Halftime Report: Gaming The Intel Results Ripple
On Thursday, investors were rushing to place bets on tech stocks ahead of Intel earnings due after the bell.
With its chips used in everything from computers to smartphones, Intel results are widely seen as a barometer for the entire sector.
How should you position yourself?
Instant Insights with the Fast Money traders
Given what they’re supposed to earn next year Intel looks cheap, says Guy Adami. But my concern is that the stock has not performed with the rest of the space since October. $21 has been resistance. I can’t help but wonder if its lagging, is it telling you something?
I love Intel but I think it trades sideways after earnings, counsels OptionMonster Jon Najarian. I’d much rather own Marvel.
Keep in mind the risk reward, says Jeff Tomasulo of SMB. Intel is trading near its 52-week high. Intel has to knock the cover off the ball to move even an inch higher. But if they do knock the cover off the ball I’d look at the QQQQ or the SMH to play the industry as a whole.
With the PC upgrade cycle coming I think Intel stock is a buy even if it goes sideways for a short period of time, adds Eugene Profit of Profit Funds.
If you want to play the PC upgrade I do it with Hewlett Packardinstead, counters Adami.
TAKE YOUR POSITION: JPMORGAN
With banks under the microscope again, the traders are eager to hear from JPMorgan , which kicks off bank earnings when they report on Friday.
Largely investors will be looking for signs that loan demand could return this year and that the banks have finished putting aside money against future losses.
"We're expecting weak earnings but a more positive outlook," said Anthony Polini, analyst at Raymond James.
What’s the bank trade?
I’m long JPMorgan and Goldman, reveals Eugene Profit. But last quarter JPM had strong earnings and the stock went down. It wouldn't surprise me to see the same thing again.
If JPMorgan trades above $45 I think it could go to new highs, adds Jeff Tomasulo.
OBAMA HITS BACK AT BANKS
Investors are closely watching the action in bank stocks after the White House took another swing at big Wall Street firms.
The administration is looking to impose a ‘financial crisis responsibility fee’; the move could generate as much as $90 to $120 billion dollars for tax payers over the next 10 years.
What’s must you know?
I’m not sure there's a bank specific trade, says Guy Adami, but it suggests to me more taxes may be coming for big firms in other areas -- such as big oil.
MARKET BUZZKILL: RETAIL ROUT
Investors turned bearish on retail stocks after the latest data showed sales fell in December, the first decline in three months and a surprising dip during the holiday shopping season.
Meanwhile, a separate report from the Labor Department showed initial claims for state unemployment benefits rose 11,000 to 444,000 last week, higher than the 437,000 claims that analysts surveyed by Reuters had forecast.
What’s the trade?
The results confirm that the mid-range consumer is still hurting, explains Patty Edwards. I think the play is the trade-down trade. I’m bullish TJX. And I like Aeropostale.
I’m bullish J Crew, adds Guy Adami. It’s holding its 50-day moving average. I’d own it as long as it holds that level.
OPTIONS ACTION: TEXTRON (TXT)
Jon Najarian has spotted unusual options action in Textron . The volume of February calls traded on Thursday suggests to Najarian this stock could make a sharp move higher.
TRADE TO GO: HEALTH CARE PLAY
Guy Adami suggests putting Stryker on your radar.
The Negotiator first recommended this maker of artificial joints when Fast Money friend Regis Philbin announced he was going in for hip replacement surgery.
> Click here to read more about this trade.
CALL THE CLOSE
Jeff Tomasulo: I’m a buyer.
Jon Najarian: I think we stay green into the close.
Eugene Profit: I’m a buyer.
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Trader disclosure: On January 14th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian Owns (AMAT) Calls; Pete Najarian Owns (CLF), Is Short (CLF) Calls; Pete Najarian Owns (HUM) Call Spread; Pete Najarian Owns (INTC) Call Spread; Pete Najarian Owns (MS); Pete Najarian Owns (PFE); Pete Najarian Owns (QCOM) Calls; Pete Najarian Owns (TCK), Is Short (TCK) Calls; Pete Najarian Owns (TXT) Call Spread; Pete Najarian Owns (XLF) Calls; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IYR), (MDY), (IWM), (USO), (UNG), (TLT), (BCR); Finerman Owns (AAPL); Finerman's Firm And Finerman Own (CVS); Finerman's Firm Owns (MSFT), (TGT), (WMT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman's Firm And Finerman Own (GOOG); Terranova Is Long March British Pound Futures; Terranova is Long Copper Backwardation Futures: Long May 2010, Short July 2010; Terranova Owns (QCOM), (MSFT), (EMC), (FCX), (JPM), (FTO), (XOM), (BAC); Terranova Is Short (CMA), (JCI), (CAL), (ESS), (AGU), (ICE); Terranova Owns (POT) Feb. Puts; Terranova Owns (XHB) March Puts
For Joe Terranova:
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
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 (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)
For Moshe Orenbuch:
(JPM) Is Or In Past 12 Months Was A Client Of Credit Suisse
Credit Suisse Provided Investment Banking Services To (JPM) In Past 12 Months
Credit Suisse Provided Non-Invetment Banking Services To (JPM) In Past 12 Months
Credit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (JPM) In Past 12 Months
Credit Suisse Has Received Investment Banking Compensation From (JPM) In Past 12 Months
Credit Suisse Expects To Receive/Seek Investment Banking Compensatoin From (JPM) In Next 3 Months
Credit Suisse Has Received Non-Investment Banking Compensation From (JPM) In Past 12 Month
For Mike Khouw:
Cantor Fitzgerald & Co. Is A Market Maker In (INTC)
Cantor Fitzgerald & Co. Is A Market Maker In (TXN)
Cantor Fitzgerald & Co. Is A Market Maker In (AMAT)
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