STOCKS EDGE HIGHER
The Dowedged higher on Friday, as a drop in the price of oil added to hopes of increased consumer spending and greater profit growth. However the Fast Money traders have their eye on Goldman Sachs which was down over 7% relative to the 3% decline in the bank sector.
It seems to me the same thing happened last quarter, says Guy Adami. Expectations were low and Goldman knocked the cover off the ball. At current levels I think it's a buy.
I find the Goldman "thing" very curious, counters Karen Finerman. The Street believes they're best of breed but they're moving to the downside.
The problem Goldman ran into is oil, explains Pete Najarian. They were pounding the table over oil going higher and that's giving traders pause.
It's a volatile market, says Sandler O'Neill & Partners analyst Jeff Harte on Fast Money. I wouldn't over analyze a one week move in Goldman stock.
OIL DOWN A SECOND DAY
The news:Oil prices fell below $114 a barrel on Friday on growing concerns about demand in industrial nations and the stronger dollar.
The plays: Oil tends to be cyclical, reminds Joe Terranova. Historically it bottoms in August and goes higher in Q3 and Q4. That bodes well for the overall energy sector.
Momentum is pushing oil lower, counters Pete Najarian. I don't think the story is over but I wouldn't fight the momentum, either.
AIRLINES TAKE OFF ON OIL DROP
The news:As oil slides airlines and automakers rise. Both traded higher on hope of lower fuel prices.
The plays: General Motors traded higher this week, explains Karen Finerman. But General Motors bank debt is trading below 80 cents on the dollar. That says the debt market thinks General Motors could go under. The equity is misguided.
I wouldn't touch GM or the airlines, says Joe Terranova.
Airlinescan be profitable with oil at $115, exclaims Pete Najarian.
I'd look at Rockwell Collins , says Guy Adami, as a "down the road" play. I still think it has room on the upside.
The news: Steel stocks including U.S. Steel and ArcelorMittal are falling on fears of a global slowdown.
The plays: When a stock is broken it's broken, says Guy Adami, and right now the Street is selling Letter X. You just have to wait on this one. I like Lockheed Martin . That's a stock that works.
All that's happening in steel is speculative froth is being removed from the market, adds Joe Terranova. The fundamental story remains in tact.
The news: Oil's decline spurred hopes that consumers will go shopping with the money they save at the pump and that view helped lift retailers' shares. Both JC Penney and Abercrombie & Fitch closed higher after beating Street estimates.
The plays: I thought the upside move in JC Penney was extremely impressive, says Karen Finerman. But the bar was very low.
I've been telling you for the past month and a half to look at Target , adds Guy Adami. I'd get long Target and short Wal-Mart.
WALL STREET'S SELF-LOATHING
The news: This week the banks and brokers were hit with a series of downgrades. Merrill cut its ratings for Goldman , Lehman, and Citi while Fox-Pitt Kelton cut its estimates on Morgan Stanley citing further possible writedowns.
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Trader disclosure: On Aug 15, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (CSCO) Calls, (NVDA) Calls: Najarian Owns (HCBK) Puts; Finerman Owns (GS); Finerman's Firm Owns (JCP), (MO), (NOK), (SUN), (TSO), (VLO); Finerman's Firm And Finerman Own (GLNG); Finerman's Firm And Finerman Own (C) Leaps
Finerman's Firm Is Short British Pounds; Finerman's Firm Is Short (XLF), (BBT), (COF), (SPG), (IYR), (IJR), (MDY), (SPY), (IWM)
Terranova Owns (RIMM), (AAPL), (IYT), (XLF), (KOL), (VLO), (SA), (GS), (POT), (FCX), (NOV), (X), (EOG), (INTC), (GOOG), (CME), (BNI), (SA), (YHOO), (SU); Terranova Is Short Crude Oil Time Spread (Short Dec. 2008, Long Dec. 2012); Terranova is Long Crude Oil (Dec. 2012)
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)
Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
FBR Is A Market Maker In (DELL)
Sandler O'Neill Advised Clients In Deals Involving (BAC) And (JPM): Sandler O'Neill Recvd. Inv. Bank. Comp. From (BAC), (C) In Past 12 Mos.: Sandler O'Neill Expects To Receive or Seek Inv. Bank. Comp. From (BAC), (JPM), (C) In Next 3 Mos.: (BAC), (C), (JPM), (MER), (MS) Are Clients Of Sandler O'Neill : Sandler O'Neill Was A Manager Or Co-Manager Of A Public Offering for (C) In Past 12 Mos: Sandler O'Neill Has Received Non-Inv. Bank. Comp. From (C), (JPM), (MER), (LEH), (BAC): (GS) Is A Non-Inv. Bank. Client Of Sandler O'Neill