Warning Writedown Ahead
#1 - Warning: Writedowns Ahead
Banks begin reporting earnings March 10th. Will they issue warnings of further write-downs this week ahead of earnings?
CNBC’s Charlie Gasparino joins the panel for this discussion. Following is a summary of his main points.
Citigroup
According to Goldman, Citigroup is the most vulnerable to subprime writedowns. Gasparino also thinks Citigroup remains a “huge mess” and should see other massive writedowns. Now the questions becomes - do they eliminate their dividend all together.
Goldman Sachs
Goldman dodged a bullet last quarter, but they most likely won't be so lucky this quarter, says Gasparino. They could be in the “soup” with Citigroup.
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Also, a consortium of banks has largely finalized a deal to recapitalize troubled bond insurer Ambac Financial Group and is now trying to sell the plan to the rating agencies to save Ambac's triple-A rating, CNBC has learned.
The review should be done by the end of the week, says Charlie Gasparino. But, I don’t think they’re great businesses going forward.
Read More:
> Ambac Still Needs Ratings Firms To Approve Rescue
#2 - Bad News Buys:
Macy's (M),Target (TGT), and RadioShack (RSH) all report earnings on Tuesday. Does Monday’s rally in Lowe’s suggest worst-case scenarios are already priced into retail?
Shares of Lowe's rallied on Monday after the home retail giant said profits fell, albeit less than expected, Dylan Ratigan explains.
What does that mean going forward?
Bad news could be in the retailers, exclaims Jeff Macke. I think it’s time to hold your nose and buy.
I agree, says Karen Finerman. But still expect the worst.
I like Home Depot (HD) at current valuations, adds Guy Adami.
Bad News Buys
| TICKER | COMPANY | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|
| HD | Home Depot Inc | 325.10 | -1.79 | -0.55% |
| M | Macy's Inc | 20.18 | +0.12 | +0.60% |
| -- | -- | -- | -- | -- |
| TGT | Target Corp | 145.23 | +0.82 | +0.57% |
I like Home Depot (HD) at current valuations, adds Guy Adami.
#3 - Aloha, Pete
Fresh from his Hawaii vacation, Pete Najairan reveals where he’s seeing unusual options activity.
Watch Cogent (CCOI) ahead of earnings, explains Najarian. Options trading suggests it could go higher. I recommend buying the calls, he counsels.
Aloha Pete
| TICKER | COMPANY | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|
| CCOI | Cogent Communications Holdings Inc | 59.14 | +0.65 | +1.11% |
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Trader disclosure: On Feb.25, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (ATVI), (YHOO), (DIS); Najarian Owns (C), (MS), (MSFT), (XLF), (YHOO); Najarian Owns (CCOI) Calls, (AA) Calls, (NTAP) Calls; Najarian Owns (ACI) Calls; Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm Owns (MSFT), (SUN), (TYC), (WMT) (YHOO), (AAPL); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (LEH); Finerman's Firm Owns Shares Of Royal Bank of Scotland Group plc; WWE Programs Air On Networks Of NBC Universal, The Parent Company Of CNBC; Vivendi Owns 20% Of NBC Universal, The Parent Company Of CNBC; GE Is The Parent Company Of CNBC