Will Wal-Mart Heat Up Chile? Fast Money (6/17/08)

Recap of CNBC's Fast Money, Tuesday June 17.

Will Goldman Lose its Shine? Goldman Sachs (GS)

In spite of decent news from Goldman, the Dow dropped and stocks were mediocre. While the investment bank’s quarterly earnings declined 11% on slower trading, Goldman still avoided much of the credit crisis woes that have plagued other banks. However, Fox Pitt Kelton securities analyst David Trone says it will be a while before Goldman is a buy, because government regulation is looming over all the brokers; “their long term returns are going to be permanently suppressed and in my opinion they will consolidate," said Trone. However, Terrranova would buy Goldman under $160.

The Bulls Must Be Crazy: Morgan Stanley (MS), Keycorp (KEY), Bank of America (BAC), Regions Financial (RF), Visa (V), Mastercard (MA)

While The Street expects Morgan Stanley to report good news, the group noted the bank has taken $12.9 billions in write downs. Guy Adami said he might be crazy, but thinks Morgan might be a buy here. Macke agreed with him on the first part of his statement and said anyone buying financials needs a therapist. Najarian noted put buying suggests that Morgan will be going lower. He is also concerned about KEY, Bank of America, regional banks and doesn’t think RF will sustain its 12% dividend. Najarian likes Visa and Mastercard, because consumers use plastic when they pay at the pump.

Oil in Decline? Halliburton (HAL), Schlumberger (SLB), United States Oil Fund (USO)

Oil declined for the third straight day as the Saudis discussed increasing supply, and the group wondered if this is the end of the oil story. Najarian suggested buying Halliburton and Schlumberger, while Macke would “stick with what works”: USO.

Katrina Revisited: United States Natural Gas Fund (UNG)

Natural gas is approaching record highs set by Katrina in 2005, and Terranova would play the trend with UNG.

Best Buy (BBY) on Sale

Best Buy’s stock fell after it reported a 7% drop in first-quarter profit. Macke said the retailer “delivered all anyone would ask but got knocked in the chin” and added the decline wasn’t Best Buy’s fault because it doesn’t have any margins.

Stagflation on the Way

The numbers look grim. Housing starts hit a 17 year low, oil, food and wholesale prices are climbing while production fell 0.2%. Joe Terranova would not fight stagflation with gold, but would use the market neutral strategy of having long and short positions in each sector. For instance he might be long Wal-Mart and short Best Buy.

Wal-Mart (WMT) Heats Up Chile? Wal-Mart lowered its capital expenditure forecast while D&S, the leading supermarket chain in Chile, saw an unexpected 15% rise. Rumors are flying that D&S and Wal-Mart are making a deal, but Macke said it would be merely “pocket change” for the American retail giant.

New Casinos: CME Group (CME), Nymex (NMX), NYSE (NYX)

CME’s shares rose on the Justice Department’s approval of is Nymex acquisition. Terranova said NMX and NYX, the “new casino stocks,” are worth buying.

Solar Sets: MEMC Electronics (WFR)

The Senate rejected a bill that would give more tax breaks for alternative energy development. While Najarian says the move is “absolutely nuts,” he is unfazed, since the bulk of the solar business is overseas, and would buy the dip in solar. Adami recommended MEMC.

Will Fedex (FDX) Deliver? Amazon (AMZN)

Amazon shares rose on Tuesday after an upgrade from a Goldman analyst who said the company could double its revenues. Guy Adami thinks Fed ex, which reports earnings Wednesday looks good on a valuation basis, while Najarian and Macke think it is too early to buy Fedex. JoeTerranova would buy Amazon instead.

Pfizer is Sick: Elan (ELN), Wyeth (WYE), Myriad Genetics (MYGN), Teva Pharmaceuticals (TEVA), Allergan (AGN), Pfizer (PFE), Merck (MRK)

Elan and Wyeth’s Alzheimer’s drug was shown to reverse the effects of Alzheimer’s in Phase II Studies. Najarian says this is good news for Elan and Wyeth but noted it was only a Phase II study and would look at Myriad, which has an Alzheimer’s treatment in Phase III. Teva’s Parkinson’s drug slowed the development of the disease in a Phase III trial and Allergan is perfecting an injectible drug to treat retinal inflammation. Najarian likes all of these stories. Guy Adami likes Pfizer’s balance sheet, but Macke commented every aspect of Pfizer and Merck “has been death.”

Tee Time: Callaway (ELY)

Callaway gave up its gains yesterday as Rocco Mediate lost to Tiger Woods. KeyBanc analyst Scott Hamann rates the stock as a “buy” since sales are not so bad. Half of its business is overseas, and Callaway is a global growth story, Hammann said.

Summer Brew: Molson Coors (TAP), Anheuser-Busch (BUD), Constellation Brands (STZ), Boston Beer (SAM),

Jeff Macke would buy beer stocks, particularly TAP and SAM as play on the penny-wise summer consumer. He would avoid wine stocks and Constellation Brands. Although Busch looks like it may be “bought by the Belgians” Macke says “there’s nothing wrong with that.”

Up the Cree (CREE), IBM (IBM)

Cree jumped on Tuesdays on a rumor of a takeover deal with IBM, but Cannacord Adams analyst Jonathan Dorsheimer says Cree is often the subject of such rumors and is currently overvalued.

Fast Messages: Citibank (C), Activision (ATVI), Tesoro (TSO), Microsoft (MSFT)

Najarian told one viewer he isn’t worried about Citi puts because they are “so deep in the money puts.” While Macke doesn’t think Activision is a takeover target, he does think it is best in the group. Joe Terranova told another viewer to avoid oil refiners, like Tesoro. Guy Adami recommended being long Microsoft.

Final Trade: Macke: Activision, Terranova: Burlington Northern (BNI), Najarian: Energy Conversion Devices (ENER)

Seeking Alpha is not affiliated with CNBC, or Fast Money

Comments

[madmilker:]

after the nice people of Chile red...oops! read this....
quote***In China, as elsewhere, we follow the Wal-Mart tradition of building our business one store and one customer at a time. We strive to provide our customers with friendly service and a wide selection of quality products at Every Day Low Prices. With each Wal-Mart store we bring advanced retail know-how to the local market. By fostering a healthy, competitive environment, we hope to constantly improve our business operations and customer service in order to contribute to the prosperity of the local economy.

Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. At Wal-Mart, we always work with our suppliers to grow together. In August 2007, Wal-Mart once again secured the top spot of the 2007 Supplier Satisfaction Survey conducted by Business Information of Shanghai. Additionally, Wal-Mart directly exports about US$9 billion from China every year. The export volume by third party suppliers is also estimated to be over US$9 billion.***end of quote!

2008 Jul 02 10:00 AM

[madmilker:]

People in America need to realize jus what got America in this shape..."cheap" yes so-call cheap items from a foreign land.

quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!

Now! if there be 182 country's making items for the world to buy and they have only 5% of the pie in China...duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there.... but with the "yuan" going up in value and the US dollar going down...all the foreign items that the American consumer buys thinking it is cheap has went up in price.

People...its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the "we the people" have to turn to the "second" largest employer in America(Uncle Sam) to sell "we the people" debt in order to get all them dollars back!

50 years ago a foreigner would had given their left nut for a US dollar or a Hershey's chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think "MADE IN AMERICA."

2008 Dec 20 11:41 AM