Strategy Session with the Fast Money traders
I believe there’s a lot of money sitting on the sidelines and it’s going to move into the market, speculates Joe Terranova. I’m bullish. The note from Goldman highlights the improving market conditions.
Mutual fund and pension fund money is definitely sitting on the sidelines, adds Steve Grasso. I agree with Joe that it may come in. Don’t forget just two weeks ago, those money mangers were concerned about the S&P sliding down to 850, but that doesn’t seem nearly as likely, now.
I also feel positive about the market right now, adds Pete Najarian. We’ve got oil around $60 and that’s a good place for stocks.
TOPPING THE TAPE: TRADERS BET ON TECH
Investors drove technology shares higher on Monday after Credit Suisse upgraded Cisco Systems to "outperform" citing strong earnings momentum against a backdrop of low expectations. Meanwhile, both Apple and Yahoo were trading higher ahead of earnings.
And after the bell, Texas Instruments topped analysts' expectations sending share higher in late trading. Although Texas Instruments said chip demand fell along with sales of cellphones and other electronics due to the weak economy, it added that it expects sales to improve this quarter.
What’s the tech trade?
I’m worried, says Tim Seymour. I don’t like the relative strength indicators for Cisco and other stocks in the sector.
I’d take the other side of that trade, counters Joe Terranova. I think there’s a fundamental story in technology. In the back half of 2009 I expect corporate spending to come roaring back.
And many tech firms have incredible balance sheets as well, adds Pete Najarian. You’ve gotta’ love that!
But don’t forget that 70% of stocks move with the broad market, reminds Steve Grasso. I feel that Cisco needs a bull market for it to make meaningful gains.
Oil continued its march higher on Monday as optimism about a potential global economic recovery lifted expectations of a turnaround in fuel demand.
The support stems from a mostly bullish report from the Conference Board's index of leading economic indicators which showed prospects increased for a third straight month in June, suggesting the recession was drawing to a close.
Meanwhile, shares of Halliburton closed higher after the company posted a higher-than-expected profit on Monday. However the world's second-largest oil services company warned that North American natural gas markets would stay weak throughout 2009.
What’s the oil trade?
In oil, I like Hess, Petrobras and Suncor , counsels Joe Terranova.
I prefer integrated oil, adds Tim Seymour.
Elsewhere in commodities, copper prices climbed to a five-week high on Friday, after an unexpected jump in U.S. home construction data in June boosted hopes for economic recovery.
And Freeport-McMoRan, the world's largest publicly traded copper company, reports second-quarter results Tuesday before the market opens
What’s the trade?
The expectation is that copper miners such as FCX and others are seeing top line growth, explains Tim Seymour.
It seems to me Freeport is still very cheap, muses Pete Najarian, but the volatility is only pricing in a small move.
BULL MARKET OR B/S?
With the S&P closing at an 8-month high -- and perhaps more important closing above 950 a past level of resistance -- are the bulls about to take this market another leg higher?
Barry Ritholtz of Fusion IQ doesn't think so. Find out why. Watch the video now!