BLUE CHIPS, BLACK GOLD, BIG GAINS:
The headline: Blue Chips Lift Dow to 133-Point Gain While Oil Closes Above $80 and the Dollar Plummets
It might seem antithetical that equities rallied in line with oil and a declining U.S., but the tale of Thursday’s tape showed just that. Oil is demand driven, and the global demand is strong, Karen Finerman said. That’s why it’s going higher – not because of supply, Guy Adami said.
A depressed dollar is no longer necessarily a bearish indicator for stocks as it benefits multinational companies based outside the U.S. “Benign neglect” of the dollar is “just fine,” Jeff Macke said. It would only be disastrous if the dollar actually collapsed. Karen said the Fed seems to have abandoned its inflation concern and that is why the dollar has come down.
The headline: Lehman, Brokers Lead Market Higher Before Earnings Begin Next Week
There’s more comfort out there now that there has been a cash infusion in Countrywide (CFC), Pete Najarian said. Options are indicating people expect large movements in the brokers heading into their earnings next week, he said. The volatility in Lehman Brothers (LEH) and Goldman Sachs (GS) alone make Pete think the stocks will move “double digits.”
Guy Adami “wouldn’t be upset if people took profits” in Goldman. Karen wants it to get cheaper and doesn’t think the bank will have the record earnings some are predicting.
ON THE ROAD AGAIN:
The headline: General Motors Jumps 10% on Citigroup “Buy” Rating, creation of Health Care Trust Fund; UAW Locals Told to Prepare for Possible Strike Friday
If the union deal gets done, it will be very bullish for General Motors (GM), Guy Adami said. But if GM doesn’t get union concessions – and soon – he thinks the stock will retreat.
The headline: McDonald’s Surges 6% to All-Time High Following Largest-Ever Dividend Increase
McDonald’s (MCD) is a “tremendous” company, Jeff Macke said. It isn’t too rich here, either. He would buy it.
OIL CLOSES ABOVE $80:
The headline: Crude Closes Above $80 for First Time as Hurricane Humberto Knocks Out Texas Refineries
Again, this is a long-term demand story more than a short-term hurricane story, the traders agree. But the fact that airline stocks were largely up on Thursday seemed perplexing. Guy Adami said the record oil price didn’t appear to translate into a spike in jet fuel – but Jeff Macke reiterated that this relief rally merely presents an “outstanding opportunity” to sell the airlines.
LEAPING OUT THE DOOR:
The headline: Leap Wireless Board member Abruptly Resigns, Following CFO, Head of Investor Relations
Leap Wireless (LEAP) is going lower, Karen Finerman said. The CFO took off after it got a takeover bid, then the third largest shareholder resigned, even though LEAP appeared to be his biggest position. One would think a large shareholder of a company about to get a potential buyout offer would want to stick around, and the fact that both these key players bolted is cause for concern, Karen said. She is short LEAP.
OPTIONS ACTION: BUILD-A-BEAR…THEN SELL IT:
The headline: Build-A-Bear Skyrockets After Analyst Says Toymaker May Be Close to Sale
“Keep an eye” but “be careful,” Pete Najarian advises. Based on the options, people think Build-A-Bear (BBW) is going to get taken out at a higher level.
BBW is much better as a private company than it is as a public one, Jeff Macke said. Maybe if it goes private it can turn out better same-store sales.
THE NEXT SUBPRIME LEMON?:
The headline: Will Used Auto Company CarMax Be the Next Victim of Subprime Slime?
CarMax is in a tough spot. It sells used cars in a not-so-hot automobile market, and a big part of its bottom line comes from financing those cars, which is what is hurting them even more, Jeff Macke said. He would short CarMax (KMX) going into earnings. Even the Fed can’t save this company, he said.
SELL ROSH HASHANA, BUY YOM KIPPUR:
The headline: How to Trade the Jewish Holidays
Wall Street is full of trading adages, but Pete Najarian doesn’t subscribe to any of them. Especially with volatility so high – still right at the 25% range – he thinks it would be a mistake to get superstitious now.
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Trader disclosure: On Sept. 13, 2007, 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 Build-A-Bear, is short Goldman Sachs (GS); Finerman is short Leap Wireless.