Recap of CNBC's Fast Money, Friday September 12.
Dylan Ratigan hosted the show and began discussing the amazing moves seen in financial stocks such as Lehman Brothers, American International Group and Washington Mutual this week. "The moves in these stocks have never been seen in the history of Wall Street," Ratigan said. Pete Najarian said the financial sector looked terrible, but the coal stocks, steel and everything commodity helped the S&P 500 today. Ratigan mentioned that S&P put American International Group's credit rating on negative watch. "Have they no sense of shame?" Jeff Macke said. He said S&P and Moody's have a lot of explaining to do. Tim Seymour said that AIG has a lot of balance sheet issues. Joe Terranova told viewers that he owns AIG puts. He also mentioned that AIG's credit default swaps will continue to move higher and that the CEO will have to come out with a plan for the company by Monday morning.
The Market Moves
Ratigan moved the discussion to the general stock market. Macke said the reason the indexes didn't look so bad was that previously beaten-down stocks moved higher. Terranova pointed out that the dollar was weak, and investors knew the commodity stocks would come on strong today and move the S&P up. Seymour said there are good valuation stories in the commodity complex. Macke explained that the dollar has rallied too far, too fast. "I would love to have stayed long the dollar forever, but if you give me 10% to 15%, I am taking it," he added.
Financial Exposure - General Electric (NYSE:GE)
Ratigan mentioned that General Electric has a lot of exposure to the financial sector. The stock fell 5% today. Seymour explained that 53% of GE's profits last year came from the financials, and that's why the stock is being hit so hard here. "I am getting sick of carrying GE with "Fast Money," Macke joked.
Ratigan brought up the fact that crude oil dropped below $100 today. Terranova said $100 oil lends to complacency among the American consumer. He said the only trade in the energy space is the refiners. Seymour said the consumer is dead.
Five Month Low – Apple (NASDAQ:AAPL)
Ratigan told viewers that Apple hit a five-month low today. Najarian explained that Steve Jobs looked a little bit thinner at their conference this week, and traders sold off the stock. He said he's long the stock but also holds puts for downside protection. "I blame the board of this company for creating a cult of personality around this stock -- and that's what it trades on now," Macke added.
Battered and Fried - Lehman Brothers (LEH)
Sanford Bernstein analyst Brad Hintz, who also is the former CFO of Lehman Brothers, joined the traders to discuss the battered investment bank. Hintz said he expects Lehman to open for business on Monday. He explained that it will be extremely challenging to do the due diligence on a $600 billion balance sheet in a quick manner. "Lehman doesn't have a funding problem; they can fund themselves," he said. Hintz said the problem is the "crisis of confidence" in the equity markets. He told viewers to avoid the brokerage stocks until you start seeing credit spreads coming in on investment grade.
The "Fast Money" traders discussed the following bullish developments for Main Street: the possibility of a housing bottom, the commodity price decline and the rally in the consumer stocks. Macke said he would add an activist government to the list. He says the U.S. government will give money to General Motors, and it's bullish for the stock. Najarian said he sees opportunity in Home Depot and Lowe's if the housing market is at a bottom. Terranova recommended Wal-Mart, the coal stocks and Research In Motion in technology. Seymour explained that commodity prices are going down because of demand destruction. He says job losses will get worse into the holidays, so he isn't aboard on the bullish case for Main Street.
The traders spoke with CNBC's Scott Cohn about the latest on Hurricane Ike. Cohn said this hurricane has the potential to be catastrophic in terms of economics and human loss. He said if the storm surge comes through the Houston ship channel, it will be a major impact to the country because of the refineries located in that area. "We will start seeing higher gas prices, and it's already happening here," Cohn said.
Goldman Coming - Goldman Sachs (NYSE:GS)
The traders discussed Goldman Sachs, which reports earnings next week. Terranova said that if it reports earnings south of $2, it will be in trouble, but if it reports north of $2, it would be seen as a positive for the market. Najarian is concerned about Goldman because of its exposure to the commodity complex.
Final Trade – Your First Move for Friday September 12.
Jeff Macke said to buy General Motors (GM) on dips.
Tim Seymour said go long iShares MSCI Emerging Markets Indx (NYSEARCA:EEM).
Joe Terranova likes Goldman Sachs (GS) ahead earnings.
Peter Najarian thinks Hologic (NASDAQ:HOLX) is a buy on unusual options action.
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