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Fast Money HomeFast Money Rapid RecapAbout Fast MoneyFast Money BiosFast Money Web ExtraFast Money Disclaimer
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Jun.16
5:50 PM ET
Monday, 16 Jun 2008
Market Little Changed Ahead Of Goldman
Posted By:Lee Brodie
Sectors:Oil and Gas

MARKET LITTLE CHANGED AHEAD OF GOLDMAN EARNINGS

The Dow [.DJIA  Loading...      ()   ]finished Monday’s session modestly lower as investors continued to worry about the course of the economy. The volatility is finally starting to tip lower, explains Pete Najarian. That really started to happen when oil pulled back.

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TO $140 AND BACK

Crude [US@CL.1  Loading...      ()   ]made a new record high of $139.89 a barrel, before paring gains to settle slightly lower as Saudi Arabia, the world's top producer, appeared poised to boost production to the highest level in decades.

Everything in oil points to Friday, says Joe Terranova. It’s expiration day when the contracts come off the front of the board. But despite that, I think the best way to play the energy space is with nat gas.

I’ve got two trades for you, exclaims Pete Najarian. Chesapeake [CHK  Loading...      ()   ]looks like a buy simply because CEO Aubrey K. McClendon is buying up his own stock. And look at AMR [AMR  Loading...      ()   ]as a play on any pullback in crude.

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GOLDMAN GOLDEN TOMORROW?

Investors are eager to hear from Goldman Sachs [GS  Loading...      ()   ]Tuesday before the bell. They want to know if the brokerage has been able to steer clear of bad loans and other negatives that have dragged down the overall financial sector.
And only one day later the Street gets results from Morgan Stanley [MS  Loading...      ()   ]with most analysts polled by Thomson Financial expecting 92 cents per share on revenue of $7.05 billion


What should you expect? For insights we turn to Sandler O'Neil brokerage analyst Jeff Harte. Following is a synopsis of his main points.

I don’t think Goldman is going to miss. I think they’re likely to beat. They have a big commodities trading franchise and from what they’ve been saying they’ve been on the right side of that, says Harte. And Goldman has what’s perceived to be a high quality balance sheet.

And what about Morgan Stanley?

They’re also viewed as quality, Harte says. I don’t think they’ll miss. And if they do miss I think it’s because they’re an aggressive hedger.

Meanwhile, Lehman Brothers [LEH  Loading...      ()   ] reported it’s first -ever quarterly loss on Monday.

What about Lehman?

On the call Monday they helped to put solvency concerns behind them.. but the future remains murky.

What’s the bottom line?

“At the end of the day... I don’t think the brokers are a buy for summer," Harte concludes. "Wait and see what they do to generate revenue going forward.”

Read More:

> Find out how Guy Adami recommends trading Goldman and Morgan in  “Take Your Position: Financials”

> Learn what the Goldman and Morgan charts suggest to Carter Worth in "Chartology."

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BET ON DIVING DOLLAR AGAIN?

The dollar fell versus the euro on Monday, snapping a three-day winning streak. New inflation data in Europe all but sealed the deal for an ECB rate hike next month.

The dollar had strengthened in recent days after Treasury Secretary Hank Paulson warned that he isn't ruling out intervening in currency markets to stabilize the dollar. U.S. Federal Reserve Chairman Ben Bernanke also helped lift the dollar by suggesting the Fed is prepared to raise interest rates to fight inflation.

I thought the recent G8 was very disappointing, says Joe Terranova. I don’t think the dollar will plunge but I’m not terribly bullish either.

I expect the dollar to go higher in the second half of the year, counters Guy Adami.

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AFTER HOURS ACTION

Should you buy Rocco's Callaway [ELY  Loading...      ()   ] or Tiger's Nike [NKE  Loading...      ()   ]on the US Open?

I wouldn’t race out and buy ELY, says Guy Adami, but it doesn’t hurt that they have another face to front their prodcuts.

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IS IT TOO LITTLE, TOO LATE FOR SIRIUS?

FCC Chairman Kevin Martin said on Monday that he would support the proposed merger of XM [XMSR  Loading...      ()   ]and Sirius [SIRI  Loading...      ()   ]after the firms agreed not to raise prices or stifle competition. His decision could remove the last regulatory hurdle in a lengthy and heavily criticized move to combine the companies.

I think the government absolutely bludgeoned these companies, Jeff Macke exclaims. And whatever Martin says, there are other commissioners who have to weigh in.

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BLACKBERRY STILL BETTER?

Research In Motion [RIMM  Loading...      ()   ] stock jumped 6% on Monday after Citigroup and American Technology recommended RIMM as a buy on iPhone weakness.

I think RIMM is firing on all cylinders, says Pete Najarian. But I certainly don’t think Apple [AAPL  Loading...      ()   ]is dead. They could very well have a breakout quarter.

You could probably own both, adds Guy Adami. I expect Apple to have a 2-handle on it by July 4th.

Also the technicals on apple also look good to me, adds Joe Terranova. I think it’s a buy with a stop at $165.

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TAKING A KEG STAND

Belgian brewer InBev on Sunday warned Anheuser-Busch