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Trade Tomorrow: Earnings Floodgates

Friday, 11 Apr 2008 | 6:32 PM ET

#1- TRADING TECH'S BIG WEEK

Google and other major Nasdaq names release earnings next week. Will news from the search giant mark a turnaround for tech?

Piper Jaffray Senior Research Analyst Gene Munster joins the panel for this conversation. Following is a summary of his main points.

What do you expect from tech?

Typically March is the most difficult month for tech, replies Munster. I’m expecting a difficult broader quarter. Remember the back half of the year is usually strong for tech so I recommend owning it when everyone else gets freaked out which is usually the late spring or summer.

How about Google specifically?

I’m anticipating a miss, says Munseter, but despite the numbers I think the stock will be going higher over the next few months. It seems to me that Google is kind of “running away with the internet.” At the end of the day everyone needs Google. I think it’s a buy ahead of earnings.

I’d buy after the earnings, but not before, counters Jon Najarian.

I’d rather own Intel than take a bet on Google, adds Jeff Macke.

Next Week's Trades #1
Discussing whether or not next week's earnings will mark a turnaround for tech, with the Fast Money crew.

Which tech titan are you buying before earnings next week? Tell us now. Answer the Charles Schwab Question of the Day.


Which tech titan are you buying before earnings next week? Tell us now. Answer the Charles Schwab Question of the Day.

#2 - DOES MERRILL NEED MONEY?

Merrill Lynch and the money-center banks report earnings next week. What will they reveal about the length of the credit crisis?

CNBC’s Charlie Gasparino joins the panel for this conversation. Following is a synopsis of what was said.

I’m expecting Merrill to report another $6.5 billion write-down as well as announce more job cuts, Gasparino says. It could be as much as 15% of their workforce.

Traders how would you play the financials going into next week?

Jeff Macke: I like Morgan (MS) and would avoid Lehman (LEH).

Guy Adami: I like US Bancorp (USB) and would avoid Lehman.

Tim Seymour: I like Merrill (MER) and would avoid Lehman.

Next Week's Trades #2
Debating whether or not Merrill Lynch needs money, with CNBC's Charlie Gasparino and the Fast Money team.

Jon Najarian: I like JP Morgan (JPM) and would avoid Wachovia (WB) because of recent options action.

#3 - FASTEN YOUR SEATBELT

After a relatively calm period the options market is pricing in heavy volatility for earnings next week. Following are some names that could move substantially.

Company Projected Move

IBM (IBM) 4.5% in either direction

Wells Fargo (WFC) 8% in either direction

Harley Davidson (HOG) 6.5% in either direction

There’s concern that IBM has significant exposure to the financial services industry, explains Jon Najarian.

Take profits into IBM earnings, counsels Guy Adami. If they miss I expect this stock will go down significantly.

Make a list of names you like and buy the dips, exclaims Jeff Macke. Look at Intel (INTC), Wal-Mart (WMT) or Microsoft (MSFT).


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Trader disclosure: On Apr. 11, 2008, 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 (INTC), (YHOO), (MSFT); Jon Najarian Owns (AAPL), (AMR), (FDX), (PDLI), (TSO); Jon Najarian Is Short (HOG), (IBM), (WB); Seymour Owns (AAPL), (CSCO), (MER), (MSFT), (TSO), (INTC); Seygem Asset Management Owns (TSM), (COP), (SSL), (EEV); GE Is The Parent Company Of CNBC

Piper Jaffray Received Non-Investment Bnking Comensation From (MCHX) In The Past 12 Months; Piper Jaffray Received Non-Investment Bnking Comensation From (SOHU) In The Past 12 Months; Piper Jaffray Is A Market Maker In (AAPL), (ADBE), (ADSK), (BIDU), (CHKP), (CNET), (GOOG), (MCHX), (MFE), (MOVE), (SINA), (SOHU), (SYMC), (VRSN), (YHOO)

  Price   Change %Change
INTC
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MSFT
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HOG
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WFC
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IBM
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JPM MLP ETN
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MS
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WMT
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GOOGL
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