REBOUND PARES LOSSES FOR WEEKStocks ended their worst week in months with modest gains on Friday, as bargain-hunting among financial stocks offset a government report showing further deterioration in the U.S. labor market.
However after hours word hit the Street that the Treasury is close to finalizing a plan to backstop Fannie Mae and Freddie Mac. The widespread belief is that the plan will include changes in senior management, wipeout shareholders and bring down mortgage rates.
I think events set up for a nice bear rally, muses Jeff Macke. But I think traders will also be quick to pull the trigger.
Expect pundits to come out of the woodwork and say the worst is over, adds Guy Adami. I'm not sure that it is, but that could add to the bounce.
TECH ENDS A ROUGH WEEK
Shares in Nokia tumbled Friday after the leading cell phone maker said its third-quarter global market share will decline from second-quarter levels because of aggressive price cuts by its rivals.
I like Nokia, says Karen Finerman, but I didn’t like what they had to say today.
Nokia said it was losing share because of its "tactical decision" not to match the aggressive price cuts of some of its competitors, seeking instead to be "sustainably profitable in the longer term." It also cited tough competition in emerging markets and a slow "ramp-up of a mid-range Nokia device."
I think it’s a disciplined decision from Nokia, adds Pete Najarian. The competition in the space is very difficult and they have to do something.
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CHART OF THE DAY: RIMM
Concerns that a slowdown at home and abroad will cut into corporate tech spending has been an on-going drag on the tech sector. Few charts show the selling pressure better than this one-month look at Research In Motion. Shares have declined 20% in only 10 days.
For a year and a half investors thought RIMM would grow into their valuations, says Guy Adami. Now they’ll take a closer look.
With little advance notice Apple revealed plans for a media event this coming Tuesday.
Immediately speculation began to swirl that Steve Jobs could unveil a new iPod or reduce its price, or maybe both. However, its hard to tell if the changes will be revolutionary.
The chatter is all about iPod and only iPod. I don’t see that getting the market excited, says Pete Najarian
I would not buy the stock on this news, says Jeff Macke. The new iPhone looked exactly like the old one.
OIL FALLS $9 THIS WEEK
Oil prices fell to a fresh five-month low on Friday on flagging demand in the United States and other consumer nations, extending crude's losses to 8 percent this week.
The whole Fannie / Freddie thing could be bad for the dollar , reminds Guy Adami. That could trigger a vicious move higher in oil. If it happens, look at Schlumberger .
I’d welcome a pullback in the dollar, counters Jeff Macke. I don’t like anything going parabolic. However there’s still economic weakness around the world and that shoulud drive the dollar, fundamentally.
I’m short the pound but on the Fannie news I’d probably change my position on currencies and take a little off the table. I think the government backstop is bearish for the greenback.
Keep an eye on the refiners, adds Pete Najarian. I love the action in Frontier and Tesoro. Lower oil means input costs are less and margins at the refiners should improve.
ALTRIA EXPANDS INTO SNUFF
CNBC’s David Faber has confirmed that Altria is looking to buy smokeless tobacco maker UST for about $10 billion or $68 /share.
I like the deal and I’m long Altria, says Karen Finerman. They have an under-levered balance sheet.
Call buying in UST exploded on Thursday, reveals Pete Najarian. Someone knew something.
A lot of companies have under-levered balance sheets, adds Guy Adami. Watch for more of them to put the money to work.
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Trader disclosure: On Sept 5, 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 (MSFT), (WMT), (DIS), (ATVI); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (AAPL), (AAPL) Collar; Najarian Owns (RIMM) Call Spread; Najarian Owns (VMED) Puts; Najarian Owns (XLF), (XLF) Collar; Najarian Owns (ZMH) Calls; Najarian Owns (XLE) Call Spread; Najarian Owns (FTO) Calls; Najarian Owns (NOK) And Is Short (NOK) Calls; Finerman Owns (GS); Finerman's Firm Owns (MO), (MSFT), (NOK), (SUN), (TSO), (VLO); Finerman's Firm Owns (AAPL) Calls; Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Owns (IRF) Calls; Finerman's Firm Is Short (BBT), (COF), (IYR), (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Short The British Pound