BIGGEST DROP IN A MONTH
The headline: S&P 500, Nasdaq Fall 2% as Oil Hits Record
The Dow retreated Wednesday as the price of a barrel of oil soared to a record near $124 and touched off concerns that recent gains in stocks might have been premature while consumers grapple with rising energy and food costs.
The market was overbought and looking for an excuse to sell, Guy Adami said. Cisco gave it that excuse. He thinks the rest of the week is in the red as we enter a pullback cycle, but things should be back up by next Wednesday.
This is just a “pause and refresh,” according to Jeff Macke.
BARRELING PAST $123
The headline: Crude Oil Jumps 1.4% to $123.53, New Record Even After Report Shows Stockpiles Rose More Than Expected
The crude thesis is getting a little tired, making new records almost every day now. How about natural gas? That commodity is ripping too, already up 41% this year as it plays a game of catch up to oil.
Karen Finerman said she’s not willing to chase nat gas up here but certainly wouldn’t short it, either.
BANKS TUMBLE ON NEW RULES
The headline: Bank Shares Fall After SEC Requires Greater Disclosure of Their Financial Standing
When SEC Chairman Christopher Cox made this announcement, the financials immediately rolled over. It was the excuse to sell, Karen Finerman said. As an investor, she isn’t even sure what she would do with more disclosures.
This won’t make anything better, Jeff Macke said. The market hates intervention of any kind.
CISCO PUSHES TECH LOWER
The headline:Cisco Falls After Q4 Revenue Forecast Disappoints Some Investors
Guy Adami would buy the dip in Cisco, saying it’s “fine.” But Pete Najarian one-upped him, calling the stock “better than fine.” He took some of his CSCO position off but said he will get back in soon. It’s just the pressure of the market taking this great stock lower, he said.
SEMI CHARMED SECTOR
The headline: Semiconductor ETF Rebounding This Year, Up 13% Over Last 3 Months
The semis are benefiting from this global wireless buildout, Pete Najarian said. The SMH chart is bullish, and Jeff Macke would be buying dips in certain semi names.
WONDERFUL WORLD HERE
The headline: Disney Surging in Tough Tape After Stronger-Than-Expected Earnings Driven by Strong Performance at Theme parks, Networks
Disney is a stock you buy and put away as a long-term investment. At least that’s how Jeff Macke views his position in the Mouse House. He called Bob Iger a great manager and strongly recommended buying dips in DIS and then holding on as it goes higher.
CRIME DOES PAY
The headline: Take Two’s ‘Grand Theft Auto 4’ Takes in $500M in First Week, Topping Estimates
GTA’s stellar numbers are baked into the stock, Pete Najarian said. That’s why it’s not going higher – although it’s still a good buy.
CRUDE’S RELENTLESS RISE
The headline: Oil Surges Even as Dollar Gains Against Euro; When Will the Relentless Rise Come to an End?
Strategic investor Dennis Gartman, author of The Gartman Letter, reiterated that the oil run is now purely a demand-driven situation. We just can’t create supply fast enough, and that overcomes any domestic economic weakness that would normally signal a drop in oil prices.
Oil is in a bull market, Gartman said. And there’s only three positions for a bull market: neutral, long or really long. He’s staying neutral.
Perhaps the most surprising characteristic of this recent run to $123 is that the dollar has managed to strengthen too (also pushing gold lower). That is completely antithetical to the long crude/short dollar trade of the past few months and it’s catching the oil bears off guard. Gartman would no longer assume that a strong dollar means weak crude or vice versa. The rules have changed.
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Trader disclosure: On May 7, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (C), (GS), (INTC), (MSFT), (AGU), (NUE), (BTU); Pete Najarian owns (AAPL), (C) Calls, (ENER), (MSFT) Calls, (TSO), (XLF), (YHOO) Calls; Macke Owns (INTC), (DIS0, (ATVI), (MSFT); Finerman’s Firm is Short (IYR), (IJR), (SPY), (MDY), (IWM), Owns SPX Index Puts, (AEO), (MSFT), (NYX), (PLCE), (TSO), (VLO), (YHOO) and (YHOO) Call Spreads, Finerman Owns (GS), Finerman and Finerman’s Firm Own (C)
Gartman Owns (SJT)
Gartman Owns (FTK)
CIBC Gartman Index Owns Natural Gas And Is Short Crude Oil