A perfect jobs report Friday signaled this economy is doing just fine. The S&P 500 jumped to a record, fully wiping out the summer credit crunch. But is the carnage safely behind us?
BACK TO THE RECORD BOOKS:
The headline: S&P Surges 2.3% This Week To a Record on Jobs Report Relief; Dow Leaps 143 Points On Jobs Report, Lifting Weekly Gain to 1.6%
The jobs report was “perfect,” Jeff Macke says.
The rally shows that the financials are back, Pete Najarian says. Investors have digested all the bad news and moved on.
Tim Seymour thinks this week’s rally is evidence that a recession is not on the doorstep. It’s also ammunition for a short-term dollar rally, he says.
THE WEEK: TECH STOCKS:
The headline: Nasdaq Climbs 3% This Week as Apple (AAPL), Google (GOOG), Research in Motion (RIMM) Fuel Tech Run
“You can’t ignore how strong this sector looks,” Karen Finerman says.
Jeff Macke particularly likes how the strength in tech is not just split between a few big name stocks like Microsoft (MSFT) or Apple. Instead, it’s the gadget-makers that are rocking.
There were upgrades across the board for RIM after its earnings, Pete Najarian says. Apple and Nokia (NOK) are both working, too, as well as a lot of the chip names. And don’t count out the PC makers like Hewlett-Packard (HPQ) and Dell (DELL) that have high levels of global exposure.
THE WEEK: BROKERS & DEALS:
The headline:Blackstone (BX) Surges 15% This Week as Deal Financing Shows Signs of Recovery
Dealflow financing appears to be coming back, Tim Seymour says. Many of the brokers have used the third quarter as an opportunity to report their worst case scenarios, he says, and now a lot of the bad news is behind them. Subsequently, Tim thinks Merrill Lynch (MER) and Countrywide Financial (CFC) are both starting to look cheap.
Jeff Macke reiterates: “You cannot be short the financials.”
Pete Najarian likes the exchanges, which are always ripe for dealmaking. He bought the Nasdaq (NDAQ) this week.
THE WEEK: WINNING GAMES:
The headline:Activision (ATVI), Electronic Arts’ (ERTS) Strong Gains This Week Show Investors Game Is Far From Over
Get long Activision, Jeff Macke says. The success of Nintendo’s (NTDOY) Wii console took everyone by surprise and it took the software makers a while to catch up with getting new games into the cycle. In fact, Jeff would get long Electronic Arts and Nintendo as well. He sees even more upside in this sector.
THE WEEK: RAUCOUS CHINA VACATION:
The headline: Week-Long China Vacations Ends on High Note Despite Sharp Drops in Hong Kong Index; China ETF (FXI) Ends Week Up 6%, Hong King ETF (EWH) Gains 3%
Check out China Finance Online (JRJC), a company that provides financial information on Chinese firms. It has an astounding P/E of 400, Tim Seymour says. While China has been an explosive market, investors need to be cautious. Even during a week of vacation, the volatility was high.
Pete Najarian also stresses the importance of buying protection if you want to invest in China. The FXI can get you exposure and protection since it’s an ETF, he says.
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Trader disclosure: On Oct 5, 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 (ATVI), (INTC); Najarian Owns (VCLK), (NDAQ); Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm Owns (BWS), (GE), (WMT), (TGT), (PSS), (COP); Finerman's Firm Is Long (MSFT) Calls; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; Seygem Asset Management Owns (BX), (BBD), (EEM), (EWZ), (GLD), (ITU), (TWX), (CFC)