OIL DROPS 4% ON WEEK
The headline: Crude Oil Sheds 3.7% This Week To Close At $127.35.
Oil prices rose to over $127 a barrel on Friday as a drop in the dollar drew in investors seeking to hedge against the weaker greenback. However it was Thursday's $4 drop that suggested to some analysts that the bullish momentum which had pushed prices over $135 as recently as one week ago may be running out of steam.
All eyes will be on the crude trade again next week with some wondering if crude could fall as low as $120 an important technical level.
I think next week could be the biggest week for commodities in the last couple of years, says Guy Adami. After the run-ups in crude and gold, I think we could be setting up to unravel.
Also, the S&P is at a technically important level, adds Jeff Macke. Right now I’m a seller of the S&P with a tight stop above 1410. Technically the trade is short because we managed to rally but not break out. As for crude, I don’t think it will break lower but I also think next week will be very telling.
On a different note, oil companies have to find more oil, says Pete Najarian. I’m interested to hear what Baker Hughes and Transocean say at an RBC energy conference next week.
DELL CAPS STRONG WEEK FOR TECH
The headline: Tech Stocks Finish Week On Strong Note After Dell Tops Profit.
Stronger-than-expected earnings from computer maker Dell sent the stock surging on Friday and lifted the broad technology sector. The unexpectedly high quarterly profit was driven by cost cuts, overseas demand and strong sales of notebook computers.
I like Dell, adds Guy Adami, but don’t rush into it at these levels. Wait for a pull back.
Hold on, counters Pete Najarian. I see upside in this stock
Sell Dell into the strength, says Jeff Macke. And take a closer look at Cisco and Intel. Overall I think tech looks like the best sector for a while.
The headline: Tiffany, Costco Beat Earnings Estimates Even As Consumer Confidence Hovers At 28-Year Low.
U.S. consumer confidence fell to a 28-year low in May on soaring inflation expectations, while spending and price growth moderated last month, reports showed Friday. The data heightens the dilemma facing the Federal Reserve, which has loosened monetary policy to cushion the economy while betting the slowdown would put the squeeze on inflation
It’s interesting to see that both Tiffany and Costco beat estimates in this environment, says Karen Finerman. I’d play TIF because they benefit from the dollar weakness.
Amen sister, exclaims Jeff Macke.
J. CREW PLUNGS 20%
The headline: J. Crew Tumbles 20% After Slashing Full-Year Earnings Forecast
J Crew cut its full-year earnings outlook and its stock fell 15 percent as the high-flying retailer showed it was not immune to weak U.S. consumer spending. The upscale clothing company headed by Wall Street darling and former GAP Inc CEO Mickey Drexler also posted disappointing same-store sales for the first quarter.
The P/E is 20 explains, Karen Finerman. I think this stock is a little rich. I’d be a buyer at $35.
I’d dip my toe here, counters Guy Adami, I don’t know that you’re going to see $35.
SUBPRIME IN YOUR BACKYARD
The headline: Regional Bank Sell-Off Continues Following KeyCorp Warning Wednesday.
KeyCorp dropped 12% Wednesday after underestimating its exposure to bad loans. Other regional banks were dragged down with it as investors feared that the problem might not be isolated.
I wouldn’t get into this area, says Karen Finerman. Why take unnecessary risk. I’d look at Citigroup instead.
I agree, says Jeff Macke. In financials stick with the big guys.
Watch JP Morgan , counsels Guy Adami. I think it sets up nicely.
Don’t forget to buy puts, adds Pete Najarian. This is a space where you definitely want protection.
WHALE WATCHING: KIRK KERKORIAN
The headline: Kirk Kerkorian Affirms $8.50-Per-Share Tender Offer For Ford Shares Despite Recent Plunge In The Stock.
Billionaire investor Kirk Kerkorian will move ahead with his tender offer for Ford shares despite a recent slump in the No. 2 U.S. automaker's stock, pushing shares up as much as 3 percent. Kerkorian disclosed last month that he bought 100 million shares of Ford at an average price of $6.91 and planned to buy an additional 20 million shares, which would raise his stake to about 5.5 percent.
Remember he’s not bidding for the entire company just a stake, says Karen Finerman.
I’m not a Kerkorian fan right now, scoffs Guy Adami.
The headline: Harbinger Capital Has Amassed 15.3% Stake In Miner Cleveland-Cliffs.
Mining companies have been off to the races this year as investors bet that domestic weakness won’t drag down global demand. And the run may have only just begun.
According to Barron’s, “On May 22 and 23, Harbinger Capital purchased 1.1 million shares of Cleveland Cliffs for $102 million, an average of $92.75 a share. Harbinger, a subsidiary of Birmingham, Ala.-based Harbert Management, now owns 13.9 million shares of Cleveland-Cliffs, a 15.3% stake.”
In addition, keep an eye on Exxon says Pete Najarian and SandRidge . The "smart guys" are looking at these names, too.
MARKET'S SICK SECTOR
The headline: Is Cancer Conference, Merck Rebound an Buying Opportunity In Healthcare?
Kris Jenner, lead portfolio manager of the T. Rowe Price Health Sciences Fund joins the traders for this conversation. Following is a synopsis of his main points.
ASCO news this year will likely be modest except for emphasis on the so-called 'flex' study that is looking at Erbitux's usefulness in lung cancer. Jenner thinks this information will be positive for Erbitux in the long-term and recommends ImCloneas a buy.
And looking at the larger Pharma sector, Jenner likes Merck over the next 12 to 24 months and it is a core holding in his fund. With important new meds in the pipeline and a CEO who is changing the culture of the company, Jenner expects that 5 years from now we'll say this was an opportunity.
Pete Najarian thinks Amylin is worth a look for Byetta. Jenner said that he does too.
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Trader disclosure: On May 30, 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 (MSFT), (INTC), (DIS), (WMT), (ATVI); Najarian Owns (AAPL), (ANR), (BHI), (BKC), (HPQ), (TSO), (XLF), (AMLN), (HD), (SYMX); Najarian Owns (HK) Calls; Najarian Owns (EXM) And (EXM) Puts; Adami Owns (BTU), (C), (GS), (INTC), (MSFT), (NUE), (AGU); Finerman Owns (GS); Finerman's Firm And Finerman Own (GLNG), (HD); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Owns SXP Index Puts; Finerman's Firm Owns (AAPL), (MSFT), (SUN), (TSO), (VLO), (SBUX), (MPG); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY)
Jenner Owns (MRK), (GILD), (BMY); Jenner's Firm Owns More Than 1% Of (MRK), (ELN), (GILD), (IMCL), (WYE), (ALXN), (BMRN), (CEPH), (AMLN)