BERNANKE, BUFFETT AND BUYOUTS
The Dow was trading higher mid-day on word the Fed Chief is encouraged by the drop in commodity prices, Lehman might be a takeover target and that Warren Buffet is adding to his position in financials.
BUYOUTS: LEHMAN LEAPS
Shares of Lehman Brothers surged on Friday on speculation the besieged bank is a takeover target. Landenburg Thalmann analyst Dick Bove tells CNBC the acquisition could happen as soon as next week.
Meanwhile, state-run Korea Development Bank said Lehman was one of its options for acquisitions, reviving expectations that the U.S. investment bank might still bring in a large investor.
I think there’s more upside to Lehman than downside, says Jon Najarian. The issues here are very different than those facing Fannie and Freddie.
I’m not sure I fully agree, counters Zach Karabell. It’s hard to know what is going on.
I’d rather go to Vegas, adds Quint Tatro, at least there you get free drinks. The financials are nothing more than a gamble.
I liked seeing that Morgan Stanley was rallying mid-day, says Joe Terranova. I bought S&P futures because I think the financials will come back to the party.
WHALE WATCHING: BUFFETT COMMENTS THIS MORNING
The market was also boosted by investor Warren Buffett's comments on CNBC that he is not betting against the U.S. dollar and that he thinks stocks are more attractive now than a year ago.
He also tells our Becky Quick that he has been adding recently to one of the two stakes Berkshire Hathaway already has in a pair of financial stocks, American Express or Wells Fargo although he wouldn't say which.
I think it’s American Express, muses Jon Najarian, because I’m seeing twice the options action in Amex than Wells Fargo.
I’m not that impressed, counters Zach Karabell. Berkshire-Hathaway hasn’t been performing that well. I don’t know how much you can learn by trading in Warren Buffett’s wake.
BERNANKE BOOSTS STOCKS, DOLLAR
Federal Reserve Chairman Ben Bernanke buoyed stocks when he indicated the Fed should be able to keep interest rates low for some time, as the recent drop in commodity prices coupled with reduced demand for resources should reduce the threat of inflation.
Strength in the market cheered the dollar which made back losses from earlier in the week.
I think you’re going to continue to see the dollar get strong, says strategic investor Dennis Gartman on Fast Money.
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OIL PARES WEEKLY SURGE
Oil was falling mid-day Friday, pressured by the recovery of the dollar and profit taking after Thursday's jump in prices which was the biggest in three months.
On Friday Joe Terranova decided to take money that he had in the back months and move it forward. “I had been long in 2012,” says Terranova. “But now I’m in the short end of the curve on the absence of follow-through in the market. “
In other words Terranova thinks it’s much more likely that oil is going higher in the short term, explains Dylan Ratigan. In the months and years out Terranova is less bullish.
I have no idea if oil is going to be higher in the front of the board or the back of the board, adds Qunit Tatro. However on Thursday the market saw a ramp in oil and retail still climbed higher. That is a de-coupling we haven’t seen in a long time. (It suggests that equities are starting to break away from the energy / consumer trade that’s going on.)
The whole coupling thing has been breaking down, says Zach Karabell. I think anyone who is trading on long term correlations is making the wrong bet.
TOPPING THE TAPE THIS WEEK: RESEARCH IN MOTION
Research In Motion shares climbed about 2% this week on the release of its new BlackBerry Bold which will first roll out in Europe and Canada before it’s debut here in the U.S.
I’m long RIMM and I believe in it, says Joe Terranova.
Don’t forget that Nokia is coming out with a phone to compete with the BlackBerry Bold, adds Zach Karabell.
OPTIONS ACTION: SCHWAB / AKAMAI
Jon Najarian is seeing unusual options action in Charles Schwab and Akamai .
That suggests to me positive news could soon send these stocks higher, he says.
STORY OF THE WEEK: COMMODITIES
Commodities are set to record one of their strongest weekly performances in years. Is the bull running again or is this a bubble?
Earlier in the week strategic investor Dennis Gartman revealed on Fast Money that he was been very bullish on grains. “I’m still long,” he says on Friday. “I’m bullish of the grain market especially of corn and of wheat.”
In the past Gartman has recommended investors play commodities through the PowerShares DB Agriculture Fund .
In case you're wondering, Gartman is not terribly bullish on oil. He thinks the action in crude is “atypical” and suggests to steer clear.
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Trader disclosure: On Aug 22, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Karabell Owns (AAPL), (FMCN), (GLD), (GOOG), (JPM), (NOK), (SLB), (RIO), (WFR), (CHL): Tatro Owns (C), (GS): Quint Tatro Is The Principal Of Tatro Capital: Tatro Capital Owns (AAPL), (FXI), (QQQQ), (SPY), (T), (XLF): Jon Najarian Owns (SCHW) Calls, (AKAM) Calls: Terranova Owns (CME), (FCX), (YHOO), (SU), (AAPL), (EOG), (KOL), (GS), (NOV), (POT), (RIMM), (X), (SA), (VLO): Terranova Owns (AIG) Puts; Terranova Is Long October Crude Oil Futures; Terranova Is Long Crude Oil Time Spread (Long Dec. 2008, Short Dec. 2012); Terranova Is Long Sept. Mini SP Futures
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)
Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO
Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Charles Schwab Is A Sponsor Of "Fast Money"
Gartman Owns (AFFY), (SJT), (UNH), (DBA), (TRLG), (CSCO), (SDS)
Gartman Owned (ANDE) And Is Short (ADM)
Gartman Is Short (ADM), (TLT), (TAP), (KBE), (GS), (GRMN), (UYG),
Gartman Is Short (MA) And Owns (MCD) (QCOM)
CIBC Gartman Index Owns Copper, Aluminum, Wheat, Corn, Soybean, Natural Gas; CIBC Gartman Index Owns 10yr Canadian Bond; CIBC Gartman Index Owns Candian Dollar; CIBC Gartman Index Is Short Crude Oil; CIBC Gartman Index Is Short Euro