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Halftime Pt. 2: Terranova: Rotate Out of Anadarko, Into This Stock

Wednesday, 14 Jul 2010 | 1:29 PM ET

The time to rotate out of BP and Anadarko is now, says Joe Terranova of Vitrus Investment Partners in response to breaking news reported by CNBC's Melissa Lee during Wednesday's Fast Money Halftime Report.

A House committee on natural resources approved an amendment Wednesday, which would likely prohibit BP from obtaining new leases in off-shore drilling for the next seven years, Lee reports. The amendment does not specifically name BP, but Lee reports the amendment requires companies to prove they have paid in-full damage and clean-up costs for any oil spill. In addition, they must prove they have not been assessed more than $10 million in civil penalties and criminal fines for violations of the federal water pollution act in the past seven years.

"Now it is time to move on from BP," says Joe Terranova of Virtus Investment Partners. "It is time to move on from Anadarko... move onto the next trade."

He recommends rotating out of the aforementioned companies and into New York City-based Hess.

"Oil prices are still going up (and) I think they're going higher, but don't use Anadarko, don't use BP as medium to get long energy," says Terranova.

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ANALYST: CHINA DATA WILL BE SURPRISINGLY STRONG

Asian markets pushed higher ahead Chinese economic data set to be released Wednesday night, which should provide a first look at China's second-quarter gross domestic product and inflation.

Take Your Position: Financials
Financials are trading to the downside ahead of bank earnings. How should you position yourself in the sector? The Fast Money crew and David Riedel, of the Riedel Research Group, share their views.

Inflation will be slightly higher than what people are looking for, says David Riedel, president of Riedel Research Group. Citing a Chinese consumer confidence survey, he says prices could be up as much as 6%, but he thinks that's "a little aggressive." He expects the consumer price index to be around 3.5% or 4%.

"I think industrial production at 15%, 16% growth is going to be very impressive," says Riedel, adding that retail sales will be the "real number" to focus on and expects 19% growth. "That's where the Chinese economy is headed and those retail sales numbers are a very important marker of how they're going to get there."

What's the Trade?

You want some inflation in China, says Zachary Karabell of RiverTwice Research, because without inflation, you don't have rising consumer spending. China's long-term expansion, particularily in the domestic consumption market is underestimated, he says.

Brian Kelly of Kanundrum Capital has some concerns over some Chinese banks and various loans, but says "if they can make this into a consumer-driven economy, the longterm story is intact."

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CALL TO THE FLOOR: HEINZ

Shares of iconic US food company H.J. Heinz are up 24% in the last year, but can this growth continue in a weakening macro environment? CEO Bill Johnson joined us live on Wednesday's Fast Money Halftime Report for the answer.

Call to the Floor: Heinz
Shares of Heinz are up 24% in the last year. Heinz CEO Bill Johnson discusses the company's success and growth outlook with the Fast Money crew.

In North America, Johnson says consumers continue to buy branded foods, as they realize brands are more dependable. He's not sure if the worst of the recession is behind us and says he's watching a lack of clarity and confidence are two things they are watching. Johnson says there is a "dramatic shift" outside of the US, where his Asian and emerging market businesses grew in double-digits.

Watch the video to see the full interview with Johnson.

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POLL OF THE DAY

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Trader disclosure: On July 14, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Karabell Owns (FXI); Karabell Owns (GS), River Twice Capital Owns (GS); Karabell Owns (BP); Karabell Owns (CSCO), River Twice Capital Owns (CSCO); Karabell Owns (GOOG), River Twice Capital Owns (GOOG); Karabell Owns (C); Kelly Owns (BP) Puts; Kelly Is Short (GS); Jon Najarian Owns (QCOM), Is Short (QCOM) Calls; Jon Najarian Owns (MSFT), Is Short (MSFT) Calls; Jon Najarian Owns (GS), Is Short (GS) Calls; Terranova Owns (GOOG), (AMZN), (MON), (APC), (SUN), (FCX), (GMCR), (MYL), (MRVL), (BAC), (ADI), (ADBE), (AKAM), (HES), (ABT), (CVS), (AXP), (EMC)

For Zach Karabell
River Twice Capital Owns (MSFT)
River Twice Capital Is Short (QQQQ)
River Twice Capital Is Short (SPY)

For Briann Kelly
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (BIG)
Accounts Managed By Kanundrum Capital Own (ELX)
Accounts Managed By Kanundrum Capital Own (QLGC)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Are Short (JOE)
Accounts Managed By Kanundrum Capital Are Short (FXI)
Accounts Managed By Kanundrum Capital Are Short (XLF)
Accounts Managed By Kanundrum Capital Are Short (XLI)
Accounts Managed By Kanundrum Capital Are Short (USO)

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 (CASS)
Virtus Investment Partners owns more than 1% of (LDR)
Virtus Investment Partners owns more than 1% of (LPHI)
Virtus Investment Partners owns more than 1% of (MGRC)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLP)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLK)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (SUBK)
Virtus Investment Partners owns more than 1% of (WDFC)
Virtus Investment Partners owns more than 1% of (YDNT)
Virtus Investment Partners owns more than 1% of (DRYS)

CNBC.com with wires

  Price   Change %Change
APC
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BP.
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HES
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HNZ
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AAPL
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