DOW CLOSES ABOVE 8500
The Dow climbed along with oil prices while General Motors rose after its financing arm qualified for government funds, helping it stave off potential bankruptcy.
The Federal Reserve opened the door for GMAC LLC to become a bank holding company on Wednesday, letting it tap into government lending programs.
Still, little could change the fact that 2008 was wrapping up as one of the worst years for stocks and the global economy as a whole. By some measures, U.S. households have lost about $10 trillion in wealth this year alone, according to a Merrill Lynch research note.
For the week, the Dow declined 0.7 percent while the S&P 500 lost 1.7 percent and the Nasdaq shed 2.2 percent.
Strategy Session with the Fast Money Traders
The buzz on the trading floor was more like a low level hum, says Melissa Lee who’s in for Dylan Ratigan. In other words it was a slow day.
Right now the market is thin, explains Pete Najarian. Be careful in this environment.
I don’t expect there will be anything going on next week either, adds Dennis Gartman.
GM was one of the components that lifted the Dow higher. But why would anyone on earth buy GM stock, asks Jeff Macke. If it goes over $5 I’d get short.
WILD YEAR ENDS WITH A WHIMPER
Wall Street’s favorite measure of fear, the VIX is currently around 44 – a level not seen since October 1st. The VIX has now declined 40% since it’s record high close on November 20th.
I wouldn’t read too much into it, counsels Pete Najarian. The VIX is coming down on low volume.
A year ago nobody would have ever thought we’d get above 40 on the VIX– let alone cheering that its decline to this level, muses Dennis Gartman.
Options are illiquid and expensive right now, exclaims a disgruntled Jeff Macke.
NO CHRISTMAS MIRACLE FOR RETAILERS
Retailers' sales fell as much as 4 percent during the holiday season, as the weak economy and bad weather created one of the worst holiday shopping climates in modern times, according to data released on Thursday by SpendingPulse.
The figures, from the retail data service of MasterCard Advisors, show the 2008 holiday shopping season was the weakest in decades, as U.S. consumers cut spending as they confront a yearlong recession, mounting job losses and tighter credit.
It was the year without a Santa Claus, bristles Jeff Macke. But this is not a case of buy the bad news..
Consumers will probably spend on food and medicine, adds Joe Terranova. But not on retail. I think you’ll see people saving.
I think in 2 years the savings rate will rise to 10%, adds Dennis Gartman.
If you’re looking for a retail trade, Jon Najarian tells the gang he likes Wal-Mart, Family Dollar, and TJX Companies, all from the long-side.
Of those three the only recommendation I like is Wal-Mart, Jeff Macke bristles.
I like Family Dollar, adds Dennis Gartman.
What do you think? Tell us now!
AMAZON.COM'S BEST XMAS EVER
Online retailer Amazon.com on Friday reported its best holiday sales season yet, even as sales and traffic at U.S. store chains were the weakest in decades, sending its shares up nearly 4 percent intra-day.
Analysts have pointed to Amazon as a rare bright spot in this year's holiday shopping season due to its scale and flexibility, as retailers try to outdo each other with deep discounts to lure consumers during a recession.
Online sales were also helped by winter storms that hit large sections of the United States on the last major shopping weekend before Christmas.
In a release titled "Amazon.com's 14th holiday season is best ever," the company said more than 6.3 million items were ordered on its site worldwide for the peak shopping day of Dec. 15, amounting to 72.9 items ordered per second. On its peak day, it shipped more than 5.6 million units.
The release lacks specifics, muses Melissa Lee. No mention of margins anywhere.
If you’re looking to trade it, I’d sell Amazon and buy Kroger's against it, counsels Joe Terranova.
In other tech news, I thought it was interesting hearing that Apple is going into Wal-Mart, adds Pete Najarian. I think it should drive traffic in their stores. But in the long run the Mac is the high margin product, not the iPhone.
Wal-Mart is notorious for squeezing their suppliers, adds Jeff Macke. It could be interesting.
Oil climbed in thin post-holiday trade on Friday after the United Arab Emirates said they will deepen supply cuts in line with OPEC's biggest-ever output cut announced last week and the dollar weakened against the euro.
Oil Contract Moves Friday
Dec. 2010 +$2.59
Dec. 2012 +$3.09
Dec. 2016 +$3.12
The contango has to come out of the market, says Joe Terranova, before oil can go higher. We have to work off the excess inventory.
Rallies in crude should be sold, adds Dennis Gartman. However, I’d keep an eye on the oil companies. They don’t go down anymore on bad news in crude. I wouldn’t be short.
And keep an eye on gold , adds Joe Terranova. It could be a bullish trade in 2009.
OPTIONS ACTION: KING PHARMACEUTICALS
Pete Najarian is seeing unusual options action in King Pharmaceuticals.
The volume of call buying suggests to Pete Najarian that this stock could go higher.
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Trader disclosure: On Dec. 26th, 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), (WMT), (TM), (SDS), (MCD); Pete Najarian Owns (UYG) And Is Short (UYG) Call; CIBC Gartman Index Owns Gold, Natural Gas; CIBC Gartman Index Is Short Crude Oil; CIBC Gartman Index Is Long The Grain Market; CIBC Gartman Index Is Long Hong Kong Shanghai Composite Stock Index; Citibank is a client of Dennis Gartman
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
Jon Najarian Owns (FDO), (TJX)
CNBC.com with wires