Strong Earnings Trump Global Economic Worries
Stocks chalked up their best day in nearly two months on Thursday as investors welcomed a string of positive market catalysts.
Greece appeared close to a bailout deal, easing fears about a wider debt crisis, and earnings season continued to be strong; Motorola beat forecasts and Visa reported higher-than-expected profits and raised its revenue outlook, spurring hopes of a revival in consumer spending.
How should you be positioned now?
Strategy Session with the Fast Money trader
Numbers don’t lie, says Gary Kaminksy. We had over 300 new highs on the NYSE. Rotation is strong and the economy is recovering. I just don’t see a pullback on the horizon. I believe the bull trend is solidly in tact.
S&P Earnings Scorecard Q1 - 2010
Actual earnings growth: 60%
Actual revenue growth: 9%
Forward P/E: 13.7*
Source: Thomson Reuters *as of 4/28 close
I think the market may be facing some increased headwinds, counters Anthony Scaramucci. We have a stronger dollar which tends to have a negative impact on stocks broadly, and analysts are increasing their estimates in the wake of the strong earnings. Can the market keep up?
As we mentioned above, Greek stocks surged on Thursday as the EU and the IMF sped up efforts to finalize an aid package – now pledging up to $160 billion.
Is the crisis over?
Our whole recovery is based on governments being able to borrow money and pump it into their economies, says Brian Kelly. I'm still worried that the contagion could still spread.
I'm with you brother, says Guy Adami. But the market is saying it's not a big deal.
There are names and industries that are working.
What specific stocks do the Fast Money traders have on their radars?
If you’re looking for an under the radar trade I’d look at Danaher, says Guy Adami. I think it may have room to run. And I also like BorgWarner on a pullback.
Also industrials are also performing well, says Karen Finerman. I like Lear and American Axle.
For me it’s all about stocks with strong dividends, explains Pete Najarian. I’m loving the great P/Es and strong dividend yields.
CHART OF THE DAY: GOLDMAN SINCE THE TESTIMONY
Thursday’s chart of the day will be music to Lloyd Blankfein's ears. Since Goldman execs testified in front of Congress, Goldman stock has done nothing but rally - it’s up 5% in three days.
In fact, many banks including BofA and Citi have climbed since the senate hearings.
What’s the bank trade?
I’m bullish Goldman and the financials in general, says Anthony Scaramucci. I think people both inside and outside of Wall Street found the flogging Goldman experienced to be distasteful.
I’m bullish Jefferies , says Pete Najarian. Call activity suggests this stock could make a sharp move higher. Keep an eye on it. The chatter suggests Jefferies may be a takeover target.
It wouldn’t surprise me to see a Canadian bank take-out Jefferies, adds Anthony Scaramucci. Those banks are looking for strategic acquisitions in the US. Personally, my guess would be Bank of Montreal.
OIL SPILL AFTERMATH
The terrible oil spill in the Gulf of Mexico may have wide reaching implications.
The spill has been spewing 5,000 barrels of sweet crude oil a day into the gulf and has moved steadily toward the mouth of the Mississippi River and the wetland areas east of the river, home to hundreds of species of wildlife and near some rich oyster grounds.
Officials predict landfall on Friday.
Florida Democratic Senator Bill Nelson, citing the risk of a potential "environmental and economic disaster" from the Gulf oil spill, said on Thursday he was filing legislation to temporarily prohibit the Obama administration from expanding U.S. offshore drilling.
"Until we learn what happened, I'm asking that you also call for an immediate halt to test wells and all other exploratory operations in coastal waters," Nelson said in a letter to Obama released by his office
What’s the trade?
I’m long calls in BP and RIG , says Karen Finerman. I think the market penalized both names too much. But I’d only play the space with calls so you know your downside.
I don’t like the fact that there are so many unknowns, adds Pete Najarian. I agree that if you’re going to trade this event do it with options.
FIRST ON FAST: DENDREON CEO
A first-of-a-kind prostate cancer treatment from Dendreon that uses the body's immune system to fight the disease received federal approval Thursday.
