FED FOCUS: WHAT TO EXPECT
The headline: Investors On Edge Monday Despite Expectation Of Rate Cut Tuesday
Guy Adami doesn’t think the Fed meeting can end well for the market, any way you slice it. He feels a 25 point rate cut is priced into stocks already and a 50 point rate cut could be interpreted as panic.
Mike Darda, Chief Economist and Director of Research for MKM Partners joins the panel for this conversation.
Darda speculates The Fed could reduce the Fed funds rate by 25 basis points but reduce the discount rate by 50 or even 75 points.
Jeff Macke tells the traders that he will be looking for three items in Tuesday's Fed statement. They are…
He wants to hear a 25 point cut and that the Fed’s focus is shifting from inflation to growth.
FED FOCUS: FINANCIALS
The headline: Financials Lead Market Lower Monday Ahead Of Broker Earnings This Week.
Dylan Ratigan explains that Lehman (LEH) slipped 1% Monday, ahead of Tuesday earnings data which will be released before the bell. Meanwhile, Goldman Sachs (GS) and Bear Stearns (BSC) are scheduled to report earnings Thursday before the bell.
Guy Adami thinks LEH quarterly earnings will be terrible. He still doesn’t think the financials know how much exposure they have to subprime slime.
Jeff Macke agrees. He feels it will be tough for investors to get their arms around the mortgage problem.
FED FOCUS: UNSUNG SECTORS
The headline: What Will The Fed's Meeting Mean For Utilities, Industrials, Healthcare, And Technology?
Guy Adami recommends buying Public Service Enterprise Group (PEG) because utilities do well in a lower interest rate environment.
Mike Darda, Chief Economist and Director of Research for MKM Partners reveals that he’s currently bullish on energy, materials, industrials and technology.
By contrast, he’s not a fan of the more defensive sectors such as healthcare and consumer staples. Darda anticipates The Dow will move higher long term.
He adds if investors want to get long financials he thinks they should marry it to Treasury Inflation Protected Securities or TIPS.
NEW OIL RECORD
The headline: Oil Jumps 1.9% To $80.57, A New Record, as Global Growth Continues to Boom
Guy Adami thinks the “Iran story” moved crude oil higher. Guy also thinks these levels are dicey and suggests oil will go lower.
The headline:CSX Corp (CSX) Shares Chug Up Charts On UBS Upgrade
Guy Adami thinks investors will soon see a bottom in the rails.
The headline: E*Trade (ETFC) Says Profits Will Be 31% Lower Than Guidance Because Of Mortgage Exposure.
Karen Finerman finds the announcement disconcerting. On the news, Karen recommends selling Amertirade (AMTD). She thinks others will have the exact same problems.
Pete Najarian explains that E*Trade will leave wholesale mortgage business. He’s concerned because investors don’t know how much exposure the brokers have to the credit crunch. However, Pete adds he still likes Schwab (SCHW).
BAD NEWS BANK
The headline: Bank Of America (BAC) Says Credit Turmoil Will Have Meaningful Impact On 3rd Quarter Results.
Karen Finerman says the timing is interesting because BAC doesn’t report earnings for a while. She wonders if they’re sending a signal.
Dylan Ratigan tells viewers to expect the market to move lower Tuesday on this news.
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Trader disclosure: On Sept. 17, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (EMC); Najarian Owns (VMW); Najarian Is Short (ETFC); Najarian Owns (GS) Options: Finerman's Firm Owns (TXI), (WMT), (TGT), (COP); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; GE Is The Parent Company Of CNBC