HALFTIME REPORT: SWINE FLU: DON'T LET YOUR PORTFOLIO PANIC
Stocks traded modestly lower by mid-day Monday. New details about the swine flu gave health care and biotech names a boost but dragged down the airlines, hotels and other travel & leisure names.
Shares of Baxter , GlaxoSmithKline , Crucell and Gilead all made gains on the potential that they could benefit from vaccines and treatments.
Both Crucell and Gilead are names that I’m watching explains Jon Najarian, because they both have a great deal of vaccine exposure. But they’re also trading down to their session lows, which suggests the panic may be abating.
Of course, there will be companies that make money from swine flu -- it seems to me GlaxoSmithKline and Baxter are probably good plays on that, Najarian adds.
I agree, concurs Mike Khouw. It’s possible that the government might want some of those firms mentioned above to provide stockpiles.
And swine flu could be a catalyst, adds Joe Terranova. Just what the doctor ordered to give the biotech space a jolt.
WILL SWINE FLU DERAIL GLOBAL RECOVERY?
Oil prices fell more than 3 percent to below $50 a barrel as investors feared swine flu could pose a new blow to an already fragile global economy if trade flows are curbed and manufacturing is hit.
"On top of a synchronized global financial and economic crisis, an outbreak of swine fever is the last thing we need just now," says Neil Mackinnon, chief economist at ECU Group.
Airlines and travel companies took the brunt of the selling amid concerns passengers could hold back from flying for fear of catching the virus, which has already reportedly spread as far as New Zealand.
Meanwhile, Mexico’s peso dropped nearly 3% against the U.S. dollar, and the dollar more generally was stronger against most rivals on its safety appeal.
I’d be cautious on Mexico right now, counsels Tim Seymour. That’s a market that seems fragile.
And looking globally I’d rip a page out of the playbook from when SARS hit. At that time metals were really bid lower. However, in the long run the price action was overstated. I think the same could be true again. That suggests nickel and platinum could be buys right here, he says.
FRIDAYS ARE THE 'TELL'
Fast Money has spotted a trend that’s worth watching. Over the past month stocks seem to rally on Friday’s but then sell off on Monday and Tuesday.
Here’s the trade. Until we see a weak Friday close I’d stay with the rally, explains Joe Terranova. I think the S&P is marching up to 900.
And I’d buy the Monday dip, adds Dan Fitzpatrick.
TOPPING THE TAPE: CORNING
Investors bid shares of Corning higher after earnings from the specialty glassmaker topped Wall Street expectations on a mid-quarter rebound in demand for its flat-screen television glass.
The world's largest maker of liquid-crystal-display glass earned $14 million, or a penny a share, in the January-March quarter, down from $1.03 billion, or 64 cents a share, a year earlier.
I really like Corning, says Dan Fitpzatrick. Patterns in this chart suggest the path of least resistance is higher.
If you’re looking for a tech trade, I’d look at Apple , counters Joe Terranova.
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CNBC.com with wires