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Facebook Halo More Like a Lead Balloon: Grasso

Friday, 3 Feb 2012 | 1:39 PM ET

After Friday’s job report you’d be inclined to think the bulls are off to the races.

After all, the U.S. economy created jobs at the fastest pace in nine months and the unemployment rate dropped to nearly a three-year low of 8.3 percent.

From a fundamental perspective, investors can certainly make the argument that a stock market advance is warranted.

It entirely understandable to think bank stocks, industrials and materials companies , all have room to run. After all, they should benefit from an improving economy; something the strong jobs numbers would seem to confirm.

However trader Steve Grasso tells us that's not necessarily the case. He says there's an outlier in the market; a giant catalyst that could drag some stocks lower – and it’s an outlier that many retail investors don't think of as a bearish catalyst – the Facebook IPO.

“Facebook is going to be in the spotlight, we’re going to be talking about Facebook for the next couple months,” he says.

Huh? You'd think all the excitement surrounding the Facebook IPO would be good for the market; it should generate enthusiasm if nothing more.

But Grasso says that's not necessarily the case for stocks outside the tech sector.

"Sure, we’re going to be talking about the cloud and the Internet – those names will get a lot of attention,” he says. However, stocks and sectors that aren’t quite as sexy could get overlooked amid all the hype.

And in that kind of frenzied environment where the market is all about Facebook, "Names that you’d think should move higher, may not.”

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Trader disclosure: On Feb 3, 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 call spreads; Najarian is long BAC call spreads; Najarian is long PNC call spreads; Najarian is long GS call spreads; Najarian is long GDX call spreads; Najarian is long NFLX call spreads; Najarian is long RIMM call spreads; Najarian is long GNW call spreads; Najarian is long MOS call spreads; Grasso is long AVAV; Grasso is long ASTM; Grasso is long BA; Grasso is long D; Grasso is long LIT; Grasso is long MHY; Grasso is long MO; Grasso is long PFE; Grasso is long PRST; Grasso is long S; Grasso is long XLU; Karabell is long AAPL; Karabell is long IBM; Karabell is long TGT; Karabell is long MOS calls; Karabell is long GOOG

For Steve Grasso
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 NYX
Stuart Frankel & its partners own PRST
Stuart Frankel & its partners own XRX
Stuart Frankel & its partners own ZNGA

For Patty Edwards
Trutina Financial is long AAPL
Trutina Financial is long C
Trutina Financial is long GLD
Trutina Financial is long JNK
Trutina Financial is long INTC
Trutina Financial is long CME
Trutina Financial is long PM
Trutina Financial is long KMP
Trutina Financial is long HSY

For Zach Karabell
River Twice is short XLF
River Twice is short SMH

For Jeff Kilburg
Kilburg is long TLT

For Rebecca Patterson
No disclosures

For Robin Farley
(WYNN): Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers and were prepared in an independent manner, including with respect to UBS, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report.

For Colin Gillis
(AAPL): Investment banking (next 3 months): BGC Financial LP and/or its affiliates, expect to receive, or intend to seek, compensation for investment banking services within the next three months from all of the companies referenced within this report.
Lead or Co-manager: BGC Financial LP and/or its affiliates, has not acted as lead or co-manager in a public offering of equity and/or debt securities for Apple within the last 12 months. BGC Financial LP and/or its affiliates has not received compensation for investment banking services in the last 12 months from Apple.
(GOOG): Investment banking (next 3 months): BGC Financial LP and/or its affiliates, expect to receive, or intend to seek, compensation for investment banking services within the next three months from all of the companies referenced within this report.
Lead or Co-manager: BGC Financial LP and/or its affiliates, has not acted as lead or co-manager in a public offering of equity and/or debt securities for Google within the last 12 months. BGC Financial LP and/or its affiliates has not received compensation for investment banking services in the last 12 months from Google.

For Mark Mahaney
William Reinhardt, CFA, Associate, holds a long position in the securities of Google Inc.
Steven J Fullerton, Associate, holds a long position in the securities of Google Inc.
Neil A Doshi, Associate, holds a long position in the securities of Google Inc.
Rohit Thapliyal, Associate, holds a derivative position in the securities of Amazon.com Inc.
A member of the household of Wenge Yang, Associate, holds a long position in the securities of eBay Inc.
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of eBay Inc, Netflix Inc. This position reflects information available as of the prior business day.
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Groupon, Inc., Google Inc.
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Groupon, Inc., Google Inc, eBay Inc.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Groupon, Inc.,
Google Inc, Amazon.com Inc, eBay Inc in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Groupon, Inc., Google Inc, eBay Inc.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Groupon, Inc., Google Inc, Amazon.com Inc, eBay Inc.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Groupon, Inc., Google Inc, Amazon.com Inc, eBay Inc.
Citigroup Global Markets Inc. or an affiliate received compensation in the past 12 months from Groupon, Inc..
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.
The Firm is a market maker in the publicly traded equity securities of Groupon, Inc., Google Inc, Amazon.com Inc, eBay Inc, Netflix Inc.





CNBC.com with wires.

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