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Halftime Report: Does Market Fully Understand Impact Of CIT Woes?

Late word suggests CIT Group is in talks with JPMorgan and Goldman to help them avoid bankruptcy. A bankruptcy, however, is still possible over the next few days, and CIT is maintaining an ongoing dialogue with regulators about the situation.

The development could be market moving explains FM host Melissa Lee because CIT buys receivables and then gets paid 60 to 90 days later so retailer can buy inventory for back-to-school and Christmas.

Does the market understand the wide ranging implications?

The news is huge for mid market retailers, explains Patty Edwards of Storehouse. I don’t think the Street fully understands the impact of a CIT bankruptcy. If a deal does not come through I think it could be retal-Darwinism.

I don’t see it like that, counters Jared Levy of Peak 6. The market is very good at finding value. I think if CIT were going to generate such a severe ripple effect we’d see it in the stock prices of many retailers, already.

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Meanwhile, investors were keenly focused on earnings reports Friday, looking to see if the latest numbers would help the market rally further. And so far, the results have been varied.

Bank of America and Citigroup became the latest banks to report big profits but also more losses from loans. General Electric beat earnings forecasts, but revenue came up short.

Is the market in jeopardy as we move into a second round of earnings?

I’m bullish short to intermediate term, says Bill Strazzullo. As long as the S&P 500 stays above 900 and the Dow stays above 8400, I’m a buyer.

And in the financials, I’m watching the XLF , Strazzullo explains. Currently it’s range bound between $11 and $13. I think a break above $13 or below $11 will be important 'tell' for overall market. Personally, I’d stay long stocks through next week’s earnings.

The news about credit losses slowing means we’re still seeing credit losses, counters Patty Edwards. I can't feel bullish until I see top line revenue growth.

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EARNINGS EDGE: TECH

After positive results from IBM , which sharply raised its full-year earnings forecast, investors are eager to hear from a string of tech companies due to report next week.

Tech Earnings Next Week
Monday: Texas Instruments (TXN)
Tuesday: Apple (AAPL), Yahoo! (YHOO)
Wednesday; Ebay (EBAY)
Thursday: Amazon (AMZN), Microsoft (MSFT)

What’s the trade?

It seems to me that tech is well poised to profit from corporate spending going forward, counsels Joe Terranova. And I would not sell Google on the back of their earnings, either.


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Trader disclosure: On July 17th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:


For Jared Levy:

Peak6 Investments Is Short And Has An Options Position In (GE)
Peak6 Investments Is Short And Has An Options Position In (XLF)
Peak6 Investments Is Short And Has An Options Position In (GS)
Peak6 Investments Is Short And Has An Options Position In (JPM)
Peak6 Investments Is Short And Has An Options Position In (AAPL)
Peak6 Investments Is Short And Has An Options Position In (BIB)
Peak6 Investments Is Short And Has An Options Position In (AMTD)
Peak6 Investments Is Short And Has An Options Position In (MCD)
Peak6 Investments Is Short And Has An Options Position In (AMZN)
Peak6 Investments Owns And Has An Options Position In (BAC)
Peak6 Investments Owns And Has An Options Position In (C)
Peak6 Investments Owns And Has An Options Position In (MS)
Peak6 Investments Owns And Has An Options Position In (WFC)
Peak6 Investments Owns And Has An Options Position In (GOOG)
Peak6 Investments Owns And Has An Options Position In (YHOO)
Peak6 Investments Owns And Has An Options Position In (MSFT)
Peak6 Investments Owns And Has An Options Position In (IBM)
Peak6 Investments Owns And Has An Options Position In (CELG)
Peak6 Investments Owns And Has An Options Position In (BSX)
Peak6 Investments Owns And Has An Options Position In (AXP)
Peak6 Investments Owns And Has An Options Position In (PEP)
Peak6 Investments Owns And Has An Options Position In (AIG)

CNBC.com with wires

Symbol
Price
 
Change
%Change
DJIA
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S&P 500
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BAC
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C
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CIT
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GE
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IBM
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SPDR FIN SEL
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GOOGL
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