With stocks rising for the third day in a row, how should you trade this market? Following are some of the developments that our pros suggest watching.
FINANCIALS RALLY ON GEITHNER COMMENTS
Financials picked up steam on Thursday with Bank of America and Morgan Stanley both posting sharp gains after Treasury Secretary Tim Geithner said major U.S. banks and money market funds have little direct exposure to European debt and that a Lehman-like implosion isn’t likely to happen. Also, the ECB launched fresh liquidity measures to help banks weather the euro zone's debt crisis.
What’s the bank trade?
Guy Adami is skeptical of banks. “I don’t think Geithner knows any more than I know. How could he say anything else but what he said?”
Pete Najarian is a little more optimistic. ”At the time of Lehman we saw big out of the money put buying and we’re not seeing that now,” Najarian says. “In fact I’m seeing big interest in the 13 and 14 strike in the XLF – those are upside calls.”
CITI CUTS GOOG, AOL, DEMAND MEDIA TARGETS
On Thursday Citigroup analyst Mark Mahaney lowered his price targets on a handful of Internet stocks including Google, Akamai and AOL ; however, he says the reduction reflects lower multiples, not lower earnings.
Target Price Old New
Akami $27 $24
AOL $18 $15
Google $690 $575
Demand Media $10 $8
Source: Citi Investment Research
What’s the trade?
In this space, I think Google is so cheap it’s attractive, says Karen Finerman.
Google has trouble around $600, adds Guy Adami. But I think it could trade up to $550 from here.
If you’re looking for a trade, Intel may be vulnerable, adds Tim Seymour. It’s currently near a level of past resistance.
OIL STOCKS ON FIRE
If you’re in the market for fast money hopefully you’ve been playing energy. Over the past few days some refiners have shot higher.
Just take a look at the action in Marathon and HollyFrontier . Both are around 20% higher in only 3 days.
How should you trade it?
Paul Sankey of Deutsche Bank tells us that these stocks have been taken to the woodshed and that recent gains are “ really just a relief bounce but one that’s underpinned.”
So, what does he have to say about the refiners long term? Watch the video and find out now!
METALS RALLY, TIME TO BUY FCX? AA?
Hard to ignore materials stocks, which have been on a tear over the past few days.
And buyers include some of the smartest money out there. Street chatter suggests Pershing Square's Bill Ackman has taken a stake in Alcoa .
What should you make of it?
Top trader Dan Dicker thinks Bill Ackman is betting on a fundamental shift. “There’s an incredible amount of substitution from copper to aluminum and from steel to aluminum,” he says. ”Alcoa is beaten down and somebody like Ackman can get in with a big share.” But, Dicker cautions, “it’s a slow money trade.” Click here to see our entire conversation with Dan Dicker.
APPLE AFTER STEVE JOBS
Up and down Wall Street pros are mourning the passing of Apple CEO Steve Jobs and discussing what will be his legacy?
Market strategist James Altucher and managing director of Formula Capital says Apple will probably be the first company to have a market cap of $1 trillion.
Get all the details. Watch the video now!
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Trader disclosure: On Oct 6, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Najarian is long AAPL; Najarian is long C; Najarian is long MSFT; Najarian is long MS; Najarian is long HPQ; Najarian is long MS; Finerman owns AAPL; Finerman owns BKS; Finerman owns GOOG; Finerman owns JPM; Finerman owns MSFT; Finerman owns ORCL; Finerman owns GLW; Finerman’s firm owns AAPL; Finerman’s firm owns BAC; Finerman’s firm owns JPM leaps & puts; Finerman’s firm owns MSFT; Finerman’s firm owns M; Finerman’s firm owns TGT; Finerman’s firm owns GLW; Seymour is long BAC; Seymour is long INTC; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Dicker is long AA; Dicker owns oil options
For Paul Sankey
Exxon Mobil is a client of Deutsche Bank and has received compensation from Exxon
Chevron is a client of Deutsche Bank and has received compensation from Chevron
ConocoPhillips is a client of Deutsche Bank and has received compensation from ConocoPhilips
Hess Corp is a client of Deutsche Bank and has received compensation from Hess Corp
Marathon Oil is a client of Deutsche Bank and has received compensation from Marathon Oil
Murphy Oil is a client of Deutsche Bank and has received compensation from Murphy Oil. Deutsche Bank owns 1% or more of MUR
Marathon Petroleum Corporation is a client of Deutsche Bank
HollyFrontier Corporation is a client of Deutsche Bank
For Doug Kass
Kass is long TBT
Kass owns INC
Kass owns PRU
Kass owns MET
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