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Fast Money

2010 Begins With A Blow-Out

2010 began with a bang. On Monday investors sent the Dow and the S&P 500 to their best closes in 15 months, after a new report showed that the manufacturing sector expanded for the 5th time in a row.

That data sent bulls off to the races on 1) optimism about the global recovery and 2) a beleif that the next earnings season could be stronger than expected.

Also a growing belief that Friday’s jobs report will show the smallest number of job losses since the recession began, added to the positive momentum.

But some of the Fast Money traders are skeptical of the rally. Should you be skeptical, too?

Word on the Street

Strategy Session with the Fast Money traders

I am a skeptic of this rally and I remain a skeptic, says Guy Adami. I don’t believe in the rally but I’ve been wrong. And although I don’t think a rising tide lifts all boats, I ‘do’ think you can trade this market. Bucyrus and Walter Energy both look fine to me. I’d get long those two names on pullbacks.

I think we have a lot to rally on, counters Tim Seymour. PMI data came in from China and US manufacturing data looks fantastic. I was bullish through the end of the year and I remain bullish, broadly.

There’s money on the sidelines, adds Karen Finerman. It seems to me as long as investors think the world is getting better they will put money to work and that will take stocks higher.

But unlike last year, I do think investors need to do homework, she adds. After March 9th 2009, you could have thrown a dart and your stock probably went higher. Take a look.

S&P 500 Top Performing Sectors Since March Lows
As of Dec. 31

                                        Change Since March 9 Low

Financials                                  +131%
Consumer Discretionary                +87%
Technology                               +86%
Materials                                   +84%
Industrials                                 +83%

Going forward I think we're in more of a stock pickers' market, Finerman counsels.



Oil rose more than $2 to settle above $81 a barrel on Monday, its highest close in nearly 15 months, as cold weather battered the United States and drove up demand for heating fuel. Also the weak dollar supported higher prices.

What’s the energy trade?

InterOil looks like a huge momentum play, muses Guy Adami. I think there’s more momentum to the upside.

Don’t forget Deutsche boosted its outlook on refiners and its raised rating on several names, including Valero , adds Tim Seymour.

And if you want to play nat gas I think you can do it with Chesapeake or Devon , adds Karen Finerman.



Gold rose sharply on Monday as the dollar traded lower against a basket of currencies amid speculation inflation may rise this year.

Meanwhile gold’s strength lifted other precious metals, with palladium climbing to its highest since July 2008, and platinum hitting a 16-month peak. In fact, the traders are looking at the long-term returns on a wide range of commodities. They follow:

Commodities Return Since 2000
Gold      280.4%
Oil         211.4%
S&P 500 -23%
Dollar     -23.8%
Source: Birinyi Associates

Should you stick with commodities going forward?

I’m not that enthusiastic about staying with commodities long-term, says Mike Khouw of Canter Fitzgerald on the Halftime Report. I wouldn't mind being long some of the oil names but owning gold probably isn't the way I'd go for the long term.



The traders are closely watching the action in tech after Apple hit a 52-week high on tablet talk.

Elsewhere in the sector, chips stocks traded higher after Baird upgraded Intel to "outperform" on expectations for a rebound in corporate PC spending.

And Google also hit a 52 week high after FBR Capital analyst Heath Terry  reiterated his outperform rating on Google, and lifted his price target to $810, from $680.

What’s the tech trade?

In this space, I’m watching Western Digital which I think is a value play, says Guy Adami.

I like RIM as a smartphone trade, adds Tim Seymour. I’m a buyer of weakness.

EMC is also worth a look, adds Pete Najarian. I expect to see growth accelerate in data storage.



Never at a loss for words, we asked Peter Schiff, the president of Euro Pacific Capital for 3 predictions for the year ahead.

He told us:
1. U.S. economy will be in worse shape
2. Foreign stocks, gold & commodities to outperform U.S. stocks
3. Dollar will end year lower

Want to hear more from Schiff? Watch the video now!

Trading 2010: Schiff's Outlook

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Trader disclosure: On January 4th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;

For Guy Adami:
Adami Owns (AGU)
Adami Owns (C)
Adami Owns (GS)
Adami Owns (INTC)
Adami Owns (MSFT)
Adami Owns (NUE)
Adami Owns (BTU)

For Pete Najarian:
Najarian Owns (CLF), Is Short (CLF) Calls
Najarian Owns (MGM)
Najarian Owns (MS)
Najarian Owns (CAT) Call Spread
Najarian Owns (BP) Call Spread
Najarian Owns (BG) Call Spread

For Karen Finerman:
Finerman Owns (GOOG)
Finerman's Firm Is Short (IJR)
Finerman's Firm Is Short (IWM)
Finerman's Firm Is Short (MDY)
Finerman's Firm Is Short (SPY)
Finerman Owns (AAPL)
Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads
Finerman Owns (BAC) Preferred, (BAC)
Finerman's Firm Owns (CSCO)
Finerman's Firm Owns (MSFT)
Finerman's Firm And Finerman Own (RIG)
Finerman's Firm Owns (VOLC)
Finerman's Firm And Finerman Own (WFC) Preferred
Finerman's Firm Owns (CMP)

For Tim Seymour:
Seymour Owns (AAPL)
Seymour Owns (BAC)
Seygem Asset Management Owns (CZZ)
Seymour Owns (FXI)
Seymour Owns GE
Seymour Owns (INTC)
Seymour Owns (LVS)
Seymour Owns (MSFT)

GE Is The Parent Company Of CNBC

For  Mark Mahaney:
A Citi Associate Owns (YHOO)
A Citi Associate And A Citi Research Assistant Own (GOOG)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (YHOO), (PCLN),
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (GOOG), (AMZN), (YHOO), (EXPE) In Past 12 Months
(GOOG), (AMZN), (YHOO) Are Or In Past 12 Months Were Non-Investment
Banking Clients Of Citigroup Global Markets (Securities-Related Services)
(GOOG), (AMZN), (YHOO), (EXPE) Are Or In Past 12 Months Were Non-Investment Banking Clients Of Citigroup Global Markets (Non-Securities-Related)
Citigroup Global Markets Is A Market Maker In (GOOG), (AMZN), (YHOO), (EXPE), (PCLN), (NFLX), (AKAM)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (GOOG), (YHOO), (EXPE)
Citigroup Global Markets Or Affiliates Owns 2% Or More Of (YHOO)

For Robin Farley:
UBS AG & Affiliates Owned 1% Or More Of (WYNN) As Of End Of Last Month
(WYNN) Is Or In Past 12 Months Was An Investment Banking Client Of UBS
Securities LLC
UBS Securities LLC Received CompensationFrom (WYNN) In Past 12 Months with wires