Stocks traded sideways on Wednesday as investors eagerly looked for clues about the all important jobs number, to be released on Friday.
On a bullish note the ADP Employer Services report showed a smaller-than-expected slowdown in job losses in December. (ADP is typically viewed as a precursor to Friday’s number.)
However optimism was tempered by the ISM number which rose, but less than expected.
However, the Fast Money traders found their next opportunities in the metals and miners, after Goldman Sachs added 3M to its Conviction Buy list and upgraded Worthington and Schnitzer Steel to "neutral" from "sell."
Considering, Goldman raised its rating on the entire steel sector toward the end of 2009, where should you be putting fresh money to work?
Strategy Session with the Fast Money traders
I’m watching auto sales which are surpassing expectations around the world, explains Tim Seymour. As a result, I think industrial metals and specialty metals are trades investors should stay with. Allegheny , RTI Internationaland Titanium Metals are all names that I’ve owned over the past year because I think the world is devoid of these metals. And I believe these stocks will continue to perform.
I love steel stocks, adds Pete Najarian. And I’m very bullish on 3M just like Goldman. I think it’s an early cyclical name and it also has organic strength. It could well go to $105, just like Goldman predicts.
Once we get beyond Friday’s employment number, I’m also a buyer of 3M, adds Joe Terranova. I like the diversification of their business and I also like just how much of their revenue comes from overseas. Take a look at some of their stats:
3M - Revenue by region
Europe / middle east 27%
Asia pacific 25%
Latin America / Canada 11%
3M - Revenue by product
Packaging / industrial 30%
Healthcare supplies 17%
Security tools 15%
Consumer / office 13%
Display / graphics 13%
Electronics / electrical 11%
I’d also put the XME on your radar, adds Pete Najarian. That’s an index that encompasses all the names we pound the table on every night. It may be a good way to get exposure to all the names the desk likes.
I also believe in global growth, adds Karen Finerman but right now I’m watching oil services names. That trade is starting to feel a little frothy.
GOOGLE WEIGHS ON TECH AFTER NEXUS ONE RELEASE
In tech, investors booked profits on some of the bellwethers, including Google and Apple after recent advances propelled the Nasdaq to a fresh 16-month high, just one day ago.
Investors may have also turned mildly bearish on Google after the Internet giant’s new smartphone launch.
Called, Nexus One, the new device is bristling with features from speech recognition to a 3D interface and marks the first time the company has designed and sold its own gadget.
It will ship immediately from Google's online store for $179 with the purchase of a two-year contract from Deutsche Telecom's T-Mobile, or $529 without a service plan.
Although the gadget has been touted as an iPhone killer by some, advanced reviews suggest otherwise.
What’s the tech trade?
The traders say if history is any indication weakness in Google is to be expected right now, following the launch of the Nexus One.
In December 2006 when Apple launched the iPhone, the stock peaked on the gadget’s debut then fell for the next two months.
Similarly with Amazon, when the company debuted the Kindle in September 2007, the stock peaked then fell for about a month.
Same is true for Motorola ; the stock peaked in October 2009 on the debut on the Droid and has been falling since.
I think new gadget releases present a classic case of buy the rumor and sell the news, explains Karen Finerman. If shares dip below $600 I’d add to my position in Google.
I’d look at Qualcomm on a pullback, adds Joe Terranova.
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Trader disclosure: On January 6th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (AA), (BAC), (EEM), (F), (INTC), (TRINA); Seymour Is Short (PBR), (POT); Najarian Owns (BG) Call Spread; Najarian Owns (CLF) Calls; Najarian Owns (CLF); Najarian Owns (FCX); Najarian Owns (MS); Najarian Owns (SOLF) Call Spread; Najarian Owns (TCK) ; Najarian Owns (TJX); Terranova Owns British Pound Futures; Terranova Owns Copper Futures; Terranova Owns (BAC); Terranova Is Short (CMA); Terranova Works For (VRTS); Finerman Owns (AAPL), (RIG); Finerman's Firm Owns (BAC) Preffered; Finerman Owns (BAC) Preferred; Finerman's Firm Owns (MSFT), (PBR), (PDE), (RIG), (WMT), (PLCE) (TJX)
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