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Pros: Headwinds Blowing, Banks Challenged?

Banks stocks landed in the spotlight on Wednesday as investors parsed through results from JPMorgan in an effort to place their bets on rivals – ahead of a deluge of bank earnings.

Just take a look at what’s coming:

Monday: Citi, KeyCorp
Tuesday: Goldman, USB, Regions
Wednesday: Huntington, Wells Fargo
Thursday: BB&T, Morgan Stalney, PNC, First Third

At first investors were cheered by JPMorgan results, with the bank topping expectations due to solid growth in investment banking fees and a drop in credit card losses.

However, real estate woes still lingered with CEO Jamie Dimon, saying the bank’s mortgage losses were “extraordinarily high.” And, "the losses will continue for a while.”

How should you position? What’s the trade?

Instant Insights with the Fast Money traders

Trader Brian Kelly is bearish. After digging down into the numbers, he found loan growth to be an issue.

Behind The Numbers: JPM Loan Growth
1Q 2010: Commercial Loans + 1.3%
4Q 2010: Commercial Loans + 0.8%

"Loan growth just isn’t there," he says. To support his thesis he points to the latest survey by the NFIB which shows small business grew less optimistic about the economy in March. “That’s where the growth needs to come from. Large corporations have plenty of access to capital. It’s the small businesses that really need to start picking up. I’m short the XLF,” he says.

Trader Pete Najarian concedes that banks may be challenged. Not only is he concerned about growth but he’s also troubled by dividend yields. “The problem is yields are not back,” he says. “Look at Canada at banks such as Bank of Montreal and you’ll find 4% to 4.5% dividend yields.” He says here in the states bank stocks don't generate nearly that much yield. “I would not short them, but that’s the problem going higher,” he says.

If you’re looking for a stock pick, trader Patty Edwards shares Najarian’s enthusiasm for Bank of Montreal. That’s where she suggests putting money to work.

Trader Steve Grasso is focused on Citi . But he’s waiting for the reverse split. “I believe that Citi will be higher a couple years from now but I don’t think it will be able to withstand the pressure from the reverse split. I’m watiting to put money into this name.”

Also Grasso thinks action in the broad market is concering for financials. He says the S&P is trading below its 50-day which is 1314. With the broad market coming under pressure, he expects the tape will drag financials lower.

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TECH SPOTLIGHT

In addition to banks, the traders were focussed on tech with earnings from search giant Google due Thursday.

What's the tech trade?

Pete Najarian likes playing the space with storage and data delivery names. He's got VMWare, EMC, Netapp and Seagate on his radar for "good positive news flow."

Although Brian Kelly agrees the cloud space is growing but he thinks the semi conductors are challenged. He's short the SMH.

Steve Grasso is disgusted with Cisco. "I'm a seller on any spike higher," he says.

Patty Edwards suggests "going for something like an Akamai which has sold off or Oracle which is working."

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CALL OF THE DAY: JEFFERIES SAYS BAIDU TO JUMP 40%

Again, Baidu landed on the trader radar this time because Jefferies initiated coverage with a ‘Buy’ and $200 price target.

Despite the stocks massive run Patty Edwards thinks the company has so much potential that valuations remain attractive. "You might want to take a flier," she says.

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COPPER PRICES TO REMAIN RANGEBOUND THIS YEAR: GOLDMAN

If you’re waiting for copper to break out you might want be here a while. According to Goldman Sachs the red metal will remain range bound for quite some time.

What’s the trade?

Brian Kelly is bearish but not because of Goldman. He's points to reports that suggests people in China are using copper as collateral for investments.

In a recent Reuters report, Codelco CEO Diego Hernandez expressed similar concerns. "It's not normal. There is something going on. (Copper) stocks are high and some people believe the stocks are being used as a financing tool."

If something other than supply and demand fundamentals are driving the price of copper, the industry faces an enormous surplus. "The trade is short," says Kelly.

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ANALYZE THIS: WTI/BRENT SPREAD

If you watch Fast regularly you may remember that on Monday strategic investor Dennis Gartman told us "If you're going to be a seller, sell WTI but if you're going to be a buyer buy Brent," Gartman says.

