HALFTIME REPORT: BANKS BUCKING THE BAD TAPE
Around lunchtime the S&P 500 was trading almost flat ahead of earnings from Microsoft and Amazon however investors were finding some relief in the financials.
Shares of big banks such as JPMorgan as well as regional banks like PNC Financials were both in the green.
Investors felt some renewed optimism about the space after PNC reported a profit more than twice as great as analysts expected largely due to the acquisition of National City, which helped offset a surge in nonperforming commercial loans.
Strategy Session with the Fast Money Traders
I’ve got my eye on the results of the stress tests due out Friday, says Jeff Macke. I can’t imagine regulators allowing any banks to fail, but if they do I’d short them immediately.
I’m seeing a lot of put activity in Regions , explains Jon Najarian. I think the ProShares UltraShort Financials ETF is a good play to protect gains.
That put buying could be related to a Bloomberg report which says that Regions Financial as well as Fifth Third Bancorp may be among regional lenders that struggle to pass the U.S. government’s stress test because they are mired in commercial real estate debt.
TAKE YOUR POSITION: MICROSOFT AFTER BELL
Microsoft , the world's largest software maker, reports fiscal third-quarter earnings Thursday after the closing bell.
Considering just last week, two research groups reported worldwide PC sales fell around 7 percent in the quarter, what’s the trade?
I could not care less about this stock, bristles Jeff Macke.
I like Microsoft, counters Jon Najarian. But right now I’m neutral on the earnings.
TAKE YOUR POSITION: AMAZON
Amazon reports earnings Thursday and investors are eager to hear if the new Kindle might spark some life in the firm’s bottom line!
The device, which Oprah has called her new favorite gadget, began shipping in February and has the same $359 price tag as the old version but is skinnier and has a number of upgraded features like the ability to store many more books and to read text aloud from two small speakers on its back.
To hold the Kindle is to hold the iPod 5 years ago, says Jeff Macke. I’m dying to get this stock but I wouldn’t rush in here-- I’d wait for a pull back.
When more newspapers go onto Kindle I think it could be a game changer, muses Dennis Gartman.
OnWednesday’s Fast MoneyDan Niles, of Alpha One Capital Partners told Fast Money not to buy ahead of earnings. “This is a stock that’s up 50% this year and trading at a 30 multiple. I think there are a lot better places to put your money than to chase this. I’d rather own eBay.”
And he added “God help them if they don’t beat the numbers and have really good things to say on the call because that’s what everyone is expecting.”
TOPPING THE TAPE: APPLE
Investors bid Apple higher on Thursday making it among the Nasdaq's biggest boosts. Yesterday after the bell, the tech titan reported a jump in quarterly earnings on higher iPhone sales, easily topping analyst expectations.
I took profits in this stock, reveals Jon Najarian.
I’ve also taken profits, adds Jeff Macke. I wept like a school girl but I don’t see any catalysts in the near-term to drive the stock higher.
GOLD HIGHER, DOLLAR LOWER, OIL HIGHER
Gold edged higher on Thursday, extending gains from the day before as ongoing global economic concerns enhanced the shiny metal’s appeal as a hedge against market uncertainty.
Meanwhile, the U.S. dollar pared gains versus a basket of major currencies on Thursday after a report showed U.S. March existing home sales fell 3 percent.
The weak dollar outweighed falling demand and sent oil higher, above $49 a barrel on Thursday. A falling dollar can boost the appeal of oil and commodities to investors as an inflation hedge.
Oil seems to be stuck in a range, explains Addison Armstrong, and that range is between $47 and $55. If you see oil pop above $50.50 you might want to take a shot at getting long for a trade.
But if you don't want to play the spot price, the inventories numbers make me bullish on Teekay Corp. and Nordic American , adds Armstrong.
WARNING SIGNAL: UPS MISSES
Weak results from United Parcel Service heightened worries that the worst of the economic slump may still lie ahead.
The transportation giant reported a lower-than-expected profit and gave an outlook below analysts' views largely because the global downturn caused fewer packages to be shipped.
“The results are miserable, but we expected misery," says Edward Jones analyst Dan Ortwerth. "And all bets are off as to when that misery will end."
The world's largest package delivery company said its first-quarter net income of $401 million, or 40 cents a share, compared with $906 million, or 87 cents a share, a year earlier.
Seasonally the second quarter should not be worse, explains Tim Seymour. UPS is a bellwether for the economy and I think this is a tell.
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CNBC.com with wires