Best Week Since April:
The headline: S&P 500 Posts Biggest Weekly Gain Since April After Tame Inflation Report
The word: A tame PPI number yesterday and an even tamer CPI number today spelled good news for this market, Eric Bolling says. Pete Najarian thinks the volatility will continue. Expect the upside to stay those companies that have global exposure.
Playing the Yield:
The headline: 10-Year Yield Surges to 5-Year High This Week, Posing Threat To Spending, Dealmaking
The word: Even up 50 basis points, it’s still substantially lower on a long-term basis, Eric says. “This market is still very health,” Guy Adami says. And not only healthy, but anything well under 5.5% poses no threat to equities, according to Pete.
The headline: Monsanto Boosts Forecast Today Following Breakout In Soft Commodities
The word: Eric’s Ag play is up 50% in the last year, compared to the S&P which is up 18%. If you want the whole basket, go with the PowerShares Agriculture ETF (DBA), Eric says.
The headline: Trading China, Brazil, Russia As Emerging Markets Break Out This Week
The word: Tim Seymour of Red Star Asset Management, filling in for Jeff Macke, has been a huge promoter of the emerging markets. “This is a fantastic environment for emerging market stocks,” he says.
Oil At 9-Month High:
The headline: Oil Soars 5% To $68 This Week, Highest Price Since Sept. 5, 2006
The word: Remember that it’s the energy sector that has led this market rally, Eric says. As oil goes up, investors and refiners make more money. Guy thinks Holly (HOC) has gotten rich and he would take profits now. Pete is a buyer of Marathon (MRO).
Murdoch’s Not the Only One:
The headline:Pearson (PSO), Published Of The Financial Times, Recruiting Partners For Possible Dow Jones Bid
The word: None of the guys think this is a legitimate offer. If anyone is a takeover target, it’s Pearson, Eric says. It might make sense the other way around: If Murdoch can’t get Dow Jones (DJ), why not go after the Financial Times?
The headline:Shares of Gilead (GILD) Rise 2% After Hours On FDA Approval
The word: This stock should go above $90, Guy says.
The headline: Goldman Sachs Upgrades Intel (INTC); Is Nvidia (NVDA) In Play?
The word: There’s still a lot of activity in the options, Pete says. Guy thinks the deal will get done and even though NVDA is rich, it’s probably worth the high multiple.
How Do You “Buy” Volatility?:
The headline:Blackstone IPO Inspires Bipartisan Bill To Hike Tax Rate
The word: CNBC Reporter Melissa Lee joins the guys on set. Congress is exploring whether or not to change the tax rate on public equity firms, particularly those that might go public, so they would be forced to pay corporate taxes instead of capital gains taxes.
It’s unknown whether the Senate Finance Committee actually backs the measure, but there’s no question Congress has had a bullseye on private equity for a long time, she says. Firms like Fortress (FIG), Alliancebernstein (AB) and Lazard (LAZ) all traded sharply lower on the speculation, and Eric says that’s another reason not to own these firms when they IPO.
Tim, who runs a hedge fund, would be a buyer of any names that sold off on this news today.
But while the measure could even the playing field, it could also just become a reason for these firms to stay private or go elsewhere to be listed, Melissa says. And with all the buzz about American competitiveness, having U.S. hedge funds IPO overseas is definitely something Congress should think about.