Recap of CNBC's TV program Fast Money, Tuesday March 18. Click on a stock ticker for more analysis.
Najarian noted that steel, rails and coal were buoyed up by the rally and reported the volatility index also moved sharply. He would invest with caution after such a dramatic upswing. Jeff Macke says the Fed thinks inflation is growing but not dramatically. He commented the central bank will protect the credit markets. Macke added JPM’s takeover of BSC was very bullish. Tim Seymour didn’t think the Fed’s action caused the rally, but noticed signs before the announcement and said the dollar’s climb and sale of Treasury bonds were indicative of a bottom. Guy Adami doesn’t think it pays to short stocks, but would buy on declines. He isn’t worried about liquidity and would look at MER. He also likes GS up to $190. Seymour reported GS said the worst part of the crisis is over and the recession could be finished by the latter part of 2008. Macke said taking gains off the rally is a smart move, and would buy on dips. Although he is bullish on financials now, that could alter rapidly. Adami is also bullish on financials. Najarian disagreed and said financials went up too high on Tuesday to consider buying.
Adami suggested caution before buying Visa’s IPO and would watch how it trades before being bullish. MA might gain a few points, but Adami says there is no reason to hurry. Macke pointed out the Visa is a known quantity and “This isn’t a Netscape IPO.” The group received the news that the Visa IPO’s price is at $44, higher than expected, which indicates keen demand. Macke expects JPM to profit from Visa, and Najarian is a fan of the stock.
Morgan Stanley’s (NYSE:MS) Earnings, Bear Stearns (NYSE:BSC) Adami predicted an upside surprise for MS after earnings on Wednesday, agreeing with GS decision to put the bank on its conviction buy list. Najarian sees a 10% rise for Morgan Stanley, since it benefits from Bear’s demise. He would sell into the good news. Bear’s stock doubled and then declined as rumors of lawsuits arose. Adami believes the shorts were covering, but litigation might mean more value for Bear’s collateralized debt obligations. Macke thinks a lawsuit would create an upside for bear. Adami recommended buying BSC as a lottery ticket.
FXI has experienced a pullback on discussion of inflation in China. Tim Seymour likes FXI at the current price and he also likes CHL.
Adami sees more liquidity for the markets with the rate cut and Adami says USB is the best of breed among the banks, since it lack subprime problems and has remained steady during the housing crisis. In addition to local banks, Seymour would look at FNM, FRE and SLM.
Concerning the general market, Macke sees bullishness for the short term, but for the long term, “The sun is going to blowup and we’re all going to die.” Until then, there will be a “heck of a long trade” and likes WMT. Najarian said there was strong option and put activity in BBBY. NKE is a “must-own” stock into the Beijing summer Olympics, said Macke. Seymour likes Nike’s margins, but is concerned about manufacturing inflation in China. Adami would take a look at stock buybacks. Najarian sees strength in DKS as boding well for NKE which he calls best-of-breed.
Fredrico said the bond insurer will thrive with more liquidity in the market and should take market share from beleaguered ABK and MBI. Najarian said he is bullish.
Trader Radar: GameStop (NYSE:GSE) traded at unusual trading volume on Tuesday.
Dan Fitzpatrick RealMoney.com with Google (NASDAQ:GOOG)
Fitzpatrick remarked that rapid highs and lows in the volatility index correlate with a major upside. The S & P 500 has fallen below its moving average and will return to prior levels. He is bullish on Google.
Fast Messages: Deere (NYSE:DE), Caterpillar
Adami says steel’s pricing power and relatively low stock prices are indicate an upside in the sector more strongly than the Fed cut. Najarian said the call activity in DE is good, particularly after good news from CAT.
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