Pro: Housing stocks are a 'screaming buy'

Friday, 6 Sep 2013 | 6:15 PM ET
Jobs number going to sway Fed?
Dissecting the day's major business news, with the "Fast Money" traders; and might the Fed time taper differently after today's jobs data? Dan Greenhaus, BTIG, weighs in.

After a wildly volatile trading session, U.S. stocks managed to end flat on Friday, following the monthly government jobs report and amid ongoing jitters over Syria. Still, the Dow snapped a four-week losing streak.

Stocks initially opened higher following the nonfarm payrolls report, but quickly tumbled near session lows after Dow Jones quoted Russian President Vladimir Putin as saying that Russia would continue arms sales and aid to Syria, even in the event of an external attack. Major averages eventually rebounded, with the Dow hitting 15,000, as President Barack Obama eased immediate fears over Syria in his latest press conference from the G20 meeting.

However, the rally eventually faded in the final hour of trading. Overall, the Dow fluctuated in a wide 220-point range.

"I think what you've got here is two weeks' worth of Syria talk that has given the markets a reason to pullback and consolidate what's been a really good year, but the year is not over," said James Lebenthal, president of Lebenthal Asset Management. "Syria will be done with in a couple of weeks. There's no way that Russia and the U.S. are going to war over Syria. That's crazy talk. It's not going to happen."

In turn, Lebenthal said market declines have set up investors to get fully invested. He likes cyclical stocks, but didn't name any in particular.

Adam Jeffery | CNBC

Steve Grasso, director of institutional sales at Stuart Frankel, thinks traders should consider buying stocks here. Grasso called the housing stocks "a screaming buy" because if the Federal Reserve begins to taper its bond-buying program next week, he thinks it will be a non-event and not large in mortgage-backed securities.

"I think Treasurys will see the taper, even if it's light, but I don't think you're going to see it in MBS," Grasso said, adding he likes home improvement retailer Home Depot and homebuilder D.R. Horton at current levels.

"I don't think they do any MBS. The housing market is too important," echoed pro trader Brian Kelly, who agreed with Grasso that the housing stocks are good for a trade.

Kelly thinks traders can buy bonds and stocks until the Fed's upcoming Federal Open Market Committee meeting, but recommended using caution afterward.

For his part, pro trader Guy Adami doesn't like the housing market. He doesn't even think it's in the midst of a recovery. However, he recommends considering the SPDR S&P Homebuilders exchange-traded fund with a stop at the $28 level.

—By CNBC's Drew Sandholm. Follow him on Twitter @DrewSandholm

  Price   Change %Change


Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report