Halftime Report: Follow Goldman Into Metals & Miners?
Stocks traded sideways on Wednesday as investors grappled with the forthcoming jobs number due Friday and what it would mean for the market.
However, the Fast Money traders found their next opportunities in the metals and miners, after Goldman Sachs added 3M to its Conviction Buy list and upgraded Worthington and Schnitzer Steel to "neutral" from "sell."
Considering, Goldman raised its rating on the entire steel sector toward the end of 2009, where should you be putting fresh money to work?
Strategy Session with the Fast Money traders
In the space I’d look at underperformers including Nucor and AK Steel , counsels Tim Seymour. They’ve underperformed US Steel . But I’m more interested in specialty metals including Allegheny
and Titanium Metals .
I also like specialty metals, adds Jared Levy of Peak6. I’d stay away from big steel and stick with names like Allegheny.
I wouldn’t trade in Goldman’s wake, counters Todd Gordon of Forex.com. I'm bullish the US dollar and I think 3M has trouble as the dollar appreciates; from a technical standpoint I think it 3M stock hits resistance around $85. And looking at currency plays, I’m bullish on the dollar, specifically against the yen.
THE AG TRADE
Traders are wondering how they should game ag stocks after two weak earnings reports disappointed the Street.
Specifically, Monsanto reported a quarterly loss on Wednesday instead of the break-even results Wall Street had expected, citing a steep slide in herbicide revenue.
Also Mosaic posted slightly lower-than-expected quarterly earnings on Tuesday, hurt by currency losses.
Fertilizer companies in general have suffered in the past year as farmers cut purchases in the face of lower crop prices.
What’s the ag trade?
I think fertilizer prices are going higher, says Tim Seymour, and I’d play it long Bunge .
I also like fertilizer names and I’m still long Mosaic, adds Brian Kelly. I’d also look at Intrepid Potash.
DECEMBER TO REMEMBER FOR RETAILERS?
Top U.S. retailers will give investors the most detailed picture yet of holiday sales this week as they report same store sales on Thursday. Analysts expect a 1.3 percent increase from a year earlier at 30 retailers tracked by Thomson Reuters Data.
Meanwhile, just released data from Spendingpulse shows Online retailers, jewelers and consumer electronics retailers all saw sales gains last month while sales fell at apparel chains and department stores in December.
Also, investors are wondering if they should put new money to work in the value trade, after Family Dollar Stores reported first-quarter earnings and said it is attracting more shoppers with incomes of up to $70,000 as unemployment hovers in double digits and credit remains tight.
What’s the retail trade?
It seems to me the consumer is still really cautious, explains Patty Edwards of Storehouse. I’d stay long Family Dollar. And Spendingpulse suggests gadgets were strong despite all the economic headwinds. I think investors can still play Apple. Or take a look at RadioShack.
CES TRADES: LARGEST TECH SHOW KICKS OFF IN LAS VEGAS TODAY
The traders are keeping an eye on tech stocks with the Consumer Electronics Show now underway in Las Vegas.
According to early reports, 3D-TV is all the rage while new wireless devices -- from e-readers to ever-smaller personal computers -- are getting a lot of attention.
What’s the CES trade?
Amazon, Google and Apple are the three names I’m watching, says Jared Levy.
CALL THE CLOSE
Tim Seymour: I’m a buyer into the close.
Brian Kelly: I’m a buyer.
Jared Levy: I remain cautious. I’m a seller.
Todd Gordon: I’m a buyer.
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Trader disclosure: On January 6th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;
Seymour Owns (BG)
Gordon Is Short (FXY)
Kelly Owns (MOS)
Kelly Owns (POT)
Kelly Owns (VMW)
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