No.1 - Manly Rally
While the Dow reached new heights Tuesday, it also gave up a 100-point advance. However, the industries of men held strong. Railroads...coal burners... and power generators have and continue to drive this market higher.
What's behind this rally in the old economy, manly names? And are they the best way to play this bull market, which at times seems like it is running out of steam?
Eric Bolling says demand for power increases 2% – 3% a year. “We can generate it, but we can’t get the power to the people.” Consequently Eric is bullish on the energy sector and tells investors stick with what’s working.
He says the Utilities SPDR (XLU) is up 16% year to date. In the coal space, Peabody (BTU) is up 27% and Arch Coal (ACI) is up 30% YTD. In the nuclear space Cameco (CCJ) is up 25% and USEC inc. (USU) is up 85% YTD.
Tim Strazzini prefers the railroads because they have pricing power and there’s increased demand for transporting goods. He expects the cash flows of the railroads to become higher quality and says Wall Street will pay a higher price for these stocks.
Jeff Macke agrees and adds the railroads are sitting on a lot of financial resources that they haven’t capitalized.
Guy Adami expects Wabtec (WAB) to do well because they service rail cars.
Dylan Ratigan asks if investors should worry about a market where there’s deterioration in many sectors while large caps drive the rallies.
Eric Bolling explains that’s exactly what happened Tuesday. He suggests the market might top out and he’s looking for a correction. But he adds he’s not bearish, it’s just a correction.
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Trader disclosure: On May 15, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders
Macke Owns (SWY), (JWN);Strazzini Owns (WMT) (NWS-A), (SNDK), Strazzini Is Short (MU); Bolling Owns (DIS), Gold, Silver, Coffee, Sugar; Bolling Is Short S&P Futures; Bolling Is Short Nasdaq Futures NBC Universal Is The Parent Company Of CNBC