Recap of Fast Money, Thursday June 19.
Exxon (NYSE:XOM), U.S. Oil Fund (NYSEARCA:USO)
The Dow advanced with a slight drop in oil prices, thanks partialy to China announcing it will raise caps on gas and diesel fuel prices. Joe Terranova says Chinese demand has been a crucial factor in oil's rise and thinks now is the time to get out of USO and into integrated oils. Guy Adami predicts oil is going to drop $10 or $15 and would beware of XOM. Macke didn't see the need to call a top and said oil is going up. He is bullish on USO.
Financials are on the rebound although there were rumors of a second quarter writedown for Citi, and WB is on the lookout for a new CEO. Terranova was impressed by the reversal in XLF, while Macke said financials could be bought. However, Najarian was not excited, and said the lift was merely short covering. Put buying activity indicates trouble brewing, he said, noting every day BAC goes a little bit lower.
Rotating to Tech: Apple (NASDAQ:AAPL), IBM (NYSE:IBM), Hewlett-Packard (NYSE:HPQ), Qualcom (NASDAQ:QCOM), Broadcom (NASDAQ:BRCM), Western Digital (NASDAQ:WDC), Research in Motion (RIMM), Juniper (NYSE:JNPR)
Apple rose 1% on record sales for iTunes, IBM reached a new outsourcing agreement with Ericsson and HPQ is consolidating its printer business. Adami thinks Microsoft should be higher and thinks there is a general rotation out of oil and into tech. He is bullish on Western Digital. Najarian discussed options activity in Juniper and would keep an eye on the stock. He also likes Broadcom and Qualcom.
Options Action: Sandridge (NYSE:SD)
Najarian says options action indicates this stock is headed higher.
Kirk Kerkorian increased his stake in Ford from 5.5% to 6.9%. Najarian thinks this is a good move, since Ford is building more fuel efficient cars and has less truck exposure than GM. Adami, however, thinks Kerkorian is just looking for his last hurrah and would buy F, but not because of Captain Kirk.
Nukes and Coal: KOL (NYSEARCA:KOL)
John McCain revealed his two-pronged solution to the energy problem: he is planning to use federal funds to develop clean coal and build more nuclear reactors. Najarian and Macke don't think America will embrace nuclear energy, and Terranova would buy KOL.
The group asked Susquehanna Market Strategist Stacey Gilbert if gold would head higher on inflation concerns or if it would drop to $900. While she noted heavy call buying, she thinks miners offer more growth and would buy KGC and ABX. She is also bullish on GLD.
The Saudi Party
David Kirsch, a former State Department energy official and energy consultant says investors should not hold their breath for dramatic results from the weekend meeting, during which the Saudis will probably say that cannot meet the production targets and are trying to avoid blame for rising oil prices. However, Kirsch thinks prices may drop, but only by the end of the year, to about $105-$120.Going Places: iShares Dow Jones Transport (NYSEARCA:IYT), Ryder (NYSE:R)
Both Najarian and Macke would ride the rise in transports, and Najarian says trucking is becoming more efficient. Guy Adami would buy rails on a pullback, and Terranova recommends IYT. Macke is bullish on Ryder.Dividend Trap: Pfizer (NYSE:PFE), Frontline (NYSE:FRO), San Juan Basin Royalty (NYSE:SJT), FPL Group (FPL-OLD), Consolidated Edison (NYSE:ED)
Dividends are a great way to make money while you wait for a stock to rise, but the group cautioned to avoid dividend traps, or companies that offer bigger dividends than they can sustain. To be on the safe side, said Adami, avoid stocks with a dividend yield greater than 10% and don't invest only for the yield. However, he noted Frontline has a 16% dividend and a solid story. Macke thinks Pfizer may "snakebite" people. Najarian likes SJT with a 6.6% dividend, as well as FPL and ED.Cheap Summer Fun: Wal-Mart (NYSE:WMT), Hasbro (NASDAQ:HAS), Jarden (NYSE:JAH)
Macke called this season the "summer of the staycation" and would invest in companies that provide summer fun in one's own backyard. Hasbro is benefiting from its classic "Slip N' Slide" while competitors are declining, and Wal-Mart is always a favorite. Macke noted Jarden owns Coleman, and the CEO is buying up shares.Fast & Furious: Apple, Sprint (NYSE:S), Winnebago (NYSE:WGO)
Four types of contracts expire Friday, but Najarian isn't worried. On Treasury Secretary Paulson's meeting with the G-8 to talk up the dollar, Terranova comments Paulson has made progress with the Chinese. Even though it has many of the features of Apple's iPhone and can stream live TV, Adami doesn't think Sprint's Instinct will beat the iPhone. Winnebago is expected to report a bad quarter on Friday, and given the fact it produces a gas guzzler, Macke is not surprised.
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