Financial Focus - Fast Money Recap (7/22/08)

by: Joan Wickham

Recap of CNBC's Fast Money, Tuesday July 22.

It was a wild day in stocks today, with a “big, strong finish to an otherwise unchanged market,” said host Dylan Ratigan on CNBC's Fast Money on Tuesday.

Karen Finerman said it was still “really short term,” however. Joe Terranova added that “volume was substantial” and that now “everyone is in the financial trades from the long side.” He did, however, caution to “be very careful and get above the lows we saw in March.” Jim Macke also agreed that it was a wild finish, saying that people “made their money in the last hour, making huge gains.”

Pete Najarian said “all the commodity names started getting hit, and when that rotation started, the financials began to take off.” Terranova added that “the energy story isn't over yet.” Finerman warned that we “could still see meaningful trouble ahead.” In describing the current state of the market, Macke said “it's bullish” and wondered how you could see it any other way. He believes the trend “is that clearly financials are long” and hastened to add that he's “out of oil completely and still long financials.” Staying with the talk of financials, Terranova noted that the “trend still looks down and has not reversed yet.” He also says financials will continue to be the story to close out 2008 and into 2009. 

Financial Focus: Washington Mutual (NYSE:WM), E-Trade (NYSE:ETR)

Focusing on specific companies, Najarian said Washington Mutual had made “a pretty big move right now” and was waiting to see if it would continue. He also liked E-Trade, stating that it was “doing a lot of things right like adding assets and customers.” He acknowledged that “tonight's earnings don't look so good,” but still says that “talking long term, you need to look at WaMu and E-Trade.”

Tech - To Buy or Not to Buy: Apple (NASDAQ:AAPL), Yahoo!(NASDAQ:YHOO), Microsoft (NASDAQ:MSFT)

The analysts then turned to tech, specifically stopping to discuss Apple. Macke said that “nothing fixed Apple's problems,” but Najarian disagreed, saying that you had to “have a look at the big picture.” He felt that “as the iPhone grows, it'll become a bigger piece” and that in the end it would be about the Mac sales.

Focusing more on tech was guest analyst Gene Munster of Piper Jaffray. He recommended buying Yahoo!, saying that it had “investor support to negotiate with Microsoft.” He also felt that “Microsoft needs Yahoo! in order to grow in the next 10 years.” Asked about Apple, Munster said he believes that if it “lowers the price of their products then the Street number will go up and the stock will go up.”

Pharmaceuticals:  Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY), Bristol-Myers Squibb (NYSE:BMY), S&P Biotech (NYSEARCA:XBI)

Joining the program next was another guest, Lehman Brothers pharmaceutical analyst Tony Butler. “There’s fear around the cholesterol market,” explains Lehman Brothers analyst Tony Butler and that “revenue growth hasn't done well for Pfizer,” despite the fact that it has cut costs. The study revealed that some people who took Vytorin later developed cancer although it wasn't clear if that was merely a coincidence. But coincidence of not, “we wondered if people would just throw their pills away,” Butler says. But they haven't. Does that make Merck a buy on the current dip?

“It’s a value play but I don’t know if Merck stock is going anywhere anytime soon,” replies Butler. “But I have a buy on Schering as a growth story,” he says. Looking ahead, can Pfizer or another drug maker revive the Big Pharma comeback? The key for Pfizer is revenue growth which I don’t think they do well,” replies Butler. They’ve been able to buy back shares but that won’t drive their stock. When asked about upcoming numbers, he was optimistic that “both Eli Lilly and Bristol-Myers Squibb likely have the best numbers.” Butler also advised to “lean toward Bristol over the next two days.” Closing out the segment, Najarian said he'd “love to see either generics or biotechs start jumping,” and Terranova finished by advising to “take a look at the S&P Biotech ticker today.” 

Airline Flying Today: JetBlue (NASDAQ:JBLU)

Noting that airlines had a huge day of gains, the show welcomed guest JetBlue CEO Dave Barger. Barger said that we were soon “going to see an industry that's much smaller” and commented on JetBlue's planned slowing of growth. Barger said they were planning to “be flat at best into 2009” but was hopeful in saying that “people are going to fly, even if fewer have the opportunity because of airfares moving higher.” He finished the interview by stressing that its plan “is one of organic growth and partnerships with strategic investors.” 

Final Trades – Wednesday’s First Moves


  • Macke said to sell AT&T (NYSE:T).
  • Terranova took gold futures.
  • Najarian took Wallmart (NYSE:WMT).


 Seeking Alpha is not affiliated with CNBC, or Fast Money