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Middle East Bails Out Citi

Tuesday, 27 Nov 2007 | 7:02 PM ET

MIDDLE EAST BAILS OUT CITI:

The headline:Citigroup (C), Country’s Largest Bank, Gets $7.5B Capital Infusion from Abu Dhabi; 4.9% Stake Makes Abu Dhabi One of Citi’s Top Shareholders

The fact that the stake was for 4.9% is important, Karen Finerman said. It means neither side has to make a 13-D disclosure, keeping the process simpler. Karen’s bank of choice is Barclays (BCS), because it proved it was “comfortable” in talking about its guidance. Perhaps one of the only financials to do so.

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The Citi news shows that at least a little of the nervousness is gone, Pete Najarian said. It gives the bank some much-needed liquidity and calm. Don’t be surprised to see Abu Dhabi buy even more if the stock goes lower, Pete said.

Guy Adami called the move a “good first step” in restoring some order to the plagued banking sector. The last shoe still probably hasn’t dropped, he said, but this is a start in getting some normalcy back.

  Price   Change %Change
LR
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SC0Y
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FREDDIE MAC CUTS DIVIDEND:

The headline:Freddie (FRE) Cuts Quarterly Dividend in Half to $.025 From $0.50

Usually, this news would be negative, Karen Finerman said. But since Freddie’s market value has been halved and its yield had gone way up, the lowered dividend could actually be construed as positive news. It’s another “piece of the mosaic” that, along with Citigroup, might be starting to reveal a bottom. It’s far from an absolute bottom, Karen said, but it looks like things are starting to head that way.

Jeff Macke, sticking to his guns, advised investors to simply “walk away” from the financials. Don’t bet the Financial ETF (XLF) has bottomed unless you’re doing it with someone else’s money, he said.

RETAIL RELIEF RALLY:

The headline:
Retail Shares Rebound From Black Friday Blues After Dismal Showing Monday

Jeff Macke: Costco (COST) is best-of-breed.

Guy Adami: Buy Citi Trends (CTRN) as a short-term trading vehicle only.

Karen Finerman: Stick with Wal-Mart (WMT) through the holidays.

  Price   Change %Change
COST
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CTRN
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WMT
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OIL FALLS FURTHER FROM $100:

The headline: Crude Oil Slides 3.4% on Growing Expectations OPEC Will Raise Production

A stabilizing U.S. dollar is the key to commodity prices, according to Guy Adami. The dollar premium in oil is so high that crude could go to $85 in a hurry if the dollar steadied itself somewhat.

  Price   Change %Change
MV OIL SVCS
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VIVA VIAGRA MAKER:

The headline:Pfizer (PFE) Shares Jump 2%, Rebounding From 52-Week Low

Big Pharma had been performing without Pfizer. Now PFE has jumped on board, Pete Najarian said. But don’t look for big things out of the stock until the company makes some acquisitions to shore up that bone-dry pipeline.

  Price   Change %Change
PFE
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Trader disclosure: On Nov. 26, 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 (ATVI), (YHOO), (EMC), (INTC); Najarian Owns (AMZN) Options, (EMC) Options, (YHOO) Options; Finerman's Firm And Finerman Own (GS); Finerman's Firm Owns (NYX), (TSO), (YHOO), (WMT), (AEO); Finerman's Firm Owns (MSFT) Options, (NMX) Options, (BIIB) Options; Finerman's Firm Owns SPX Index Puts; Finerman's Firm Is Short (SPY), (IYR), (IJR), (MDY),(IWM), (LEN); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; NBC Universal Is The Parent Company of CNBC

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  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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