The S&P traded higher on Wednesday after new economic data suggested good things about the recovery.
Specifically, the ISM number rose month over month at its fastest pace in more than two years in February, also the ADP Employment report showed U.S. private employers shed fewer jobs last month, suggesting the labor market may be on the mend.
In addition, Greece bouyed sentiment after Athens revealed $6 billion in budget-cutting measures to ensure it reaches key fiscal goals.
All these positive developments ignited investor appetite for risk, which pushed the dollar lower and boosted the commodity sector.
What must you know about the moves in the market?
Instant Insights with the Fast Money traders
I think the commodities story has legs, says Steve Cortes. If crude can close above $80 I think it’s bullish for commodities in general. Personally, it makes me want to get long soybeans because they tend to be correlated to oil.
I believe that oil goes to $90 before it goes to $60, adds Joe Terranova.
I’m watching the M&A activity in the market, says Jared Levy of Peak6. With companies making acquistions, I take it to mean they think stocks probably aren’t going to get a lot cheaper from here. I’m cautiously bullish.
Into the close, I’d fade this market, counters Brian Kelly of Kanundrum. It slumped into the afternoon on Tuesday and I think it does the same on Wednesday. Yes, oil and gold are rallying but strength in those two areas isn’t exactly what I’d want to see to feel bullish.
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GREEK GOV'T AGREES TO AUSTERITY MEASURES
As we mentioned above, Europe breathed a sign of relief on Wednesday after the government of Greece approved a sweeping new austerity program designed to reign in the bulging deficit and secure financial support from the EU.
What’s the trade?
If you’re trading the euro , I think Wednesday’s rally is a blip, counsels OptionMonster Jon Najarian. I think the dollar gains and it puts pressure on the euro as well as the overall market. Over the next 30 days I expect the euro to break 130.
I sold about 1/3 of my position in the National Bank of Greece, says Brian Kelly. I think we’re into Act III of the story – implementation. But with that said, I think Athens has a tough time implementing.
I’m watching Deutsche , reveals Steve Cortes. If it can close above $66 I’m a buyer on the close.
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FORD RUNNING
Shares of Ford hit a new 5-year intra-day high following blow-out sales numbers on Wednesday.
What’s the trade?
I think weakness in Toyota will continue to benefit Ford, says Jared Levy. But in the short-term I’m not sure how much further the stock rallies.
I think the better way to play autos is with Penske or AutoNation, adds Brian Kelly.
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EAR TO THE WALL: BANK OF AMERICA TO BRING BACK DIVIDEND?
If you put your ear to the Wall, you’ll probably hear traders in the options pits chattering about Bank of America.
What must you know?
Options action in the January 2012 suggests to me that dividend yields will begin to increase, says Jared Levy .
But it’s important to note the action doesn’t suggest the move will be made this year, reminds Jon Najarian. It's in the future.
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BIG BLOCK TRADES
The traders are closely watching the action in Expedia, with Wednesday marking a second day of big block trades. On Tuesday two trades of over half a million shares each exchanged hands – and there was another big transaction Wednesday morning after the stock was initiated as a ‘Buy’ at Think Equity.
What should you make of it?
It says to me that Expedia could be a take-over target, speculates Jon Najarian.
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CALL THE CLOSE
Jon Najarian: I think the dollar gains and it puts pressure on the market.
Jared Levy: I’m selling into Friday’s jobs number.
Brian Kelly: I’m fading this market.
Steve Cortes: I think stocks head higher.
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Trader disclosure: On March 3rd, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Cortes Is Long Soybeans; Cortes Is Short Treasuries Through Futures And Puts; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (USO), (UNG); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (GGWPQ); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (MIL), (MIL) Calls; Finerman's Firm Owns (OSIP); Finerman's Firm Owns (TGT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WMT); Grasso Owns (AAPL), (ABK), (ASTM), (BA), (BAC), (BGP), (C), (COST), (CSCO), (PFE), (PRST), (V), (WMT), (FAZ); Seymour Owns (CHL)
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