STOCKS START MAY WITH GAIN
Both the Dow and S&P continued their march higher on Friday as surging oil prices drove up energy shares and fresh economic data suggested key parts of the economy could be stabilizing.
For the week, the Dow rose 1.7 percent, the S&P gained 1.3 percent and the Nasdaq ended up 1.5 percent.
Strategy Session with the Fast Money Traders
It seems like the rally is getting tired, muses Guy Adami. It’s very hard for a trader like me to get long any initial positions after this huge run.
I don’t see any reason to get off the bandwagon, counters Joe Terranova. People are under invested right now and if the market breaks 900 you could see investors pile in, afraid they’ve missed the bull. If that happens they could really chase the market much higher.
It’s nice to have this rally, says Karen Finerman, but I’m not big on trading in and out of stocks. Instead I’m looking for values and right now I like Mastercard .
I like Mastercard down at $151, counsels Guy Adami, but I wouldn’t pile in here.
And turning attention to world markets, I’m seeing some bullish sentiment in global PMI numbers, explains Tim Seymour. If stocks hadn’t run so much already I think it could have set stocks on fire.
CHRYSLER FILING WEIGHS ON AUTOMAKERS.
Shares of General Motors closed lower on concerns that the Chrysler bankruptcy may pave the way for GM to declare Chapter 11.
As CNBC’s Phil Lebau said on Thursday’s Fast Money, he would now be stunned if GM doesn’t move into bankruptcy. That's because Chrysler's situation makes it clear that the Obama administration is intent on playing hardball with bondholders.
Lebeau explained the government is offering 10 cents on the dollar and there's no way bond holders will agree to that. His opinion is that debt holders will take their chances in court.
GM is a trader’s stock, explains Guy Adami, not a long term investment. It could well go to zero.
GM has a payment due June 1st, reminds Karen Finerman. They’ll probably get a grace period from their bondholders if they can’t pay but I think we could see bankruptcy as soon as June 30th.
And if you’re looking for an investment in the auto sector look at Ford , Adami counsels. Or, for a downstream trade keep an eye on Borg Warner but right now it looks a little rich.
FINANCIALS IN THE HOT SEAT
The government has decided to delay releasing results of the highly anticipated "stress tests" conducted on the nation's 19 biggest financial institutions. Instead of coming out Monday, plans are now to release the information late Thursday afternoon.
"There's some apprehension about the stress tests next week and the fact that (the results) were pushed back I think is more of a negative sign," says Michael James, a senior trader at Wedbush Morgan in Los Angeles.
However the market may have already spoken, reminds CNBC’s Steve Liesman. In other words, anticipated results could already be priced in.
What do you think? We want to know.
TOPPING THE TAPE: OIL FINALLY WAKES UP
U.S. crude futures rose on Friday, testing technical resistance above $52 a barrel as the dollar's weakness versus the euro and improved consumer sentiment helped push crude futures higher.
It wasn’t just oil, explains Joe Terranova. There was a lot of buying Friday across the entire commodities space.
That may be because we’re seeing moves in global PMI numbers, muses Tim Seymour.
It’s also possible that investors are getting out of gold and into other commodities, reminds Guy Adami.
ANALYZE THIS: RESEARCH IN MOTION
Shares of BlackBerry maker Research In Motion shot higher on Friday after analysts at UBS Investment Research upgraded the stock and said the company stands to gain from the corporate side of its business once the economy rebounds.
UBS analysts Maynard Um tells Fast Money that RIM faces little competition in the "enterprise" market -- made up of large corporations and government departments -- and even though this market is pressured today, it will be a source of strength for RIM when the economy firms up.
I understand what Maynard Um is saying, but personally I wouldn't chase this stock, counsels Guy Adami. It's doubled since the beginning of March.
CHART OF THE DAY: CHDN HITTING BIG RESISTANCE AT $35
Despite the momentum generated by the Kentucky Derby this weekend, shares of Churchill Downs are struggling to get out of the gate. It seems this stock can’t get past $35, a point of extreme resistance.
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Trader disclosure: On May 1st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (AAPL), (BAC), (EEM), (FXI), (PBR), (DRYS); Finerman Owns (MA); Finerman's Firm Owns (AXP), (PBR), (RIG), (UNH), (TBT), (KFN), (ADP), (XPI), (IBB), (CSCO); Finerman's Firm And Finerman Own (TBT); Finerman's Firm Owns (BAC) Preferred; (C) Preferred; Finerman's Firm Owns (MSFT) & (MSFT) Put Spread; Finermans Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Terranova Owns (IBM), (MS), (BP), (XOM), (HES), (X)
Terranova Owns (DIS) Calls; Terranova Owns (JPM) & (JPM) Calls; Terranova Owns (JOYG) & (JOYG) Calls; Terranova Owns (INTC) & (INTC) Calls; Terranova Owns (BRCM) & (BRCM) Calls; Terranova Owns (WYNN) And Is Short (WYNN) Calls
Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Virtus Investment Partners Owns More Than 1% Of (ABD),(ARE), (CAL), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (CLB), (WBMD); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co; Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights; Terranova Owns June Crude Oil And Is Short September Crude Oil
UBS Securities LLC has received compensation from (MOT), (AAPL) In Past 12 Months
UBS Securities LLC Is Or In Past 12 Months Has Been A Client Of UBS Securities LLC (Investment Banking Services, Non-Investment Banking Securities-Related Services, Non-Securities Services)
(AAPL) Is Or In Past 12 Months Has Been A Client Of UBS Securities LLC (Non-Securities Services)
For Maynard Um:
UBS Has Received Compensation From (AAPL) & (MOT)
(AAPL) & (MOT) Have Been A Client Of UBS
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