STOCKS UP AHEAD OF FED
Both the Dow and S&P traded higher after a surprise jump in orders for big-ticket manufactured items boosted investor sentiment ahead of the Federal Reserve's decision on interest rates.
The gains come as investors wait for the Fed to finish its two-day meeting on monetary policy. The central bank's statements this year have tended to bring big moves in the stock and bond markets.
Market Moves On Recent Fed Days
Date Dow
Dec 16, 2008 +4.2%
Jan. 28, 2009 +2.5%
Mar. 18, 2009 +1.2%
Apr. 29, 2009 +2.1%
Source: WSJ
The Fed is widely expected to leave its key rate unchanged at a range of zero to 0.25 percent, but investors are less sure about its outlook for the economy.
How should you be positioned?
Instant Insights with the Fast Money Traders
The market is already telling me that its not concerned about the Fed, reveals OptionMonster Jon Najarian. I’m seeing a drop in the Vix, a great durable goods number and stronger than expected results from Oracle boosting sentiment.
The durables number was great, muses Tim Seymour. If you’re playing commodities this may be a great place to jump in.
I’m seeing investors buying puts just in case, counters Jared Levy of Peak6. But I think its disaster insurance. I can see the market moving higher however I’d tread lightly after the announcement. I wouldn’t take a position until about 30 minutes before the close.
I think traders are worried that maybe the S&P rally is all about buying the rumor and they want to see if it gets sold after the statement comes out, muses Addison Armstrong.
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ORACLE LEADS TECH HIGHER
Oracle led the tech sector higher after topping Wall Street forecasts Tuesday, after the bell.
Oracle's chief financial officer, Jeff Epstein, said in a statement that Oracle executed "substantially better" than the company expected. Investor took the comments to mean that the economy may be stabilizing.
How should you play it?
I’m seeing big time put buying in this stock, reveals Jared Levy. That suggests to me that big investors are concerned about a big downside move.
I’m not sure about that, counters Jon Najarian. I think its smart people looking in gains. In other words the put buying means that big investors are actually going to hold shares for the longer-term.
Also in the sector, Yahoo! made a notable move, reminds host Melissa Lee after Microsoft CEO Steve Ballmer said that he’s open to a partnership.
It seems to me the stock is turning around, muses Jon Najarian. Considering the run I don’t think Microsoft buys Yahoo!. Instead, if anything, a deal would probably mean more of a joint venture.
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TRANSPORTS HIGHER
Transports surged higher after data showed a surprise jump in orders for big ticket manufactured items
An additional tailwind came after the Organization for Economic Cooperation and Development (OECD) said the economic outlook has improved for the first time in two years.
What's the trade?
The Transports are flying high, notes Tim Seymour. But if we fail here I think the broad market rolls over
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OIL TRADE LOOKING FOR DIRECTION
Investors are desperate to determine which direction oil is heading. Crude rose above $69 a barrel on Wednesday, supported by news of a bigger-than-expected draw in stocks and growing geopolitical troubles in some OPEC member countries.
However, crude traders all but ignored evidence from the Energy Information Administration (EIA) that U.S. distillate supplies jumped to their highest level in more than 10 years and inventories of gasoline rose more than expected last week.
If oil doesn’t get back above $71 and the Transport fails, I think oil heads toward $60 pretty quickly, speculates Addison Armstrong.
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Trader disclosure: On June 24th, 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); Finerman's Firm Owns (MSFT), (WMT); Firm Is Short (WFC); Finerman's Firm Is Short (IWM), (SPY), (MDY), (IJR), (USO); Finerman's Firm And Finerman Own (BAC) Preferred Shares, Finerman's Firm Is Short (BAC); Finerman's Firm And Finerman Are Short (WFC) Preferred Shares, Finerman's Finerman's Firm And Finerman Own (FLS); Jon Najarian Owns (AAPL), (BRK.B), (JPM), (MS), (RIMM), (WFC), (WMT), (YHOO); Jon Najarian Is Short (AZO); Terranova Owns (TER), (XBI), (BTU), (ABT), (RIMM), (HES), (MS), (MSFT)
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), (ABD); Virtus Investment Partners Owns More Than 1% Of (ABD), (CAL), (CLB), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (WBMD); Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co