"Investors are very sensitive to a possible deterioration in credit, after what happened in 2008, 2009," says Marshall Front, chairman of investment firm Front Barnett Associates in Chicago.
Comments made on the conference calls with analysts could be crucial in setting the tone, says Anthony Polini, analyst at Raymond James. The executives could spook investors - by saying demand for loans is weak - or they could help shares bounce back with positive comments about credit line utilization picking up, for example, he says.
How should you position?
In the space I like BofA, says Joe Terranova. But it's because I expect their acquisition of Merrill will boost profits.
TAKE YOUR POSITION: CSX
On the transports side, the traders think CSX will be the stock to watch with Pete Najarian already spotting some heavy activity in the name.
What’s the trade?
I’ve spotted a great deal of call buying ahead of CSX earnings, says Najarian. That suggest options investors are expecting a move higher.
TAKE YOUR POSITION: YUM
Mark Kalinowski, an analyst at Janney Capital Markets rates Yum a "Buy," based mostly on the company's growth potential outside the United States.
He expects solid results from Pizza Hut but he expects revenue to slip at Taco Bell and possibly at KFC.
What’s the trade?
I like Yum!, says Patty Edwards. I find the story pretty interesting.
FAST MONEY POLL OF THE DAY
What do you think? We want to know!
Earnings may be a big part of next week's action, but they're not the only thing on Fast Money's radar. Here are some other catalysts worth watching:
UNUSUAL ACTIVITY: ALTR
Pete Najarian has spotted unusual options action in Altera .
An unusually largenumber of August 28 calls traded on Friday, he explains.
TRADE TO GO: PHILIP MORRIS
Patty Edwards suggests putting Philip Morris on the radar.
They should benefit from a stronger euro and at 13 times, it’s attractive, she says.
TOPPING THE TAPE: ANADARKO
Anadarko topped the tape Friday with the stock experiencing sharp gains; the move comes in the wake of word Anadarko management notified BP it will withhold reimbursement on cleanup costs.
What should you make of it?
If you’ve been riding Anadarko gains I’d take half off the table, counsels JoeTerranova I think there’s more upside, but the stock is up 26% over the past 5 days.
Citi has a buy rating on the stock and a target price of $75 a share, adds host Melissa Lee.
CALL THE CLOSE:
Steve Grasso: I’m bullish tobacco and bearish on overall market.
Joe Terranova: I’d get long the laggards.
Patty Edwards: I’m on the sidelines watching carefully.
Pete Najarian: I think we stay flat.
CALL TO THE FLOOR: CLOUD COMPUTING
With IT spending on an upswing, investors are looking at all the latest tech trends trying to determine which are most likely to attract a flood of new cash.