Empty bottles of antacid piled sky high in waste baskets lined Wall Street Friday, as investors struggled to make sense of a very unpredictable and therefore perilous stock market.
After fearing that a stalemate in Europe would turn Greece into ‘Lehman Part 2’, the market rallied after comments suggested European leaders understood the urgency of the situation.
Adding to the tailwinds, a key gauge of future U.S. economic activity rose more than expected in May to a record high. Specifically, the independent Conference Board said on Friday its Leading Economic Index increased 0.8 percent to a record high of 114.7. Economists had expected a rise of 0.2 percent. For some investors, this piece of economic data is valued above all others because it's forward looking.
However, consumer sentiment numbers came in worse than expected with Americans particularly concerned about work prospects. The results reminded investors that unemployment remains stubbornly high and without jobs, the recovery will be challenged.
If there's one thing to take away from these developments - it's that both the bulls and the bears have powerful catalysts on their side. But who wins?
Instant Insights with the Fast Money traders
Trader Todd Gordon is squarely on the bullish side of the equation and thinks the worse of the sell-off may be over. He points to three technical indicators to support his thesis:
- The euro didn’t drop below its 30-day low. “From a technical perspective the euro is fine,” Gordon says. “And old trendline has served as support.”
- Commodity currencies used as risk barometers for the market are good. The currencies of Norway and Australia tend to be leading indicators for equities. Those two currencies are in an uptrend since the March 16th low on the S&P.
- Technicals suggest $91 looks like support for oil .
All told, "these signs tell me that the risk trade is healthy," Gordon says. He suggests positioning for higher equities and higher oil.
OptionMonster Jon Najarian is also a buyer – but a strategic buyer. He thinks, for the time being, that the stock market is stuck in a range. “I’m a buyer of dips and a seller of rips,” he says. “I’m not going to chase the rally now, but if we go down to 1257 – flat on year, then I’m a buyer.
Patty Edwards points to positive signs emerging in handful of stocks related to global growth - "Expeditors, TAL and rail stocks look like they’re bottoming," she says. That gives me a little hope. That said, I’m not a buyer of the rally (broadly.)"
Trader Steve Grasso thinks recent gains are nothing more than a dead cat bounce. He says his clients are not buying risk assets. “For risk to be on we need to see money flow out of utilities and into higher risk assets. I’m not seeing that.”
Trader Stephen Weiss just can’t get on board. He’s a seller of the rally – flat out. He thinks Greece has distracted the market from something far more important – fundamentals. “And fundamentals are not good,” he says. “And neither are the internals of the market.”
BROKEN THUMBS: RESEARCH IN MOTION PLUNGING
Shares of Research in Motion fell sharply on Friday after the Blackberry maker posted dismal results and failed to offer a clear strategy for future growth.
As you might expect, the report triggered a slew of Street revisions. They follow:
Firm Rating Change
JPMorgan Cut to ‘neutral’
Citi Cut to ‘sell’
MKM Partners Cut to ‘neutral’
Caris & Co. Cut to ‘average’
With the stock trading near 5-year lows, you may be interested in taking a shot. However, Steve Grasso counsels playing it with options, to limit your risk.
Oil prices fell Friday with energy investors worried about the strength of the US economy and the ripple from the debt crisis in Europe.
What’s the trade?
Patty Edwards tells the desk she’s hearing oil wants to go to $85. “If you must put money to work in this space she says look at Exxon or COP which pay dividends.
If you think oil prices are heading lower, Steve Grasso suggests playing retail for a bounce.
CALL TO THE FLOOR: ATMEL
As we mentioned above, RIM was among the worst performing stocks in the S&P after reporting terrible earnings.
And while RIM’s Playbook continues to disappoint, other new tablets are on the rise are starting to challenge Apple's iPad for the top spot.
And almost all of them have something in common: Atmel.
What must you know about this company? Find out from Atmel CEO Steve Laub. Watch the video now!
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Trader disclosure: On June 17, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephen Weiss Owns (TWM), (SDS), (QCOM), (JPM), (EMC), (TEVA), (MSFT), (MDRX), (HAIN), (MRK), (NS), (ETP), (MDT), (UUP), (HK), (DVN), (COP) and (AKAM). Stephen Weiss Is Short (X). Stephen Weiss Is Short (FLR). Stephen Weiss Is Short (FWLT). Stephen Weiss Is Short (SHAW). Stephen Weiss Owns (USO) Puts. Patty Edwards Owns (FXC) and (XLK). Steve Grasso Owns (AKS), (AMD), (ASTM), (BA), (BAC), (C), (D), (HOV), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE) and (PRST). Jon Najarian Owns (BJ) Call Spreads. Jon Najarian Owns (CTXS) Call Spreads. Jon Najarian Owns (GS) Call Spreads. Jon Najarian Owns (YOKU) Call Spreads. Jon Najarian Owns (UA) Call Spreads.
Edwards Owns (GOOG) For Clients
Edwards Owns (SDS) For Clients
Edwards Owns (SPY) For Clients
Edwards Owns (QQQ) For Clients
Edwards Owns (COST) For Clients
Edwards Owns (BMO) For Clients
Edwards owns (COP) for clients
Edwards owns (TGT) for clients
Edwards owns (TAL) for clients
Stuart Frankel & Its Partners Own (ABX)
Stuart Frankel & Its Partners Own (CSCO)
Stuart Frankel & Its Partners Own (CUBA)
Stuart Frankel & Its Partners Own (GERN)
Stuart Frankel & Its Partners Own (HPQ)
Stuart Frankel & Its Partners Own (HSPO)
Stuart Frankel & Its Partners Own (MU)
Stuart Frankel & Its Partners Own (MSFT)
Stuart Frankel & Its Partners Own (NYX)
Stuart Frankel & Its Partners Own (PFE)
Stuart Frankel & Its Partners Own (PFST)
Stuart Frankel & Its Partners Own (SDS)
Stuart Frankel & Its Partners Own (UAL)
Stuart Frankel & Its Partners Own (XRX)
Stuart Frankel & Its Partners Are Short (QQQQ)
Stuart Frankel & Its Partners Are Short (AAPL)
Accounts Managed By Aspen Trading Group Are Short EUR/CAD
Sandler O'Neill Expects To Recieve/Seek Investment Banking Compensation From (BAC), (BK), (C), (JEF), (JPM), (NTRS) In Next 3 Months
Sandler O'Neill Has Recieved Non-Investment Banking Compensation From (BAC), (C), (GS), (JPM), (MS), (NTRS)
(BAC), (BK), (C), (GS), (JPM), (MS), (NTRS) Is A Non-Investment Banking Client (Securities-Related Services) Of Sandler O'Neill
Sandler O'Neill Has Received Investment Banking Compensation From (C), (JPM) In Past 12 Months
(C), (JPM) Was An Investment Banking Client Of Sandler O'Neill
Sandler O'Neill Is A Market Maker In (NTRS)
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