GO
Loading...

Bracing For Blankfein: How Will Goldman Trade?

Wall Street is bracing for Goldman CEO Lloyd Blankfein's testimony on Tuesday in which he will respond to fraud charges brought by the SEC.

As you likely remember, the government is alleging, in a civil case, that Goldman fraudulently marketed a financial instrument by hiding vital information from investors, including the role that hedge fund Paulson & Co played in its creation.

After hours, Senator Carl Levin who will be leading the questioning, accused the bank of putting its own interests ahead of its clients. The commentary suggests that the questioning could be rather contentious.

Goldman has vehemently denied the charges calling them ‘unfounded in both law and fact.”

Meanwhile, traders have been trying to make heads or tails of this stock ever since the charges surfaced about 10 days. Fundamentals are bullish but technicals are terrible.

What’s the trade?

Strategy Session with the Fast Money traders

If you’re trying to play Goldman, I’d watch the charts, says Tim Seymour. I don’t think this is a case of getting bullish because of valuations.

I believe that Goldman Sachs is innocent, but I think $150 is the bogey, says Guy Adami. For a trader that’s an important level. Now we have to wait and see if it holds. If not the downside, could be rather sharp.

If you’re thinking about trading this name, I’d make sure to buy put protection, adds Pete Najarian.

I agree with the other traders that trouble probably still lies ahead, adds Anthony Scaramucci of Skybridge.

I added to my Goldman position at $153, counters Zach Karabell of RiverTwice on the Halftime Report. Given the magnitude of the sell-off in the stock, and their incredible earnings, I think value investors will help propel GS higher.

In the space, I'd look at a long position in Morgan Stanley, adds Joe Terranova. Goldman's pain could be their gain.

------

CITI SALE

The Treasury announced Monday that it would sell 1.5 billion shares of Citigroup unwinding a portion or the government’s ownership of the bank.

What's the trade?

Sandler O’Neil analyst Jeff Harte tells the desk he’s bullish Cit for 3 reasons. They follow:
-Underweight Institutional Ownership
-Management Talent Upgrade
-Global Economic Recovery
Source: Jeff Harte, Sandler O'Neill

What’s the trade?

The fact that the stock could not close above $5 may be telling you something, muses Guy Adami.

Removing the government’s stake makes me excited, counters Joe Terranova. I think it allows the stock to climb higher.

If you want to play Citi, I’d do it with options, says Pete Najarian. Look at the calls.

------

UNDER THE RADAR: EXCHANGE STOCKS

Exchange stocks such as Nasdaq went ripping on Monday after late reports out of Washington suggested Senate Democrats' financial reform bill will include provisions that would require banks to spin off swaps desks.

Those provisions would limit banks', such as Goldman Sachs and JPMorgan Chase, involvement in the lucrative $450 trillion over-the-counter derivatives market.

Meanwhile, after the bell Senate Banking Committee boss Chris Dodd and Agriculture Committee chair Blanche Lincoln were said to be near an agreement on a combined bill for derivatives oversight.

What’s the trade?

I think fin reg is a great thing for exchanges, muses Joe Terranova. They benefit from the call to create greater transparency.

Of all the exchanges, the CME has had the most reaction to news about derivative trading, adds Pete Najarian.

But, I don't think we see the govenrment take derrivative trading away from banks entirely, says Jeff Harte. Derrivative trading touches every business within an investment bank. I just to don't think it's possible to pull it out entirely.

------

AFTER HOURS: TEXAS INSTRUMENTS

In extended trade shares of Texas Instruments trended higher after the company posted a quarterly profit at the high end of its forecast range and it said revenue would rise in the current quarter.

What’s the trade?

I think the stock is probably okay here, muses Guy Adami.

I’ve started to get interested too, adds Patty Edwards of Storehouse Partners.

------

MERGER MONDAY

Once again the action on Monday was dominated by a flurry of M&A. Following are the day’s 3 big deals.

1) Charles River agreed to acquire WuXi Pharmatech for $1.6 billion.

2) Hertz inked a deal acquire Dollar Thrifty for $1.27 billion.

3) Stifel and Thomas Weisel entered a merger agreement worth $300 million.

What must you know?

