Tomorrow's Playbook - Sell The News?

#1 - SELL THE NEWS?

Newsweek says we're on the “road to recession” but is the magazine reading this market correctly?

I think we are in a recession, says Karen Finerman, but the critical issues are how deep will the recession be and how pervasive. I think those are the more important points.

I agree that we’re probably in a recession, adds Guy Adami, but I have some early recovery names. Take a look at chemical stocks such as Dupont (DD), Eastman Chemical (EMN) and others. I think all these companies are buys at certain levels. But if you wait for the recovery it will be much too late to buy these names.

Also I like the rails, Adami adds. Watch Burlington Northern (BNI) earnings Tuesday – I think they’ll reveal that we’re in a recession but things aren’t as bad as they seem.

I agree that it’s time to start building a position, adds Jeff Macke. Look at some retail names for the long term.

The homebuilders might have some tailwinds too, adds Karen Finerman. I would not be short them, anymore.

It might be early to get into the homebuilders, counters Pete Najarian. Instead, I would look at “ag” names such as Archer Daniels Midland (ADM).

#2 - Food For Thought

Do McDonald's (MCD) weak December sales sound death knell for food stocks as consumers tighten belts?

Before McDonald’s Plunge: Fast Food Stocks, 1 Year

McDonald’s (MCD) +29%
Darden (DRI) -31%
Wendy’s (WEN) -23%

McDonald’s has been on an amazing roll and it’s hard for them to sustain that pace says Jeff Macke. The weak consumer finally caught up with them. I’ve been bullish on this name but they’re probably reaching right now with their coffee strategy. Instead watch Starbucks (SBUX), he recommends

Bottom line, says Macke, you can slowly start building a position in MCD but I’m bullish on SBUX right here and right now.

I like the valuation in MCD, agrees Guy Adami, and at these levels, the stock looks attractive.

Read More:

Find out how Pete Najarian recommends trading McDonald’s in “Lovin’ It?”

Find out how Pete Najarian recommends trading McDonald’s in “Lovin’ It?”

#3 - Yahoo! Earnings, Yikes?

Will improvement in its search engine and advertising lift Yahoo (YHOO) earnings Tuesday?

I’m not enormously optimistic about Yahoo, says Jeff Macke. The only catalyst could be takeover talk. If you hear rumblings about breaking up or being in the market to sell themselves, then I think the stock could go much higher, he says. Short of that, I’m not expecting any big moves.

It wouldn’t be so shocking to see Microsoft (MSFT) buying Yahoo!, says Karen Finerman. I don’t think Yahoo! will be able to challenge Google (GOOG) without some major backing.

The bottom line - none of the traders recommend buying Yahoo! ahead of earnings.

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Trader disclosure: On Jan 28, 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 (YHOO), (EMC); Finerman Owns (GS); Finerman's Firm Owns (AEO), (GLNG), (TSO), (VLO), (YHOO), (WMT); Finerman's Firm Is Short (MDY), (IYR), (IJR), (SPY), (IWM); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Najarian Owns (C), (EMC), (MS), (MCD), (MSFT), (BIIB); Najarian Owns (AAPL) Calls, (BBY) Puts, (COP) Calls, (CTSH) Calls, (YHOO) Calls, (YRCW) Calls; Najarian Owns (DOW) Calls; GE Is The Parent Company Of CNBC