Strategy session with the Fast Money traders
I’d start to own stocks that benefit from a rising rate environment, counsels veteran trader Gary Kaminsky. In order for Bernanke to have credibility on the global stage he has to err on the side of higher rates. Investors should adjust their portfolio to reflect that.
I'm focussed on the market at hand and there was every reason for it to sell-off Friday before the long week-end, but the market came back. There's a lot of noise out there but it seems to me that fundamentals are improving, says Karen Finerman.
When I look globally at central banks moving to raise interest rates, it's a signal that quantitative easing is working, adds Joe Terranova. And that's bullish.
I agree that the market held up rather well on Friday, adds Guy Adami. Given the news out of China I thought stocks would be down more. But it's not just China in a vacuum or Greece in a vacuum or the 'good news bad price action.' It's a cocktail and that cocktail is telling you the market wants to go lower. If you’re looking for a trade, stick with things that are working, Adami adds. For me that’s Raymond James.
PROP DESK: WATCH EURO FOR MARKET CLUES
Weakness in Europe is another factor dragging down stocks with investors worried about any ripple effect stemming from an EU bailout of Greece.
Brian Kelly of Kanundrum has been watching the euro closely for clues. What does the EU currency reveal?
I’m watching the 136 level on the euro closely, say Kelly. It was support and now its resistance. What happens from here will be very telling
I think the play is long Bank of Greece, he adds, because I expect the EU will stand behind Greek bonds.
SECTOR TRADE: COMMODITIES
Perhaps the one group that lies at the epicenter of the global economic uncertainty is commodities. Nominated in dollars, they become more expensive to buyers using other currencies when the dollar gets stronger.
What’s the trade?
The one trade I’d stay with is oil , counsels Joe Terranova. Of all the commodities I wouldn’t give that one up.
In the space, I’m watching Freeport McMoRan, says Guy Adami. If you’re a bull I’d wait for FCX to close above $75.50 and then establish a long position. Or if you’re a bear I’d go short with a stop above $75.50.
INVESTING IN HIGHER RATE ENVIRONMENT
If an interest rate hike is on the horizon, how should you be putting money to work? Find out from Neuberger Berman's Charles Kantor. Watch the video now!