MORGAN STANLEY CEO TO STEP DOWN
In the after hours, traders were trying to get a handle on Morgan Stanley’s future after learning that CEO John Mack intends to step down.
Mack came under heavy fire recently after Morgan reported a string of losses including one from this past quarter that was significantly worse than analysts had expected.
He was also the target of shareholder ire for being too conservative in recent months and, as a result, not generating massive profits like those reported by more aggressive rival Goldman Sachs.
Morgan Stanley co-president James Gorman will replace Mack in early 2010.
What’s the trade?
I don't think the move impacts Morgan Stanley stock, muses Tim Seymour.
The Bank of America deal to acquire Merrill is paying off, adds Jon Najarian and down the road I think Morgan's deal to acquire Smith Barney does the same.
It seems to me Morgan has been moving in this direction since January, speculates Pete Najarian.
MARKET HITS NEW 11-MONTH HIGHS
For the 5th consecutive day both the Dow and S&P closed higher, with Thursday’s gains coming after new data showed jobless claims fell last week.
High unemployment is one of the biggest concerns as the economy attempts to pull out of recession.
The S&P is now trading at its highest level in nearly a year.
Where to next?
Patterns in the chart of the S&P suggest to me that there aren't many resistance points between here and 1,100, says Jon Najarian.
It seems investors are looking at 1130 and 1060 as the two important technical levels, adds Tim Seymour.
If the S&P hits 1100 I'd think we'd see asset re-allocation because that's where the major investment houses put their targets, adds Zach Karabell. At that level don't be surprised to see a whole lot of profit taking.
FINANCIALS TURNAROUND MID DAY
Despite heading lower at first, financials closed in positive territory shrugging off comments from widely followed banking analyst Meredith Whitney who suggested another leg down was coming.
Banks are not going to see their earnings rise too much from now on, she warned on CNBC.
"Banks are taking advantage of what the government is doing by artificially inflating asset prices so they can ride a steep yield curve and they're going to have a third quarter that reflects that," Whitney said.
However, she’s not entirely bearish. Whitney did say Goldman Sachsstill has "gas in the tank" and she kept her 'buy' on its stock. "Goldman is taking a lot of the place that Lehman left," she said.
What's the trade?
I think the opportunities in the space are with insurance, says Oppenheimer’s Carter Worth on Fast Money's Halftime Report. I’d look at Chubb and Marsh & McLennan . They’re beaten down and left for dead. On a relative basis they could outperform.
Chip makers helped give the Nasdaq a boost on Thursday after ASML and Texas Instruments both raised sales forecasts.
Dutch ASML cited improved expectations of consumer demand and higher chip prices in some markets. Texas Instruments said it expected stronger revenue in every segment than it had forecast in July, boosting shares in its key client, Nokia .
Investors took the results as another sign that consumers are buying more gadgets.
What's the trade?
The chip makers are starting to stall, explains Jon Najarian. I'd wait until the end of the quarter then look at the space again.
In the space I like Nokia, reminds Tim Seymour.
I also like Nokia, adds Pete Najarian, but they don't have an iPhone or BlackBerry and they need one.
TOPPING THE TAPE: YHOO
Internet search giant Yahoo edged higher on Thursday after after Banc of America Securities-Merrill Lynch Research upgraded the company to "buy" from "neutral", saying growth in user traffic continues to outpace growth in the Internet as a whole.
What’s the trade?
I’m a fan of Yahoo, reveals Jon Najarian. I still like the company and think CEO Carol Bartz is focused on the right things.
It seems to me that the second tier names like Yahoo! are starting to benefit as people move away from Google and old media, adds Zach Karabell.
MEDIA STOCKS IN FOCUS
A prominent analyst on Thursday called for a merger of Comcast and Time Warner Cable, saying such a blockbuster deal would offer a host of benefits for both cable giants.
Citi analyst Jason Bazinet, in a note to clients, said a deal between Comcast and Time Warner would give the combination 37 percent of the pay TV market plus offer about $2.7 billion in cost savings.
Bazinet's prediction comes on the heels of a court case that struck down a rule limiting cable companies to no more than 30 percent of the U.S. pay-TV market.
AG TRADE: MONSANTO SLAMMED
Not all the headlines on Thursday were rosy. Optimism was tempered by Monsanto after the world's biggest seed company forecast fiscal 2010 earnings below Wall Street's estimates.
What’s the trade?
I’d be careful about buying Monsanto right now, counsels Dennis Gartman, author of The Gartman Letter on Fast Money's Halftime Report. It’s basically a bet on how much is going to be planted next year. With prices down and heading lower I think there will be less planting of corn and soybeans next year.
I think the stock is a buy on this kind of pullback, counters Pete Najarian.
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Trader disclosure: On Sept. 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; Najarian Owns (AAPL) & Short (AAPL) Calls; Najarian Owns (BAC) & Short (BAC) Calls: Najarian OWns (C) Calls: Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (JOYG) & Short (JOYG) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (MOS) Call Spread; Najarian Owns (PALM) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (YHOO) Calls; J Najarian Owns (AAPL), (BAC), (C), (BX), (ESLR), (GS), (GLW), (HGSI), (NUE), (PDE), (SUN), (WFC); Seymour Owns (AA), (AAPL), (BAC), (BX), (DRY), (EEM); Seymour's Firm Is Short (FXI), (F), (RIG); Karabell Owns (AAPL), (BHP), (C), (FCX), (FXI), (IBM), (JPM), (MON), (NOK), (HON)
For Charles Boorady
Citi has managed an offering of securities of (CI)
Citi has received compensation from (AET)
Citi has received compensation from (CI)
Citi has received compensation from (UNH)
Citi has has (CI) as a client in past 12 months
Citi has has (AET) as a client in past 12 months
Citi has has (HUM) as a client in past 12 months
For Joseph Greff
J.P. Morgan has an investment banking relationship with Bally, Boyd, Carnival, Host Hotels & Resorts, International Game Technology, LaSalle, Mariott, MGM Mirage, Pinnacle, Royal Carribean Cruise, Starwood, Sunstone, WMS Industries.
A J.P. Morgan exec it on the board of Choice Hotels International.
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