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Fed Meeting: To Act or Not To Act

Once the market leader, Goldman Sachs was more of a laggard today, down 2% during Monday’s trading, and off 6% from it’s August high. Compare that to other financials, which have rallied by about 7%.

Down from 170 to 160, Goldman has experienced a pretty significant pullback, says Pete Najarian. He thinks the thing to focus on here is whether people are shifting their exposure to the financials into names like Citigroup and Bank of America as the consumer begins to repair itself and the economy showing signs of strength.

Joe Terranova sees Goldman as a leader, and doesn’t see the broader market moving higher without contributions from Goldman. “What we need is participation for the market to extend this rally,” he says.

Fed Meeting This Week

With a two-day fed meeting kicking off tomorrow, everyone wants to know what the Fed has in store for the market. Fed funds futures are expecting a rate hike in January, but what can we expect?

Joe Lavorgna, Chief US Economist at Deutsche Bank gives his take. He sees more of the same with regards to Fed activity compared to June, with virtually no action or change in policy occurring after the meeting. “It’ll be great for the markets, great for fixed income,” he says.

But what will it take to see a change in stance from the Fed? Lavornga sees several things that must change prior to any big moves: The unemployment rate has to move lower, core inflation has to be contained and we have to have job gains. He thinks that if the Fed moves too soon, they’re going to abort this nascent recovery.

With many traders worried about the implications of problems that could occur in the market for commercial real estate , is this a legitimate concern for markets? Lavornga thinks it is. For regional banks it could be a problem, but still thinks that any institutions in trouble could earn their way out of problems they have, as commercial real estate accounts for a much smaller portion of GDP than residential real estate.


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Trader disclosure: On Aug. 10th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (C) Calls, Owns (CSCO) And Is Short (CSCO) Calls, Owns (FCX), Is Short (FCX) Calls, Owns (FCX) Puts; Owns (GS), Is Short (GS) Calls, Owns (GS) Puts; Owns (INTC) And Is Short (INTC) Calls; Owns (JPM) And Is Short (JPM) Calls; Owns (MCD) Call Spread; Owns (MS) And Is Short (MS) Calls

Najarian Owns (MSFT) And Is Short (MSFT) Calls; Owns (PALM) Call Spread; Owns (TCK) Call Spreads; Owns (TIBX) Calls; Owns (YHOO) Call Spread; Terranova Owns (AMZN), (MCD), (MSFT), Is Short (F), Terranova Works For (VRTS)

Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO

Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)

Virtus Investment Partners Owns More Than 1% Of (ABD)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (CLB)

Narang's Fund Is Short (NYX) And Is Long (NYX) Calls And Puts
Narang's Fund Owns (NDAQ) And Is Long (NDAQ) Calls And Puts
Narang's Fund Is Short (GS) And Is Short (GS) Calls And Puts

Stutland Is Short (EEM) Puts

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