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Barton Biggs: “Year-End Stampede”

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The former Morgan Stanley strategist expects a “surge” in U.S. stocks in the coming months. Also, what to buy and what to sell after the Fed, the word on Google’s surge, MasterCard’s momentum and more.

BEN DRESSES UP AS GOLDILOCKS:

The headline: Market Feels ‘Just Right’ After Quarter-Point Rate Cut, Surprisingly Strong GDP

The Fed pulled back. It gave the market the cut it wanted but threw in some concern about growth and inflation, Jeff Macke said. It also made a “tacit admission” that it’s killing the U.S. dollar by slashing interest rates.

In its accompanying statement, the Fed did imply that future rate cuts aren’t a foregone conclusion, saying “strains in financial markets have eased somewhat on balance.”

Barton Biggs of Traxis Partners (formerly chief global strategist for Morgan Stanley), told Fast Money that the Fed has set the stock market up for a “big surge” for the remainder of the year.

Biggs said he expects a “stampede” in big cap multinationals, tech and in Asia and emerging markets in the coming months.

On the China bubble, Biggs said it is reminiscent of the state of the U.S. tech sector in early 1999, meaning he expects another year to year-and-a-half of growth before a slowdown or recession in that market.

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Biggs predicts the investment banks will be at the forefront of a broad-based “catch-up,” saying the banks are “clearly signaling” they are going to perform and go up at least twice as much as the S&P 500.

FED JOLTS COMMODITY BULL:

The headline: Crude Oil Leaps 4.6% To $94.53, New Record Close, on Supply Concerns, Rate Cut; Gold Tops $800 After-Hours; Dollar Tumble to New Low vs. Euro

UPDATE: Crude topped $95 in electronic trading after hours.

The situation in oil is a combination of a real demand issue and inflation, Pete Najarian said. The speculators are what are pushing the price of crude higher.

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Carter Worth called a top in oil, saying the market is well-supplied and it’s “overdone.”

$700 GOOGLE LEADS TECH:

The headline:Google (GOOG) Tops $700 For First Time on Social Networking, Mobile Phone Plans

Pete Najarian, an owner of Google options, is “comfortable” with the rapid rise in stock price. He doesn’t think it’s inflation with respect to its peers and it has the catalysts to push the stock even higher. Get long GOOG, he said, but a call spread will limit the risk if there’s a sharp move downward.

Carter Worth said investing in GOOG as a pure play is tantamount to “playing with fire.”

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Jeff Macke and Guy Adami both like the more conservative plays in the senior, more mature areas of tech like Microsoft (MSFT), Dell (DELL) or Intel (INTC) – three “Fed proof trades,” according to Guy.

MASTERCARD SURGES ON ‘EVERYTHING ELSE’:

The headline: MasterCard (MA) Shares Soar 20% As Earnings, Revenue Trounce Estimates

This is a sea change story, Guy Adami said. Credit card usage is going up worldwide and MA is leading the charge, but it could be seeing a short-term top. With such huge volume on a 52-week high, Guy would take profits before MA sees a pullback.

AFTER HOURS ACTION: Crocs Crashes:

The headline: Crocs (CROX) Plunges as Much as 21% After Hours on Disappointing Earnings

Jeff Macke and Pete Najarian are both bearish on Crocs. The footwear maker has lost momentum and neither trader would get long until it can show the Street it can continue growing again.

BALE BONDS:

The headline: Bond Insurers Ambac (ABK), MBIA (MBI) in Serious Trouble as Liquidity Remains Tight

The bond insurers have seen big moves down and Carter Worth thinks there is more to come. The earnings for both ABK and MBI are intact yet the share prices for both stocks are collapsing. In addition, the money center banks performed poorly Wednesday, unable to respond to the Fed.



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Trader disclosure: On Oct 31, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Najarian owns options in (BIDU), (GOOG), (MER), (YHOO); Macke owns (YHOO), (DIS); Carter Worth’s firm is a market maker in (DRYS), (YHOO)