The Dow might be recovering currently, but overall this bull market of ours is still in question. Three pieces of this bull however broke out Thursday and may keep going.
#1 - CONSUMER IS NOT DEAD
From Saks (SKS) to Wal-Mart (WMT) , August sales figures from retailers were much better than expected proving to some that despite housing market woes, the consumer is not dead.
CNBC Retail Reporter Margaret Brennan has been covering the story and joins the panel for this conversation.
Margaret, is the consumer coming back to life?
The rumors of the death of the consumer have been exaggerated somewhat, says Brennan. This data suggests a solid start to the Back-To-School season, however we have to wait for September numbers to know for sure.
Brennan adds that from CEO’s she’s been talking with, all the noise that’s been crunching the stock market hasn’t really affected consumers. In fact, Coach (COH) tells Brennan that high end is doing so well, they’re adding more high end items.
Are retail CEO’s more bullish about their outlook than The Street?
Breenan says retail CEO’s are trying to moderate expectations. They’re cautious but not freaking out. Consumers seem to be going shopping less often but spending more when they buy.
Are traders more comfortable owning economically sensitive names when they see strength in retail?
Guy Adami says the short answer is “Yes.” However, he says the real story is about the wealth creation trade. On the high end things are great, adds Adami. He likes Tiffany (TIF), Saks (SKS) and Sotheby’s (BID).
Karen Finerman can’t understand why Guy is bullish on Sotheby’s in this market.
#2 - COMMODITY BULL MARKET INTACT
The biggest moneymaker during this bull market showed Thursday that it too, is indeed not dead. Commodities are surging with gold topping $700 and oil jumping above $76. What's the trade as the global economic growth beast reemerges?
Guy Adami believes that global growth is still a huge factor in this market. He feels stocks that benefit from global growth sold-off recently because they were over-owned, and that nothing changed fundamentally. He likes Freeport McMoran (FCX) and Exxon Mobil (XOM).
Pete Najarian prefers steel stocks such as Posco (PKX) as well as energy stocks for global growth. He particularly likes oil services companies such as BJ Services (BJS).
Dylan Ratigan tells the panel that mining stocks have moved higher in the last few days also on global growth.
#3 - DEALMAKING NOT DEAD
While private equity purchases have dried up since the credit market blew up at the end of the summer, dealmaking may not totally be finished. Corporate deals may continue coming - such as the Yahoo! purchase of BlueLithium on Tuesday.
Karen Finerman explains that she sees opportunities for corporate buyers (as opposed to private equity buyers) as well as foreign buyers because the dollar is weak. She likes Meriden Gold (MDG) as a trade because the company is the object of a hostile takeover bid as well as other bids.
Pete Najarian tells the panel to keep an eye on the medical devices space for M&A activity. He believes Biomet (BMET) is a deal that will go through. He’s also watching Dade Behring (DADE) as well as Ventana (VMSI) and Roche (ROG).
Jeff Macke scoffs and says if this is the best the market can do, he’s not impressed.
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Trader disclosure: On Sept. 6, 2007, 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 (JWN); Najarian Owns (CHL), (BJS);Finerman's Firm Owns (WMT); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Is Long (MDG) And Is Short (AUY) Against It.
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