Oil Rebounds - Fast Money Recap (8/13/08)

Recap of CNBC's Fast Money, Wednesday August 13.

Financial Culprits - Lehman Brothers (LEH), Bank of America (BAC), HSBC (HBC), Deere (DE)

Dylan Ratigan said financials were “the culprit” in Wednesday's market downturn. Shares sold off on worries about the widening scope of mortgage losses, as well as disappointing earnings from Deere & Co. He mentioned Lehman Brothers and Bank of America were down big. Crude oil's also rebounded. Jeff Macke said “obviously the banks are not fixed.” He mentioned investors follow what he has been saying about financials -- to “sell into the big rallies and buy in the fear.” He said that with the market is down right now, it is almost at that fear moment where investors can safely accumulate shares. Tim Seymour is bearish on financials. “I shorted some banks,” one of those being HSBC. He does not see any reason for investors to be long. Jon Najarian says “it's a great time to be short financials.”

Crude Oil - Valero Energy (VAL), Anadarko (APC), XTO Energy (XTO), Devon (DVN), Rio Tinto (RTP), Freeport-McMoRan (FCX)

Joe Terranova said crude oil was down not because of the Russia-Georgia conflict but from the data released today. A government report showed unexpectedly large declines in crude and gasoline stockpiles in the latest week. The price of oil got too high and refiners backed off and stopped making product, explains Joe Terranova. We’re at our lowest levels since December 2007 and that’s what’s moving the market. I think the trade is long Valero Energy, but suggested to be very cautious: “If it doesn't move to the upside soon, sell it.” “I would look at Anadarko, XTO Energy and Devon says Tim Seymour. They’re independent domestic plays. Najarian mentioned there has been “lots of call-option buying” with XTO Energy. He said XTO buying is extreme. He advised investors to keep an eye on the stock. Najarian also mentioned how he's buying Rio Tinto and Freeport-McMoRan. He believes it is a great time to be buying these companies that have promising prospects.

Retail Selling Off - Macy's (M), Wal-Mart (WMT), Costco (COST)

Earnings from some of the nation’s largest retailers added to the downward pressure on stocks, Wednesday. Ratigan mentioned how retail names are moving to the downside such as Macy's which beat estimates but their forecast fell somewhat short. Macke said “the risk is to the downside for the retailers.” He believes the retailers will have a tough time meeting estimates and that will cause the stocks to drop further. As a result of the difficult market environment, Macke likes only the discounters -- Wal-Mart and Costco.

Apple of their Eye - Apple (AAPL)

Ratigan changed subjects and noted how Apple has been performing quite well this week. He showed a chart that reflected how the S&P 500 is essentially flat this week while Apple is up about 10%. Najarian loves Apple. He mentioned how he went to a few Apple Stores and found the iPhones are not only sold out, but there is a wait to get the them. As a result of the robust sales with its new iPhone 3G, Najarian believes the stock will continue to have strong earnings, making it a great buy at current levels. Terranova agreed with Najarian. He said he bought it today because the stock action suggests “something is going on that is making the stock is going higher.” He also said the technicals “look good.”

Najarian Picks - Applied Materials' (AMAT), Burger King (BKC), McDonald's (MCD)

Pete Najarian noted that Applied Materials' CEO mentioned that the company has reached bottom and sees a modest recovery. He also likes Burger King and believes it is in a position where it could potentially do better than McDonald's.

Financial News

Ratigan broke in with news that the Federal Trade Comission has released a statement stating those involved with manipulations in the markets will face high fines. William Fleckenstein, president of Fleckenstein Capital, said the problems in the financials will not go away anytime soon. He said there has been “too much leverage” and bad credit conditions, which will continue to weigh down the financial sector. Ratigan brought up the U.S. dollar rolling over during market hours. Seymour believes there is no reason to see the dollar bounce back to the upside unless investors take into account the weakness occurring abroad. Overall, he is bearish on the dollar.

Movers - Longs Drug Stores (LDG), Briggs Stratton (BGG), Exxon Mobil (XOM), Coca-Cola (KO)

Najarian brought up Longs Drug Stores which is up 30% to $70.46. He also noted that there were a lot of puts being bought in Briggs Stratton. He said investors should be leery of getting into the stock, since it will be reporting earning results Thursday. Ratigan ended the program letting watchers know a couple of stocks moving to the upside while the markets traded in negative territory: Exxon Mobil was up about 2% to $78.24 and Coca-Cola was up 1% to $55.29.

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Comments

[AREYOUKIDDING:]

You must believe that the average investor is a moron. Naked Short Selling is THE culprit here. The hedges have been waiting for this race to the bottom to begin for weeks now. I will not purchase another equity until Naked shorting is permanently illegal in this maket. If it isn't stopped soon our banking system will eventually collapse and the businesses they service will also fail. You will be able to buy shares for pennies on the dollar. Then I'll come back into the market provided that the current chairman of the SEC has been replaced.

2008 Aug 13 07:06 PM