Airlines should enjoy a tailwind. Typically they trade as a proxy for oil.
Here’s the proof. From July through September when fuel prices were at their highest fuel spending accounted for 36.1 of operating expenses at the big airlines, up from 13.6 percent five years ago. With oil now significantly lower, the reverse should be true.
“However, if you have profits in airline stocks, I’d take some off the table,” says Pete Najarian.
And then there are the lesser known winners. We’re talking companies such as restaurant giant Darden, the owner of Olive Garden and Red Lobsters. On CNBC’s Squawk Box this morning Darden CEO Clarence Otis told us that his firms better than expected results announced Thursday were in part due to lower energy costs.“The silver lining in this environment is that a number of costs are starting to come back,” he said.
“Cheaper gas probably got people into the restaurants,” muses Pete Najarian. “But they’re very well run.”
“And it doesn’t hurt that commodities prices are down,” adds Zach Karabell. That would reduce input prices on things made from wheat, rice, corn, etc.
So what's the bottom line? There's a strong wind blowing down Wall Street. You can either harness its power or let it blow you all over the place.
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Trader disclosure: On Dec. 19th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seygem Asset Management Owns (EEM): Seymour Owns (AAPL), (BAC), (F), (MER), (DXO): Karabell Owns (AAPL), (GLD), (GOOG), (JPM), (UYG); Pete Najarian Owns (UYG)
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (OFC), (DLR), (EXR), (IGE), (MAC), (DBC), (DBV), (SKT), (UA), (CLB); Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights
GE Is The Parent Company Of CNBC