They Wanted to Sell Financials - Fast Money Recap (8/6/08)

Recap of CNBC's Fast Money, Wednesday, August 6.

They Wanted to Sell Financials – Freddie Mac (FRE), Merrill Lynch (MER)

The traders spoke about today's stock market performance, specifically the S&P 500. The Doa rebounded from a 90 point loss after a much worse than expected loss from Freddie Mac. U.S. stocks hit a six-week high. The trend of health & personal care stocks doing well in this market continues. Discussing Freddie Mac Finerman said that she doesn't “really get what's going on,” and that she does not understand. Macke said that she could be the CEO of Freddie Mac because he doesn't know what's going on either. Guy Adami said that he believes the “bottom is in for the short term” for markets and investors “wanted to sell financials today. They wanted to sell Merill Lynch, and they didn't do it.” said Adami.  He said that Merrill Lynch closed at around $28.50. Jeff Macke said with Freddie Mac's news today, there were “plenty of excuses to sell them [financials].” He said that he was not really a bull. Karen Finerman said she was not really a bull either and that right now there is “a lot of noise going on,” and “a lot of different things going on.”

Consumer Discretionary StocksResearch in Motion (RIMM)

Joe Terranova weighed in saying “I liked what I saw today,” and consumer discretionary stocks were rallying Wednesday. He said look at Research in Motion.

Techs Today - Microsoft (MSFT), Yahoo! (YHOO)

A top UBS analyst expects a massive Microsoft $20 billion share buyback could be completed soon. Finerman said, “I wouldn't buy it” based upon expectation of a buyback as she feels the buyback “would close the door on a Yahoo deal,” and believes that Microsoft isn't ready to do that yet.  She said that although it has had nice moves in the past two days, it has had horrible moves in the past two months. Terranova remarked that he felt tech stocks had “nice news,” and technology is the “environment to be in.” He said that tech went through its malaise in the beginning of the decade.

On to Oil - Valero (VLO), Exxon Mobil (XOM), ConocoPhillips (COP), Petrobras Energia (PZE)

As oil entered bear market territory, Terranova said that he has “absolutely nothing in oil,” and that there are plays in equity. He is long Valero and other integrated names are attractive to him. Adami stepped in and suggested Exxon Mobil and ConocoPhillips at current levels. He said “I think you can buy Exxon right now.” Finerman said she was “long some of these refiners,” and Macke warned that these stocks “have a lot to prove from a stock perspective.” He said he is not sure of their strategy for the next generation and that is a concern. Terranova said, “"I think their earnings are spectacular,” and oil below $120 is not sustainable. He suggested taking a look into Petrobras Energia and ConocoPhillips.

Brad Hintz on Merrill Lynch

Brad Hintz of Sanford Bernstein came on to speak on Merrill. Hintz said that “fundamentally, Thain's hands are tied,” and that he has no choice but to cut Merrill's dividend. He said that the sign when Merrill is back will be “when Thain cuts the dividend.” Hintz continued, saying that “we've got a marketperform on Merrill,” and that he is not enthusiastic on the stock.

Retail Names - Abercrombie & Fitch (ANF), Wal-Mart (WMT)

Talking about July sales figures and retail names, Finerman said, "I think it is not going to be horrific," because the bar is set low already. She said that jeans are doing well and that “Abercrombie and Fitch is one of them.” Adami replied saying in Abercrombie and Fitch, there is “big short interest in this one.” Macke said he is not ditching Wal-Mart. He said, “I am not worried people bought Wal-Mart 20 years ago and are selling into that.” Macke predicts the July retail sales data will be “absolutely hideous.”

Earnings Disappoint - American International Group (AIG)

American International Group reported a quarterly loss of 51 cents a share, falling far short of analysts' estimates, which had projected a profit for the company. Revenue fell far short of even the low analysts estimates at $19.9 billion. Adami said that “these guys crushed for years,” but they are similar to Merrill. Dylan Ratigan pointed out the stock has lost already 47% of its value this year. Terranova said that his hope is that the new CEO gives complete disclosure, because then “I'd be interested.”  Macke said that its earnings today were “noisy numbers,” and it missed revenue by one-third. He said it needs more explanation because it missed by that much. Finerman said she “wouldn't be a buyer,” of this kind of stock.

Market Technician

Katie Stockton, a market technician of MKM Partners, stopped by the show to discuss the markets. Speaking on the S&P 500, she said that it can return to the 1375 area because the stock saw resistance in May. Moving on to the Russell 2000, Stockton said that “we're not as overbought in here,” and informed investors to wait for breakouts to be confirmed. She said to look at Energy because she believes a pull back will give way to another up move because the “uptrend is still intact.”

A Good Trade - Dell (DELL)

Changing gears, Adami spoke on Dell and mentioned that it may be a good trade because the ugly duckling could turn into a swan. He said that there has been “cost cutting,” and that they are “ahead of schedule.” Adami continued, saying that it seems they are “doing things a lot better,” and that he likes it and to wait for a pullback.

Final Trade – Your First Move for Thursday August 7.

Jeff Mackeis taking Walmart (WMT) off the table.

Karen Finerman’s passed on the opportunity.

Terranova Was in favor of US Steel  (X).

Guy Adami said Abercrombie & Fitch (ANF).

 

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Comments

[kkin365:]

Excellent summary. Minor suggestion: eliminate unnecesary introductory phraseology to streamline presentation, allowing readers to spend less time reading this valuable service.

2008 Aug 07 09:27 AM

[Norman Lepo...:]

These people are starting to look like Cramer every day. This is a bad sign, in my opinion.

2008 Aug 07 10:03 AM