STOCKS RALLY ON OIL DROP
The Dow closed higher after retreating oil prices and a tame reading of core U.S. consumer prices eased inflation fears.
Investors snapped up a broad range of stocks, including beaten-down financial shares, on the view corporate profits and a flagging economy will gain from the benign inflation data, which should allow the Fed to keep rates steady.
I wouldn’t read too much into the day’s trading, says Jeff Macke. It seems like a bit of a relief rally to me.
That’s how I see it too, adds Karen Finerman.
WALL STREET CLEANS HOUSE THIS WEEK
Lehman Brothers CEO Richard Fuld is actively listening to offers for the beleaguered investment bank, including a possible bid by private-equity firm Blackstone for a 20% to 30% stake, CNBC has learned.
Word of a possible acquisition or major investment in Lehman comes as the fourth largest US investment bank struggles to combat rampant speculation about the company's future.
Earlier in the week, Lehman pushed out its chief financial officer, Erin Callan, and chief operating officer, Joseph Gregory, amid a persistent clamor over the company's weak performance.
If you want to get aggressive I think it’s okay to own Lehman, but make sure to put a trailing stop on the trade, counsels Guy Adami.
Lehman laid the ground work for a horrific quarter, adds Karen Finerman. I think it’s all in the stock, already.
If you’re looking to play financials, also look at US Bancorp , adds Adami.
OPTIONS ACTION: YOUR BANK IS IN TROUBLE
Pete Najarian is seeing unusual bearish options action in regional banks such as Fifth Third .
I see a lot of put buying in regional banks, reveals Pete Najarian. I don’t think the trouble is over in this space. Keep you eye on FITB and KeyCorp .
When Goldman Sachs sneezes the regional banks catch cold, exclaims Jeff Macke. They’re exposed to construction, agriculture and every other bad thing that’s going.
Also watch Bank of America, adds Najarian. There was enough action in the options to suggest that someone is looking for something bad to happen in this stock.
MICROSOFT, GOOGLE LEAD TECH HIGHER... YAHOO PLUNGES
Microsoft'splan to establish a strong footing in online advertising suffered a big blow on Thursday as merger talks with Yahoo formally failed and Yahoo said it would let Google sell search ads on its site.
According to Fast Money’s exclusive interview Jeffrey Lindsay, Senior Analyst at Sanford C. Bernstein, the deal could mean Google and Yahoo! will effectively control a lions share of the lucrative internet ad business leaving Microsoft out in the cold.
From a business perspective I think Google has had a great few weeks, observes Jeff Macke. They're emerging as the winner in the whole drama.
I like Google too, adds Guy Adami, but put a stop on at $540.
Apple stock fell 7% this week despite the premiere of the new 3G iPhone on Monday. There were whispers this week that Steve Jobs might be facing another health issue, although that’s strictly market rumor.
I think the stock slide has a lot more to do with the health issue than the iPhone, says Pete Najarian. And I bought puts to protect myself.
The company has come out and said he’s not sick, adds Karen Finerman. If he really is, it would leave them open to possible legal recourse. Take that for what you will.
I’m a buyer at current levels, concludes Guy Adami.
TOPPING THE TAPE: METALS & COAL
Steel Dynamics raised its second-quarter profit forecast that topped Wall Street's targets driven by strong demand for steel and recyled metals, sending its shares up nearly 4 percent.
Meanwhile Alcoa bounced 4% from a five-week low while Alpha Natural Resources and other coal producers jumped 5%.
I believe in the energy story, says Pete Najarian. I see opportunity in this space on any pullback.
Investors wonder if a sudden drop in dry bulk shipping rates drop indicates a global economic slowdown.
I think it’s an accurate indicator of what’s happening with the economy, explains Jeff Macke. It’s how much it costs to load a ship and move what's on it. To me it suggests slowing growth.
I think the global growth story remains impressive, says Pete Najarian. I own Excel Maritimeas well as the puts against it. But I expect upside.
OPTIONS ACTION: WILLIAMS SONOMA
Options actions in Willaims-Sonoma suggests to me this stock could go higher within the next five days, says Pete Najarian.
IS THE 6-YEAR SLIDE IN THE DOLLAR OVER?
The dollar posted its biggest week of gains in three years on Friday on expectations of higher interest rates following news that soaring gasoline and energy prices drove up consumer prices in May.
Meanwhile the euro ended the week 2.7 percent weaker against the dollar, its biggest weekly slide since January 2005.
I think the dollar is beginning a gradual recovery but it won’t be rapid," says Tim Seymour. With the Fed’s credibility at stake I expect to see one or two hikes in the Fall.
I’ll be listening closely to the rhetoric from the G8 meeting, adds Guy Adami. I expect to see the dollar stabilize which could send crude lower.
If the dollar starts to rally I expect trouble for American multi-national, adds Karen Finerman.
What’s the trade?
The dollar against the G3 currencies, says Tim Seymour. Or look at the Wisdom Tree Trust .
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Trader disclosure: On June 13, 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 (ATVI), (INTC), (MSFT), (DIS); Adami Owns (AGU), (C), (BTU), (GS), (INTC), (NUE), (MSFT), (INTC), (MSFT), (DIS); Pete Najarian Owns (ANR), (BHI), (CHK), (TSO), (XLF), (HPQ); Pete Najarian Is Short (KEY); Pete Najarian Owns (BAC) Puts, (WFMI) Puts, (FITB) Puts; Pete Najarian Owns (EXM) And (EXM) Puts; Pete Najarian Owns (AAPL) And (AAPL) Puts; Finerman Owns (GS); Finerman's Firm Owns (MSFT), (NYX), (SUN), (TSO), (VLO), (PM), (MO); Finerman's Firm Owns SPX Index Puts; Finerman's Firm Is Short (BIG), (IYR), (IJR), (MDY), (IWM), (SPY); Finerman's Firm Is Long (AAPL) Out-Of-The Money Calls; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short The British Pound