GO
Loading...

Halftime: Investors Becoming Inured to External Shocks from Egypt?

On Monday stock investors shrugged off unrest in Egypt and drove the S&P higher despite signals that the situation was getting worse.

Uprisings in Cairo continued with protestors defying curfews and calling for a million-man march as well as an indefinite general strike.

Over the weekend, buildings were set on fire and clashes continued between protesters and the government. The crisis in Egypt has left dozens dead and hundreds injured.

In the wake of the protests, General Motors Egypt and Nissan halted production, while French cement company Lafarge and German utility company RWE said they were evacuating some employees and their families.
Nonetheless, both the S&P and Dow traded higher with American investors more focused on earnings.

That led Fast Money host Melissa Lee to pose the question, ”Are investors becoming inured to external shocks from Egypt and elsewhere?”

Instant Insights with the Fast Money traders

Zach Karabell effectively says yes.

He takes the positive action in the S&P as a sign of "maturity and sobriety after 2 years where the slightest whiff of anything would send panic into the market.”

Brian Kelly feels differently. He reminds that “The Dow was down almost 2% last week, this isn’t that much of a rebound," he says. In fact, Kelly is putting both feet squarely into his bear costume again. “With all the money that’s coming out of emerging markets I’d think the Dow should be up 200 points and its not.”

Pete Najarian admits he’s surprised that the market is performing so well. “It is surprising to see the rest of the market find a bid so rapidly,” he says. However he's counsels caution. "With the Volatility Index above the 50-day and 100-day moving averages, that's concerning," he says.

Steve Grasso is a buyer of the market but a cautious buyer. He’s watching 1288 in the S&P as a key level. “That would be the 50% retracement from Friday’s move lower," he explains. Although his bias is higher he expects it to be a “slow-go.”

Meanwhile Jeff Saut, chief investment strategist at Raymond James, says in a Retuers interview, "I think it would take more than protests in Egypt to take this market down. The earnings continue to come in better than expected, but I am looking for a correction."

CNBC’s Kate Kelly suggests putting Noble energy on the radar. “They have two gas reserves off the coast of Israel,” she says in the live interview. “They have not come online yet, but if Egypt deteriorates this could be an important alternative to Israel.”

-----------

INTEL FINDS CHIP FLAW

The Fast traders were also watching the action in chip stocks after Intel said it found a defect in one of its chips, hurting its credibility at a time when demand for microprocessors in personal computers is being threatened.

Although the company said on Monday it is fixing the problem, it stopped shipments of the chip, which is used in PCs with its most advanced Sandy Bridge line of chips.

Intel cut its first-revenue forecast by $300 million. It expects the total cost to repair and replace the chip to be about $700 million.

What's the trade?

Pete Najarian is cautious of the space broadly after recent gains. "After such a big run, I don’t know what the next positive catalyst for chips stocks could be," he says.

Rather than play Intel, Craig Berger at FBR suggests looking elsewhere. "I’d rather be exposed to Broadcom or Qualcomm; both have a very high tablet and smartphone exposure," he says. (Smartphones and tablets are slowing the PC growth rate.)

-----------

M&A DEAL FLURRY

Energy traders are chattering about the latest big deal in the space. Over the week-end, Alpha Natural Resources agreed to acquire Massey Energy for a approximately $69.33 a share. That represents a 21 percent premium over Massey's closing share price of $57.23 on Friday.

In the wake of the news, shares of rival coal mining companies rose on speculation of a wave of consolidation in the industry.

What’s the trade?

My first instinct was that this was a top tick in the coal market and it’s time to start looking toward natural gas, says Brian Kelly. If coal prices rise, nat gas becomes a more attractive option.




______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Jan. 31, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MT), (MHY), (NDAQ), (PFE), (PRST) and (S). Pete Najarian owns (F) calls and bonds. Pete Najarian owns (V) call spreads. Pete Najarian owns (YHOO). Pete Najarian owns (MS). Pete Najarian owns (JPM) call spreads. Pete Najarian owns (C). Pete Najarian owns (BAC) call spreads. Pete Najarian owns (GE). Pete Najarian owns (TCK). Karabell owns (FCX), (BRCM), (CSCO), (GE), (FXI), (C), (AAPL), (GOOG), (GS) and (RIMM).

Comcast is the parent company of CNBC
Comcast is the parent company of NBCUniversal
GE owns 49% of NBCUniversal
GE owns 49% of CNBC

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (ARMH)
Accounts Managed By Kanundrum Capital Own (ATW)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (BAC)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (LYC.AU)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Own (TER)
Accounts Managed By Kanundrum Capital Own (YGE)
Accounts Managed By Kanundrum Capital Own (DBA)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (GMCR) puts
Accounts Managed By Kanundrum Capital Are Short (XLF)

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (ABX)
Stuart Frankel & Co and its partners own (CSCO)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NEM)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own (S)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

ZACHARY KARABELL
River Twice Capital Owns (BRCM)
River Twice Capital Owns (CSCO)
River Twice Capital Owns (MSFT)
River Twice Capital Owns (QCOM)
River Twice Capital Owns (GS)
River Twice Capital Owns (IBM)
River Twice Capital Is Short (SPY)
River Twice Capital Is Short (SMH)
River Twice Capital Is Short (XLF)
River Twice Capital Is Short (XLI)

CRAIG BERGER
FBRCM acts as a market maker or liquidity provider for (INTC)
FBRCM acts as a market maker or liquidity provider for (BRCM)
No disclosures in (AMD)

KAREN FINERMAN SOT 12/13/2010
Finerman had no disclosures in (MEE) on 12/13/2010




CNBC.com with wires.

Symbol
Price
 
Change
%Change
DJIA
---
S&P 500
---
ANR
---
BRCM
---
INTC
---
QCOM
---
VIX
---
MV SEMI
---

Featured

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET