S&P 500 SLIDES 3.3%
The four day winning streak for stocks was halted today as the S&P 500 slid 3.3%, on bad economic data in the morning while new policy announcements from the White House brought out the bears later in the day.
The new administration still faces the same problems we’ve encountered over the last few months: How to price the bad loans. And today Obama made some fervent statements on Wall Street bonuses that sent ripples through the stock market, labeling the $20 billion in bonuses this year “the height of irresponsibility.”
Fast Money resident curmudgeon Jeff Macke pushes back, at least a little. He says, “The height of irresponsibility would be creating a good bank/bad bank structure and pretending to the nation that you could actually fix these things, as well as the autos.
However, Macke also has some words for those of you running the financials. "if you’re a banker you’d rather not have the President of the United States bad-mouthing you by name.”
President Obama’s remarks came on the same day that Senator Chris Dodd (D-CT) demanded the Treasury Department look in to clawbacks for executive bonuses. “It’s all about sentiment,” says Pete Najarian, “This would convince people that the government is serious handling these bad assets.” He also pointed out that the CBOE Volatility Index did not spike today, and that is a good sign, demonstrating that things did not drop into chaos.
And if you're looking for a trade, Guy Adami sees this rough patch for banks as a good time for trading. Pointing out the huge percent gains State Street made yesterday, people began taking those profits, which resulted in a down day for the stock.
AFTER HOURS ACTION: AMAZON
Amazon surged over 11 percent in after-hours trading on a better than expected earnings report and a strong first quarter sales forecast.
Although gross margins were down for the quarter operating margins were up. They are running their business better, says Guy Adami.
Zachary Karabell points out that traditional retailers are suffering, as the online marketplace enjoys continued success.
OPTIONS ACTION: NETFLIX
With Netflix subscriptions up 25%, people are staying at home and downloading movies. People are looking for more, says Pete Najarian. He points out that the stock has been up seven dollars in three days, and he thinks waiting to jump into the profits is a good move.
They executed a transition I actually didn’t think they could make, says Jeff Macke. It makes sense, says Pete Najarian.
GOLD BREAKS ABOVE $900
Goldhas not moved the way people had thought in the past few months, says Zachary Karabell, he points out that the dollar is more resilient than some analysis are predicting.
Gold pulled back, but now it’s moving back towards $900. Pete Najarian suggests looking into the Gold Miners ETF
I like gold a lot right now, says strategic investor Dennis Gartman, author of The Gartman Letter. It sold very violently on a day that the dollar was very strong. Gold has become the second reserve currency, Gartman continues, if you can’t go any place else, people are going to move into gold.
See the rest of the conversation with Dennis Gartman, with how to play the financial sector right now. And a Bernie Madoff action figure for the kids… from the White House. Watch the video now!
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Trader disclosure: On Jan. 29th, 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 (SDS), (MSFT), (TM); Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Karabell Owns (AAPL), (CL), (DRYS), (FCX), (GOOG), (JPM), (NVDA), (NOK), (CINA); Najarian Owns (EEM) Call Spread; Najarian Owns (FCX) & (FCX) Short Calls; Najarian Owns (MSFT) & (MSFT) Short Calls; Najarian Owns (MS) & (MS) Short Calls/Put Spread; Najarian Owns (SQNM) & (SQNM) Short Calls; Najarian Owns (PALM) Calls
Gartman Owns (KBE), (TOWN)
Gartman Owns Gold, Canadian Dollar, Australian Dollar
Gartman Is Short The Euro
CNBC.com with wires