB and JOYG.

Creature Comforts: Wal-Mart, Microsoft (MSFT), Comcast (CMCSA), Time Warner Cable (TWC), Home Depot (HD), Six Flags (SIX)

onny Deutsch, host of CNBC’s “The Big Idea” discussed the trend toward comfort and away from conspicuous consumption. He thinks people will travel to spots closer to home, will seek retro items and will cocoon and grill in their back yards rather than eat out. Najarian would buy MSFT, HD and WMT on the comfort trend, while Finerman thinks cable companies CMCSA and TWC will benefit. Guy Adami thinks more people will go to Six Flags rather than on exotic vacations.

Trader Radar: Darden Restaurants (DRI) traded on extraordinary volume on Tuesday.

JetBlue Blues: JetBlue (JBLU), Boeing (BA)

On news of JBLU’s deferred orders and need to raise capital, Finerman thinks the company may be in trouble. The misery could spread to BA, said Macke.

Ethanol Boondoggle Bust: Tyson Foods (TSN), Pepsico (PEP), Clean Energy (CLNE)

The group agreed that ethanol is a boondoggle obsession that should end, and Finerman believes TSN is a good way to play the end of the corn fuel. Macke said things would improve for PEP, which uses corn in many of its products and Adami thinks natural gas will be the winner, and would buy CLNE if the government scraps its ethanol agenda.

Fast Messages: MDU Resources (MDU), Molson Coors (TAP)

One viewer was looking for a patriotic stock that would do well in the current energy climate and Adami chose MDU on a pullback. Macke said TAP is the best of the beers. Finerman told a third viewer that wind would be the strongest energy sector for the next decade, while Najarian predicts wind, natural gas and solar combined will do the job.

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Comments

[windinmyface2:]

"Karen Finerman says there is enough money to diversify into alternative energy, and Najarian agrees". Two communist, they are traders to this country, and are undermining this country as our enemies do. All the GREEN MEANIES should crawl in a hole some where, and let this country, and its FREE market operate unhindered.

2008 May 29 01:52 AM

[Bright:]

I would agree although, markets have always been manipulated so how can we operated our free market unhindered?

2008 May 29 08:15 AM