Here’s his thesis: The dollar is strong which keeps the lid on commodity prices. That prevents the Fed from tightening. If the jobs number is horrible, then rate hike talk is passé. And if the jobs number is good the dollar continues to rally because compared to Europe we’re better off.
Either way the dollar should continue to rally which allows the Fed to allow the yield curve steepen. That will allow banks to earn their way out of their problems.
"I wouldn’t pick one bank,” he says. “You don’t know what they’re holding on their books,“ however getting long a basket of financials might be a smart play.
The Bottom Line: If the Fed doesn’t need rate increase rhetoric the problems in the financials could begin to solve themselves. The trade ahead of the jobs report is to buy the financials.
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Trader disclosure: On Sept 4, 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 (WMT), (UUP), (ATVI), (MSFT), (CY), (EMC): Adami Owns (C), (GS), (INTC), (AGU), (BTU), (MSFT), (NUE): Finerman Owns (GS): Finerman's Firm Owns (AAPL) Call: Finerman's Firm Owns (AEO), (MSFT), (NOK), (SUN), (TSO), (VLO), (JCP), (JNJ), (RIG), (PDE); Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Is Short (BAC), (XLF), (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (WFC), (BBT), (WB); Finerman's Firm Owns (JCG) Calls. (IRF) Calls: Pete Najarian Owns (AAPL) And (AAPL) Collar; Pete Najarian Owns (LEH) Call Spread, (LEH) Put Spread; Pete Najarian Owns (LMT) Put Spread; Pete Najarian Owns (MS) And Is Short (MS) Calls; Pete Najarian Owns (NOK) And Is Short (NOK) Calls; Pete Najarian Owns (XLF) And (XLF) Collar; Iuorio Owns (C)
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