Dow Jumps 261
FINANCIALS FIGHT BACK
The headline: Financials Shake Off CIT Group Troubles To End Week with Big Bounce
The Fed and government policy makers are finally working together to address the problems. That revelation had everything to do with Thursday’s rally, according to Tim Seymour.
The Fed did, indeed, change the rules this week. It was the central bank’s actions that led to this unwinding of the dollar, financials and commodities shorts, said Jeff Macke. He thinks that trend will continue into the immediate future.
And the late news that the investment banks have been making use of the discount window – borrowing $29 billion as of Wednesday to sop up some of that illiquid paper – was greeted as great news, whereas in the old days it would have been the opposite.
COMMODITIES’ WORST WEEK IN 50 YEARS
The headline: Reuters/Jefferies Commodity Index Suffers Worst Weekly Loss Since 1956; Gold Suffers Worst Week Since 1990; Oil Falls Below $100; Dollar Rallies
Guy Adami has never been one to buy the “gold as a commodity” line. He called gold a speculator’s instrument that’s contingent on the dollar.
Not all commodities are overdone, according to Pete Najarian. He is still a buyer of some miners and coal.
The headline: Are the Agriculture Stocks Still Fertile Plays amid the Commodity Destruction This Week?
Yes, at least as far as Tim Seymour is concerned. They have pricing power and global demand is still very strong. In addition to POT, AGU and MOS, Tim would own the iron ore names like Vale and BHP Billiton . Guy Adami gave his blessing to owning Joy Global down to $60.
Tim is also bullish on fertilizer plays like Potash and Mosaic . The commodities plunge is not simply a reaction to the dollar, he stressed. It's about risk finally coming off the table.
OVER THE WAL
The headline: Wal-Mart Shares Breaking Out After Two Years of Resistance
After spending literally a decade in the penalty box, Wal-Mart looks like it’s back, according to Jeff Macke. WMT is a buy and will continue to work, he said.
WHALE WATCHING: JIM ROGERS
The headline: Hedge Fund Legend Jim Rogers Investing in Taiwan on Hopes of Better Relations with China
Tim Seymour said this is a good move. The poltical situation there will eventually create some sort of merger between the Taiwanese and Chinese economies. But this also shows that not all Asian economies are entirely tied to China. Many of them, including Taiwan, have their own stories that work.
The headline:Clear Channel Deal in Doubt as Private-Equity Firms, Banks Squabble: WSJ
Options activity suggests the opposite to Pete Najarian. The upside calls indicate to him that the deal is getting closer.
The headline:FedEx Finishes Flat after Cutting Forecast for Third Time in 12 Months
FedEx went up on bad news. That is an “incredible” tell about the strength of the company, said Jeff Macke.
Guy Adami thinks it looks cheap. He would look into Ryder as well.
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Trader disclosure: On Mar. 20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Najarian Owns (LEH) Puts, (AA) Calls, (MSFT), (AAPL), (C), (CSCO), (MS), (USB) Puts, (XLF), (YHOO); Macke Owns (YHOO), (DIS), (INTC); Seymour Owns (MER), (AAPL), (CSCO), (F), (HAL), (INTC), (MBI); Seygem Asset Management Owns (EWT), (CPA), (EEM)