My trade on Europe is buy the rumor and sell the fact, says Joe Terranova. But looking at the US markets I see no reason to pair back long positions. I consider strong earnings reports from Caterpillar and other industrials as well as GE’s dividend increase signs the recovery is in tact. It says to me to stay long.
When I look at Europe's banks, personally, I feel like there’s a lot more digging that needs to be done. If regulators aren’t really stressing banks then the results don’t tell us anything. But if you're looking for a trade look at a long position in a US company; McDonald's . On the pullback I'm lovin' it!
The inflection point for Europe’s bank stocks isn’t now, explains widely followed analyst Dick Bove of Rochdale. It occurred back in March. That’s when banks started to move up sharply. This stress test has no value; in March they passed a real world stress test when we saw money flow back into the banking system, junk bond yields coming down, and reasonable interest rates.
EUROPE RESULTS A CLOSER LOOK
Looking at the results a little more closely failures in European bank stress tests were concentrated in Spain, with several savings banks failing according to data released by various national authorities across the European Union Friday.
Only one government-owned bank in Germany failed the stress tests, while French top banks, Portuguese Italian, Finnish and Swedish top banks all passed.
The German bank is nationalized Hypo Real Estate bank, and officials said because the bank's special situation, it should have not been included in the tests.
Greece's ATEBANK also failed.
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Trader disclosure: On July 23, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns Coper; Terranova owns (FCX); Terranova owns (MOS); Terranova owns (GLD); Grasso owns (BAC), (BA), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO)
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