Investors are closely monitoring the action in this market considering energy bulls have driven the recent gains. Is there still room to run?
Jared Levy of Peak6 thinks the way to play this market is with commodities; they typically outperform the S&P, he says and they should still have room to the upside.
And he suggests gaming it with the PowerShared DB Commodity Index ETF and PowerShares DB Agriculture Fund. However, he also counsels that June will probably be a quiet month so he recommends a modestly bullish position.
BONDS SHOW STRENGTH
U.S. Treasuries rose on Friday sending waves of relief through both the stock and bond markets.
The sharp and swift rise in yields has fed on itself recently, forcing a wave of selling from mortgage investors that now appears to have run its course, while traditional month-end buying has also helped reverse falling bond prices.
"All the factors that were leading us down have withdrawn and we're starting to see some real buying," said Rick Klingman, managing director of Treasury trading at BNP Paribas in New York.
The benchmark 10-year Treasury note was last up 20/32, yielding 3.53 percent versus 3.61 percent at Thursday's close.
I realize the TBT came in today, says Karen Finerman, but I am not at all bullish on long term Treasuries. My trade is to short notes.
FINANCIALS END WEEK HIGHER
The banking sector ended higher on the week, after Keefe, Bruyette & Woods upgraded Morgan Stanley to "outperform" from "market perform" and raised its price target on the stock, saying the bank was poised to benefit from recent improvements in its operating environment.
It seems to me there’s a clear divide in the sector, says Joe Terranova. In my opinion the good banks are JPMorgan, Goldman Sachs, Bank of America and Morgan Stanley. The bad banks are the regionals and I wouldn’t touch them.
I agree with Joe, adds Karen Finerman. If you want to play the space play it with the banks mentioned above.
SECTOR OF THE WEEK: TECH
The tech sector continued to be a bright spot in this market with Apple, IBM and Dell all higher for the week. What’s the best tech play?
In tech, I like RIMM although it pulled back on Friday, says Joe Terranova. I'm a buyer on the dip.
Don’t forget that Palm is up about 100% year to date, says Pete Najarian. I don’t think this stock can go higher unless they steal big market share from the iPhone.
And Citi Internet analyst Mark Mahaney tells the desk to keep an eye on Internet stocks. I like Google going forward, says Mahaney.
In case you’re wondering Citigroup has a ‘Buy’ rating on Google (GOOG) Amazon (AMZN), Priceline.com (PCLN), Expedia (EXPE), and Netflix (NFLX).
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Trader disclosure: On May 29TH, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Grasso Owns (AMZN), (CSCO), (RIMM), (V), (KLF); Stuart Frankel Clients Own (SUN), (YHOO), (AAPL), (AMD) ,(BAC) ,(BHI) ,(BP), (C), (COP) ,(CVX) ,(F) ,(GS) ,(HAL) ,(PFE) ,(SLB) ,(SUN) ,(USO) ,(VLO) ,(WFC) ,(USB) ,(PBR), (JPM), (LMT), (GD), (AET), (GM); Finerman's Firm Owns (MRO); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Finerman's Firm And Finerman Own (BAC) Preferred Shares And Are Short (BAC); Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Najarian Owns (PFE); Najarian Owns (BP) Call Spread; Najarian Owns (CLF) Call Spread; Najarian Owns (FCX) Call Spread; Najarian Owns (HIG) Put Spread; Najarian Owns (XHB) Call Spread; Najarian Owns (PCU) Calls; Finerman's Firm Owns (IBB), (XBI), (CSCO), Finerman's Firm And Finerman Own (FLS); Finerman's Firm Owns (BWA) Puts
Terranova Owns (XBI), (ABT), (RIMM), (HES), (TER), (BTU), (MS), (JPM), (MS), (HES); Terranova Is Short (XOM) Call Spreads; Terranova Owns (DIS) Call Spreads: Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO: Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV); Virtus Investment Partners Owns More Than 1% Of (ABD),(ARE),(CAL),(DLR),(EPR),(EXR),(IGE),(MEE),(DBC),(DBV),(DBA),(SKT),(UA),(CLB), (WBMD); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co; Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights
For Jared Levy
Levy's Firm May Have Or Have Had Positions In (USO), (DBA), (DBC), (MON), (SPY) In The Past 30 Days
For Mark Mahaney
Members Of Mahaney's Team Own (GOOG)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (PCLN), (YHOO)
Citigroup Global Markets Or Affiliates Received Non-Investment Banking Compensation From (GOOG), (AMZN), (EXPE), (YHOO) In Past 12 Months
(GOOG), (AMZN), (YHOO) Are Or Were Within Past 12 Months Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related)
(GOOG), (AMZN), (EXPE), (YHOO) Are Or Were Within Past 12 Months Clients Of Citigroup Global Markets (Non-Investment Banking, Non-Securities Related)
Citigroup Global Markets Is A Market Maker In (GOOG), (AMZN), (EXPE), (PCLN), (YHOO), (NFLX)
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