Find out why he's bullish one and bearish the other. Watch the video now!


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Trader disclosure: On April 13, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova owns (AKAM), (XOM), (VRTS), (C), (BAX), (TCK), (JPM), (UPL). Pete Najarian owns (PFE). Pete Najarian owns (TCK). Pete Najarian owns (AAPL). Pete Najarian owns (AKAM). Pete Najarian owns (C). Pete Najarian owns (HK). Pete Najarian owns (HPQ). Pete Najarian owns (TEVA). Pete Najarian owns (MS). Pete Najarian owns (RSX). Pete Najarian owns (GE). Pete Najarian is long (RIMM) calls. Pete Najarian is long (AVL) calls. Pete Najarian is long (EWZ) calls. Pete Najarian is long (HUN) calls. Pete Najarian is long (ICO) calls. Pete Najarian is long (MYL) calls. Pete Najarian is long (NTAP) calls. Pete Najarian is long (XLF) calls. Pete Najarian is long (PMCS) calls. Pete Najarian is long (BIG) calls. Pete Najarian is long (CVS) calls. Pete Najarian is long (XL) calls. Pete Najarian is long (WFT) calls. Pete Najarian is long (JOYG) calls. Pete Najarian is long (MYL) calls. Pete Najarian is long (AXL) calls. Pete Najarian is long (BSX) calls. Pete Najarian is long (HBC) calls. Pete Najarian is long (STI) calls. Pete Najarian is long (TYC) calls. Steve Grasso owns (BA), (C), (CSCO), (PFE), (JPM), (BAC), (AMD), (ASTM), (LPX), (PRST), (D), (LIT), nasdaq and (XMHYX).

Patty Edwards
Edwards is long (BMY) for clients
Edwards is long (TEVA) for clients
Edwards is long (AAPL) for clients
Edwards is long (TGT) for clients
Edwards is long S&P 500 for clients
Edwards is long nasdaq 100 for clients
Edwards is long gold for clients
Edwards is long silver for clients
Edwards is long (PGM) for clients
Edwards is long (ORCL) for clients
Edwards is long (AKAM) for clients
Edwards is long (BMO) for clients
Edwards is long (MSFT) for clients

Steve Grasso
Stuart Frankel & Co and its partners own (AMD)
Stuart Frankel & Co and its partners own (AOL)
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 (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (MSFT)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
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 are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

Brian Kelly
Accounts Managed by Kanundrum Capital are long (EBAY)
Accounts Managed by Kanundrum Capital are long (VLO)
Accounts Managed by Kanundrum Capital are long (TBT)
Accounts Managed by Kanundrum Capital are long (DBA)
Accounts Managed by Kanundrum Capital are long (GLD)
Accounts Managed by Kanundrum Capital are long (SLV)
Accounts Managed by Kanundrum Capital are long (TSN)
Accounts Managed by Kanundrum Capital are long (CLF) puts
Accounts Managed by Kanundrum Capital are long (SPY) puts
Accounts Managed by Kanundrum Capital are long VIX calls
Accounts Managed by Kanundrum Capital are long wheat futures
Accounts Managed by Kanundrum Capital are long soybean futures
Accounts Managed by Kanundrum Capital are long natural gas futures
Accounts Managed by Kanundrum Capital are long gold futures
Accounts Managed by Kanundrum Capital are long silver futures
Accounts Managed by Kanundrum Capital are short (XLF)
Accounts Managed by Kanundrum Capital are short (SMH)
Accounts Managed by Kanundrum Capital are short bond futures

Dennis Gartman
Funds managed by Dennis Gartman are long crude
Funds managed by Dennis Gartman are long corn



CNBC.com with wires.

Symbol
Price
 
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%Change
S&P 500
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AKAM
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BIDU
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BMO
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C
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CSCO
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EMC
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JPM MLP ETN
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NTAP
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ORCL
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STX
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VMW
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SPDR FIN SEL
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GOOGL
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MV SEMI
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