Recap of CNBC's Fast Money, Tuesday August 26.
Markets Quiet - Freddie Mac (FRE), Fannie Mae (FNM)
Melissa Lee hosted “Fast Money” on Tuesday. She began by noting that the market was “fairly quiet” as the major indices all closed essentially flat for the day. Lee also mentioned that Freddie Mac and Fannie Mae “continued to rise.” Jon Najarian commented on why Freddie Mac and Fannie Mae moved up today. He said the move upward has to do with Goldman Sachs making some positive comments on both of the companies before the market opened. Regarding the overall market, Quint Tatro said, “It's a tough tape to do much; that is why you should wait on the sidelines.”
Breaking News - Eli Lilly (LLY), Amylin Pharmaceuticals (AMLN)
Mike Huckman, pharmaceutical reporter of CNBC, came on the show with some breaking news on Eli Lilly and Amylin Pharmaceuticals. Huckman said that Eli Lilly and Amylin were currently holding a conference where it was announced that there was four additional deaths among people in a study for the drug Byetta. However, both Eli Lilly and Amylin stated that they do not believe the deaths are directly attributable to Byetta. Adami said “I think you got to buy it” if Eli Lilly trends down to $45 a share.
Adami likes the defense sector, most specifically Boeing and Lockheed Martin. He said he likes Lockheed more than Boeing, since in his opinion there is more upside potential with the stock.
Dollar, Gold etc. - Freeport-McMoRan (FCX)
Adami said he feels the dollar will continue to rise. He mention that he feels “Europe is very weak” and will have to lower interest rates soon to help its economy. That, in turn, will only strengthen the dollar even more. Adami went on to speak about the dollar trade vis-a-vis gold. He said that as the dollar strengthens, gold will continue to trend downward. He said you can benefit from this, since investors seem to sell off Freeport-McMoRan as the dollar weakens. Therefore if gold weakens further and Freeport drops a bit, investors should consider buying Freeport-McMoRan.
Afterward, Adami continued with stocks he likes such as Schlumberger and Halliburton. He said he feels Schlumberger can go as high as $100 in the near future.
Chart of the Day was NYSE volume. Lee showed how the volume in the New York Stock Exchange has been drying up.
Najarian said he had a position in Rambus but since the stock was up 8%, he sold off his shares. He cautions investors to not “overstay your welcome” in stocks with the way the markets have been performing.
Lee mentioned that J. Crew is down 8% in after hours trading to $24.48 after it lowered its full-year outlook. Adami said “J. Crew did not say anything good” regarding its future outlook. He said eventually the company will start operating more efficiently, like the Gap has proved in its latest earning results, but said “you can't look at it yet.”
Tatro mentioned that Big Lots reported good earnings and was up nicely today before selling off toward the close.
Bang for the Buck - Jet Blue (JBLU)
Jim Iuorio, director of TJM Institutional, came on the show discussing his views on the direction of the U.S. dollar. He said “the rally is here to stay.” He then went on to say how he feels domestic airlines as well as Jet Blue will benefit from the dollar's upward movement.
Lee mentioned how Mattel won $100 million in damages over its Bratz case, but the stock is down after-hours by 2% to $19.95.
Will we ever see a bottom in financials? TFS Financial (TFSL)
Anton Schutz, portfolio manger of Burnham Asset Management, came on the program and said, “I think we hit the bottom” in financials. He sees some great opportunities within the financial sector such as TFS Financial and American Capital Agency.
A Look – Google (GOOG)
Terranova pointed out how Google has been trending downward these past few months on low volume. He was once long the stock but sold out his position last week, but he said, “I'm not suggesting you short the stock.” He does say that with the stock trading downward, it only proves how the market is “risk-averse” right now. Adami feels Google is “worth a look.” He says the stock is cheap relative to its peers and feels “people will pile back in when the market turns around,” which he feels will be sooner rather than later.
Najarian said he finds Bare Essentials “interesting at $12.” The company is in the business of cosmetics, yet he does not feel consumers will turn to generic brands -- investors fear consumers would switch to generic brands to save money during these difficult times. Adami said he likes a competitor of Bare Essentials, Avon Products. Tatro likes Avon as well and says “to have a stop at $41.”
A Big Little Stock - MGIC Investment Corp (MTG)
Najarian suggested a small-cap stock for investors to consider buying, MGIC Investment Corp. He said “I do like this stock at this level” especially when the stock is down 90%. In addition, he said “I like the space” it operates in but warns he is concerned about Warren Buffett competing with the likes of MGIC Investment. Overall, he remains bullish on the stock, since he feels it has some upward promise.
Financials Hand Investors Their …
Tatro said for investors to avoid buying the financials just because of the dividend yield. He said “investors have been buying financials for the past few months on the basis of the dividend yield and have had their butts handed to them.” He said to remember that the “dividend yield can increase as the stocks get lower” -- suggesting just because it has a high yield, that does not mean the stock cannot continue to go down.
Final Trade – Your First Move for Wednesday August 26.
Quint Tatro recommends iShares China Index (FXI).Najarian likes long United States Natural Gas Fund (PTEN).Guy Adami recommends buying Exxon Mobil (XOM).