STOCKS REBOUND ON POSITIVE ECONOMIC DATA
The Dow and S&P 500 gained on Thursday, breaking a three-day losing streak, as data on the job market and regional manufacturing revived hopes that the economy may be stabilizing.
Specifically investors were cheered by jobless claims. Although applications were higher-than-expected, for the first time since January the number dropped – and it was the largest one-week drop since November 2001.
Also the Philadelphia Federal Reserve's business activity index boosted sentiment with results that were much better than economists' expected, though still negative.
Skeptics say that although the data was less bad it wasn't good and that real improvement is needed to sustain this rally.
How should you be positioned?
Strategy Session with the Fast Money traders
The economic data seems supportive to me, muses Tim Seymour. And it sent investors into the commodities and resource names. That's relatively bullish.
Personally, I think the market is overbaked, says Jared Levy of Peak 6. I wouldn’t chase trades. For me, July earnings will be tell-tale. That’s when we’ll know if the market can sustain these gains.
I’m modestly bullish of stocks, adds Dennis Gartman on Fast Money's Halftime Report. I’m erring upon the side of owning aluminum and steel and the stuff of economic growth. Personally, I think in Q3 we’ll find out the economy is in a rebound.
AFTER HOURS ACTION: RIMM
Shares of RIMM sank lower in post-market trade after the company reported earnings which beat expectations but included a forecast that disappointed.
What’s the trech trade?
The disappointment comes from units shipped, explains Joe Terranova. It was south of $8 million but I'm not worried. In fact, I think RIMM is a buy on this pullback.
If you jump in here you might be a tad early, counters Guy Adami. If the tape rolls over RIMM could trade with a $60-handle.
If you’re looking for a trade in the space, I’d look at Nokia , counsels Tim Seymour.
BANKS SHAKE OFF NEW REGULATION, DOWNGRADES
Financials shrugged off concerns about new regulation and a sweeping S&P downgrade – and supported Thursday’s stock market rally. Notably Discover Financial closed higher after it reported a smaller-than-expected operating loss and Lincoln National popped on an upgrade from Credit Suisse.
What's the trade?
I would not jump in here, counsels Guy Adami. I still think JPMorgan is a short. In financials, would short into strength and not buy on weakness.
In the near-term I’d also be careful, adds Jared Levy of Peak 6.
I’d put JPMorgan, Wells Fargo and Goldman Sachs on my radar, counters Joe Terranova. I think they will be the first names the hedge funds want to own when uncertainty comes out of the market and as a result could pop higher.
DEFENSE, DEFENSE: HEALTH CARE CONTINUES TO PERFORM
Healthcare stocks recorded gains on Thursday as investors rotated money into this sector which they deemed better positioned to withstand a still uncertain economy.
Health Care Only Sector Up In Last 5 Days:
Cons. Staples -1%
Health Care +2%
What’s the trade?
I think Abbott Labs trades up to $49, counsels Guy Adami.
Or look at Teva , adds Jared Levy. They’ve got a lot of positive momentum and the stock isn’t terribly volatile.
TOPPING THE TAPE: ALCOA
Shares of Alcoa and other commodities name closed higher on Thursday as investors made bullish bets on aluminum for global growth and as a hedge against a weaker dollar.
I think Alcoa is going higher, speculates Joe Terranova.
Aluminum prices have not rallied as much as other commodities, explains Tim Seymour. It was my final trade on Wednesday and I think investors can still get long.
Elsewhere in commodities I’d be careful of the oil services stocks, counsels Guy Adami. If the broad market goes down these names will probably go down fast.
TRADE SCHOOL: NATURAL GAS
A three-week rally in natural gas prices paused Thursday after the government reported a huge build in supplies, more evidence of a severely weak industrial sector.
Natural gas, a key energy source for power plants, had been trading higher most of June, though it still fetches less than a third of last year's price.
I’ve been wrong on nat gas and I’ve stepped out of this trade, reveals Joe Terranova. Now I think the nat gas trade is to step to the sidelines.
BULL MARKET OR BS? WHAT'S GOING TO WAKE THIS MARKET UP?
Friday marks the end of the two-day quadruple witching period, referring to the expiration and settlement of June stock and index futures and options, which may increase volatility.
Will quad witching make or break the market?
It’s a trade not a trend, explains Steve Grasso.
Want to hear how Steve Grasso suggests playing it? Watch the video and find out!
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Trader disclosure: On June 18th, 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 (C), (GS), (BTU), (AGU), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (BX), (EEM), (FXI); Seymour's Firm Owns (RSX); Levy's Firm Owns (MON); Terranova Owns (XBI), (TER), (BTU), (ABT), (MSFT); Terranova Owns (BRCM) & Is Short (BRCM) Calls; Terranova Owns (POT)& Short (POT) Calls; Terranova Is Short (JPM)& Is Short (JPM) Calls; Terranova Owns (MS) & Short (MS) Calls; Teranova Owns (X) & Is SHort (X) Calls; Terranova Owns July Nat Gas Futures ; Terranova Owns (DIS) Octovber Call Spread; Terranova Is Short (XOM) Call Spread; Terranova Is Short (GENZ) Call Spread; Terranova Is Short (OIH)& (OIH) Puts; Terranova Is Short (RIG)& (RIG) Puts; Terranova Is Short (FCX)& (FCX) Puts; Terranova Is Short (RIMM)& (RIMM) Puts; Terranova Is Short (IBM) Calls
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