I can’t help but wonder if the Hertz deal is a sign that business travel is coming back, says Guy Adami.

I’m also watching Hertz and Dollar explains OptionMonster Jon Najarian on the Halftime Report. Both stocks are higher on the news -- likely because regulators are not going to step in. This is a case of a giant rental car company taking out another top company. It’s almost monopolistic. Great for the companies. Not so good for consumers. As a result competitor Avis is also at a 52-week high.

I would not go downstream and place bets that the business traveler is back, adds Zach Karabell, also on the Halftime Report. That’s not what this acquisition says to me.

------

EAR TO THE WALL: WHY WASHING MACHINES MATTER

Want to know a trade secret? If you’re trying to determine where interest rates are headed watch Whirlpool earnings for washing machine sales.

According to veteran trader Gary Kaminsky they’ll tell you volumes more than you ever could learn from Fed commentary.

Curious? Want to hear more? Watch the video now!



* You can find out conversation with Kaminsky at the end of the Word on the Street clip.



______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Apr 26, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Grasso Owns (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X); Karabell Owns (CAT), (GS), (FXI), (FCX); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (BTU), (NUE); Najarian Owns (C) Calls; Najarian Owns (STEC) Call Spread; Terranova Is Short (CMA), (LCC); Terranova Owns (HES), (TER), (SWN), (XCO), (AXP); Terranova Owns (C) Calls; Scaramucci Owns (GS), Skybridge Owns (GS); Seymour Owns (AAPL), (BAC), (GE), (INTC), (MSFT)

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 (XLU)
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 (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Jeffery Harte
Sandler O'Neill Served As Financial Advisor To Investor Group That Agreed To Buy First Republic Bank From (BAC)
Sandler O'Neill Recvd. Inv. Bank. Comp. From (C), (JPM) In Past 12 Mos.
(JPM) Was An Investment Banking Client Of Sandler O'Neill In Past 12 Months
Sandler O'Neill Expects To Receive or Seek Inv. Bank. Comp. From (BAC), (BK), (JPM), (C), (NTRS) In Next 3 Mos.
(BAC), (C), (JPM), (MS), (BK), (NTRS) Are Clients Of Sandler O'Neill
Sandler O'Neill Has Received Non-Inv. Bank. Comp. From (C), (JPM), (BAC), (NTRS)
(GS) Is A Non-Inv. Bank. Client Of Sandler O'Neill
Sandler O'Neill Is A Market Maker In (NTRS)

For Jim Suva
Citigroup Global Markets Or Affiliates Have Received Investment Banking Compensation From (GLW) For Services Provided In Past 12 Months
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (GLW) In Past 12 Months
(GLW) Is Or In Past 12 Months Was An Investment Banking Client Of Citigroup Global Markets
(GLW) Is Or In Past 12 Months Was A Client Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities-Related Services)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (GLW)

For Patty Edwards
Edwards Owns (AAPL) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (BAX) For Clients
Edwards Owns (BRK.B) For Clients
Edwards Owns (C) For Clients
Edwards Owns (CPB) For Clients
Edwards Owns (CSCO) For Clients
Edwards Owns (GE) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (HD) For Clients
Edwards Owns (INTC) For Clients
Edwards Owns (JNJ) For Clients
Edwards Owns (JPM) For Clients
Edwards Owns (KO) For Clients
Edwards Owns (LLY) For Clients
Edwards Owns (MS) For Clients
Edwards Owns (MSFT) For Clients
Edwards Owns (NOK) For Clients
Edwards Owns (RIMM) For Clients
Edwards Owns (PCL) For Clients
Edwards Owns (QCOM) For Clients
Edwards Owns (SI) For Clients
Edwards Owns (TXN) For Clients
Edwards Owns (UNH) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (YHOO) For Clients

For Steve Grasso
Stuart Frankel And Its Partners Own (AMR)
Stuart Frankel And Its Partners Own (BAX)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (CVGI)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PALM)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)



CNBC.com with wires

Symbol
Price
 
Change
%Change
C
---
CA
---
CETV
---
GS
---
HTZ
---
JPM MLP ETN
---
MS
---
TXN
---
NDAQ
---

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report