The news sent the stock soaring.
Doctors have been trying to develop such a therapy for decades, but it’s Dendreon’s drug – called Provenge – that was first to win approval.
"I suspect within five to ten years immunotherapies will be a big part of cancer therapy in general," said Dr. Phil Kantoff, a professor of Harvard Medical School who helped run the studies of Provenge.
Currently doctors treat cancer by surgically removing tumors, attacking them with chemotherapy drugs or blasting them with radiation. Provenge offers an important fourth approach by directing the body's natural defense mechanisms against the disease.
The drug is intended to treat prostate cancer that has spread elsewhere in the body and is not responding to hormone therapy.
Medical specialists hailed the approval as an important milestone, but stressed it will serve as an addition to current practice, not a replacement.
"This is just one step in a new pathway for treating patients," said Dr. Simon Hall, chairman of urology at Mt. Sinai Hospital "We have to make them realize this isn't a cure, it's very variable."
What else must you know about this medical milestone? Get all the details from Dendreon CEO Mitchell Gold in the video above.
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Trader disclosure: On Apr 29, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (INTC), (GS), (AGU), (BTU), (NUE), (MSFT), (C); Karabell Owns (GOOG), (AAPL), (RIMM), (GS); Grasso Owns (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X); Najarian Owns (AKAM) Call Spread; Najarian Owns (C) Calls; Najarian Owns (CBS) Call Spread; Najarian Owns (CELG); Najarian Owns (GOOG) Calls; Najarian Owns (JEF) Calls; Najarian Owns (KGC) Calls; Najarian Owns (PFE); Najarian Owns (PG) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (XOM) Call Spread; Finerman's Firm Is Short (IJR), (IWM), (MDY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman Owns (GOOG); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (MCD); Finerman's Firm And Finerman Own (RIG), (RIG) Calls; Finerman's Firm Owns (YUM); Finerman's Firm Owns (GLW); Najarian Owns (XOM) Call Spread; Stutland Owns (GLD) Using Bull Option Spreads; Kelly Owns (FXE) Puts; Kelly Owns (AUY) Calls
For Anthony Scaramucci
Scaramucci Owns (AAPL), Skybridge Owns (AAPL); Scaramucci Owns (BAC), Skybridge Owns (BAC); Scaramucci Owns (C), Skybridge Owns (C); Scaramucci Owns (GOOG), Skybridge Owns (GOOG); Scaramucci Owns (GS), Skybridge Owns (GS); Scaramucci Owns (HPQ), Skybridge Owns (HPQ); Scaramucci Owns (INTC), Skybridge Owns (INTC); Scaramucci Owns (JPM), Skybridge Owns (JPM); Scaramucci Owns (MCD), Skybridge Owns (MCD); Scaramucci Owns (VIA.B), Skybridge Owns (VIA.B); Scaramucci Is Long U.S. Dollar, Skybridge Is Long U.S. Dollar; Scaramucci Owns (MRK), Skybridge Owns (MRK)
For Maynard Um
UBS AG, Affiliates Or Subsidiaries Own 1% Or More Of (AAPL)
(DELL), (HPQ), (MOT) Is Or In Past 12 Months Has Been An Investment
Banking Client Of UBS Securities LLC
(AAPL), (DELL), (MOT) Is Or In Past 12 Months Has Been A Client Of UBS Securities LLC (Non-Securities Services)
UBS Securities LLC Has Received Compensation From (AAPL), (DELL), (HPQ), (MOT) In Past 12 Months
For Brian Stutland
Stutland Equities Is A VIX Market Maker, Has A Long Position, Is Short Volatility
For Brian Kelly
Kanundrum Capital Owns (AUY)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (TLT)
Kanundrum Capital Owns U.S. Dollar
Kanundrum Capital Is Short (DB)
Kanundrum Capital Is Short (BCS)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Franc
Kanundrum Capital Is Short (CLF)
Kanundrum Capital Is Short (AA)
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 (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)
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