Stocks were unable to hold onto early gains Tuesday after euro weakness reminded investors that the global recovery was very much in question.
The semi names experienced some of the heaviest selling with chatter suggesting overseas sales of computers and gadgets won’t live up to estimates.
Considering these catalysts, it may surprise you to hear Sterne Agee initiated coverage of Apple with a 'Buy' rating and $300 price target. The call certainly received a lot of attention from the Fast Money desk; Apple typically generates large sales from Europe.
What must you know?
In a live interview, analyst Vijay Rakesh tells Fast Money he’s bullish Apple and expects the firm to remain a market leader for the next decade.
And despite concerns about a slowdown in consumer spending across Europe, he’s thinks Apple will remain unscathed. "We're not seeing any slowdown in sales in Apple products."
He's not worried about China slowing growth, either. "The proportion of iPhones is very small... and it will actually be a catalyst when they lower the price in China."
Ontop of that Rakesh thinks iPads going international should present another positive catalyst for the stock.
What’s the bottom line?
Apple looks to be firing on all cylinders, says Rakesh. We think this is a good entry point here. And in an investor note he adds, Apple should be a core holding of any portfolio.
What do you think? We want to know!
*Check out our entire interview with Vijay Rakesh in the video above.
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MARKET MUSINGS
Looking that the market broadly, both the Dow and S&P traded lower around lunchtime.
The negative sentiment may stem, in part, from Street chatter suggesting the Fed will still raise interest rates in the second half despite eurozone trouble.
What must you know?
The Fed can’t ignore Europe, muses Mike Gurka of Neural. But with that said inflation scenarios suggest to me the Fed will be pessimistic toward this market.
If you’re looking for a play, look at the Vix, counsels Pete Najarian. It looks like the Vix is tethered to 1130 on the S&P. If we breach that level, then I’d expect the Vix to spike.
I’m watching the chart of the GLD, explains veteran trader Gary Kaminsky. Patterns feel similar to what we saw in the Nasdaq pre-2000; that is a lot of retail money is coming in and that tends to happen very late.
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NO DEAL FOR YOU
Five months of negotiations come to a close on Tuesday with Macarthur coal rejecting Peabody's $3 billion takeover bid.
How should you trade it?
Peabody reduced its offer because of a new Australian tax, explains Pete Najarian. That had a lot to do with the deal collapsing. However, I do think that Peabody is looking to make a move – perhaps it will be domestic.
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CONSUMER CONTINUES TO SURPRISE
Investors are wondering if the consumer trade remains in tact with Walmart , TJX and Home Depot all reporting better than expected earnings this morning.
What’s the trade?
Walmart is a huge company, reminds Patty Edwards of Storehouse. The stock isn’t going to move that fast because a company that size can't move that fast. . If you’re looking for growth check out TJX.
I expect retail to do relatively better than other sectors because investors will hide here in fear of higher interest rates, adds Gary Kaminksy.
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UNUSUAL ACTIVITY: VERISIGN
Pete Najarian has spotted unusual options action in Verisign.
A large volume of June 30 and June 31 calls traded suggest to him the stock could make a sharp move higher.
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CALL THE CLOSE:
Pete Najarian: I’d own volatility at these levels.
Patty Edwards: I’d play dividend payers
Gary Kaminsky: I expect the S&P to close lower.
Mike Gurka: I would get short crude on any rally but I like the stock market.
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Trader disclosure: On May 18, 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 (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (AAPL), (BAC), (EEM); Terranova Owns (SWN); Finerman's Firm Is Short (IJR), (MDY), (IWM), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (JPM), (JPM) Call; Finerman Owns (JPM); Finerman's Firm Owns (KFT); Finerman's Firm Owns (SKS); Finerman's Firm And Finerman Own (TJX); Finerman's Firm Owns (WFC) Preferredl; Finerman's Firm Owns (WMT); Najarian Owns (AMD) Calls; Najarian Owns (C) Calls; Najarian Owns (HPQ), Is Long (HPQ) June Call, Is Short (HPQ) May Calls; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (V) Call Spread; Najarian Owns (AMD) calls; Najarian owns (HPQ), is short (HPQ) calls; Najarian Owns (VRSN) calls; Edwards Owns (VXX)
For Tim Seymour
Seygem Asset Management Is Short (EEM)
For Dennis Gartman
Funds Managed By Dennis Gartman Are Short (GS)
Funds Managed By Dennis Gartman Own (MMM)
Funds Managed By Dennis Gartman Are Short Gold
Funds Managed By Dennis Gartman Are Short British Pound Sterling
Funds Managed By Dennis Gartman Are Short Euros
Funds Managed By Dennis Gartman Are Short Yen
Funds Managed By Dennis Gartman Are Short Australian Dollars
Funds Managed By Dennis Gartman Are Long Canadian Dollars
For Anthony Scaramucci
Scaramucci Owns (BUD), Skybridge Owns (BUD)
For Patty Edwards
Edwards Owns (GLD) for clients
Edwards Owns (INTC) for clients
Edwards Owns (NVDA) for clients
Edwards Owns (HD) for clients
Edwards Owns (HPQ) for clients
Edwards Owns (DELL) for clients
Edwards Owns (MSFT for clients
Edwards Owns (AAPL) for clients
Edwards Owns (GOOG) for clients
Edwards Owns (VIX) for clients
Edwards Owns (SPY) for clients
Edwards Owns (QQQQ) for clients
For Vijay Rakesh
Sterne, Agee & Leach Is A Market Maker In (AAPL)
Sterne, Agee & Leach Has Managed Or Co-Managed An Offering Or Provided Investment Banking Services For (AAPL) In Past 12 Months
Sterne, Agee & Leach Has Security Accounts Open For (AAPL)
Sterne Agee Financial Services Has Clearing Agreements With (AAPL)
Rakesh owns (AAPL)
Sterne, Agee & Leach Or Affiliates Own 1% Or More Of (AAPL)
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