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Fast At The Half: Google Goosing Tech

Thursday, 16 Apr 2009 | 1:17 PM ET

FAST AT THE HALF: GOOGLE GOOSING TECH

Around lunchtime the bulls were whispering about Google’s quarterly results, which come out after the bell, and what they’d reveal. There’s cautious optimism in the technology sector after Nokia reaffirmed its handset market forecast.

Also there’s talk of renewed M&A activity in tech after a report suggested Sun Microsystems would be willing to resume takeover talks with IBM . CNBC’s Jim Goldman, however, says IBM has rebuffed any new deal talks largely because Sun’s unwilling to unravel existing contracts. Investors, however think IBM could make other acquisitions.

Fast Money Halftime Report
Traders give their take on what's moving the markets, with Jon Najarian, OptionMonster.com; Dan Fitzpatrick President Stockmarket Mentor; Brian Stutland, Stutland Equities; Fast Money's Jeff Macke & Melissa Lee.

Strategy Session with the Fast Money Traders

I’d sell Google ahead of the numbers, counsels Jeff Macke. They make most of their money from ad sales and we saw from Gannett that ad sales are not working. That's the one horse that Google is riding and it's going nowhere fast.

As right as Macke was about Gannett, I think he’s wrong about Google , counters Jon Najarian. I see it moving over $400 on the earnings.

Options traders are betting on a 7% move in either direction on earnings news, adds Brian Stutland. Since the stock has had a huge run; I’d take some profits.

I’m long Google right now but probably won’t be by 9:45am Friday morning, adds Dan Fitzpatrick. I’m planning to sell at the open. And, if you’re looking for an internet play I’d look at Sina or Baidu.

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JPMORGAN’S MIXED MESSAGE

Meanwhile, Dow component JPMorgan reassured skeptical investors about the health of banks after it reported better-than-expected quarterly results. However the bank also said its credit card business had a loss of $547 million as delinquent loans soared and consumers spent less, but the negative news wasn't enough to sour investor sentiment.

Also, Chief Executive Jamie Dimon said the bank has the money to repay the $25 billion in TARP money it received back in October.

"That's probably the most positive thing any investor could hear," says Rob Lutts, chief investment officer of Cabot Money Management. That is, Lutts thinks it was a psychological boost for investors to hear the bank does not want government support.

I think the financial play is now over and I’d wait until May to play the space, counsels Jeff Macke.

Options action has been strong in Regions , adds Jon Najarian. I’m watching that one.

The trade was on Wells Fargo last week when they announced they will post better than expected results, counters Dan Fitzpatrick. But ever since, all the good news has been factored into the financials. If you think you’re early in buying the financials, you’re not.

If I got into the space I’d buy calls with defined risk so I’m cut off on the downside, adds Brian Stutland.

CONSUMER SHARES GO POSITIVE FOR THE YEAR

The latest economic data released Thursday revealed a glimmer of hope that the economy could rebound by the end of the year; the number of U.S. workers filing new claims for jobless benefits unexpectedly fell last week. The Street may be taking it as a sign to start betting on the consumer -- the Consumer Discretionary SPDR ETF is now positive for the year.

I think the XLY is the signal but not the trade, counsels Dan Fitzpatrick. That says to me investors think the best is yet to come, but I don’t know I believe that.

It seems to me people are starting to travel and feel a little better, but there are still those pesky fundamentals that could drag the sector down, adds Jeff Macke.

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CHINA SAYS ECONOMY JUST FINE

China's State Council said their economy is in better shape than expected as stimulus measures have started to show positive results.

Nonetheless, the rate of growth slowed to 6.1 percent in the first quarter from 6.8 percent in the fourth quarter, slightly missing economists’ forecasts.

However, growth is growth and some analysts feel the momentum lends more credence to Beijing's assurances that it can reach its 2009 growth goal of 8 percent. That’s a critical level; widely seen as a minimum for creating enough jobs for the country's ever-expanding labor force.

6.1% is still tremendous growth and I would not be disappointed by that number, counsels Tim Seymour. As far as I’m concerned this is the only place in the world where’s the growth. I think you can look at Posco, BHP Billiton, or Vale. Steel has underperformed the rally and China’s numbers reinforce what I expect to see -- strength in steel.

Want more trades? Check out the video above for Fast Money’s Fast & Furious trades.


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CNBC.com with wires

  Price   Change %Change
BHP
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BIDU
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GCI
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IBM
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JPM MLP ETN
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NOK
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549
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RF
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RIO
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SINA
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WFC
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SPDR CD SEL
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GOOGL
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