Fast Money Recap - Will Oprah's Favorite Gadget Save Amazon? (1/28/09)

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Includes: AABA, AMZN, BAC, FCX, HAL, HPQ, MSFT, PFE, SLB, STT, TBT, VALE, VOD, WFC
by: Miriam Metzinger

Recap of CNBC's Fast Money, Tuesday January 28.

Will Oprah’s Favorite Gadget Save Amazon (NASDAQ:AMZN)?

Oprah’s new gadget is set to be the “next big thing” and may spell good news for Amazon. The Kindle is a hand-held device that gives instant access to over 190,000 books, blogs and newspapers. It was the best-selling gadget on Amazon and is expected to generate $1 billion in revenues for the company by 2010. However, some find Amazon’s enthusiasm a bit suspicious. The top internet retailer said holiday sales were the “best ever” in a season that was the “worst ever” for other companies. Amazon has not yet released numbers to verify this claim. Mark Mahaney predicted last summer the Kindle would be good for Amazon, but thinks Amazon’s numbers could disappoint; “I’m not a bull on Amazon, but I’m a bull on Kindle.”


The Street Abuzz about the Bad Bank: Bank of America (NYSE:BAC), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), State Street (NYSE:STT)

The financial sector rallied on news the government is going to establish a “bad bank” to deal with the bad assets of financial institutions. But Fast Money guest Paul Miller of FBR Capital Markets thinks the bad bank business is just “a lot of noise” and the rally is just temporary short-covering; “When the details come out I think the market will be disappointed. Nobody knows the pricing.” Miller would get out of all banks and finds nothing attractive about the sector. Guy Adami suggested getting rid of State Street, but thinks Bank of America may go higher.

Obama Lift

The market was up for the fourth consecutive day and Guy Adami feels there could be a fifth. Karen Finerman thinks investors are becoming more comfortable with risk but feels there are a lot of unanswered questions about the “bad bank” solution, such as how the assets are going to be priced. Karen commented that every reaction in the past has been a selling opportunity. Jeff Macke is absolutely unimpressed with Obama’s “bad bank” plan, because the taxpayers are going to be the ones to pick up the bill; “Obama’s plan is the worst plan I’ve ever heard. We are being screwed so bad.”

Yahoo (YHOO) Surprises: Hewlett Packard (NYSE:HPQ), Microsoft (NASDAQ:MSFT), Vodafone (NASDAQ:VOD)

Yahoo brought the tech sector up after beating very low expectations with its earnings. Macke thinks the cause for the rally was that bad news was already baked into tech stocks. Guy Adami would buy Hewlet Packard and Tim Seymour likes Vodafone as a wireless emerging markets play.

Oil Prices Rise: Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB), Vale (NYSE:RIO), Freeport McMoRan (NYSE:FCX)

Oil prices rose on declining U.S. inventories and OPEC’s statements about cutting supply. Guy Adami would look at Halliburton and Schlumberger. Karen Finerman remarked oil services equities are performing well because they have strong cash flows. However, Macke would take gains. Tim Seymour likes Freeport and Vale.

The ProShares Ultrashort Lehman 20+ Yr. ETF (NYSEARCA:TBT)

TBT rose after the government announced it hasn’t bought T-Bills. While Finerman admits it is a volatile trade, she says she will hold it. Jeff Macke suggested caution, especially since it is double-levered.

Pfff to Pfizer (NYSE:PFE)

Pfizer continued to fall as investors questioned its acquisition of Wyeth.It’s interesting to me that banks can get out of the deal if Pfizer’s credit rating goes lower,” observes Guy Adami. Finerman thinks Pfizer will try hard to prevent that situation.

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