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After Hours Action: FedEx

After hours, investors poured over comments from FedEx as they tried to determine how the company's revised outlook could influence Tuesday’s trading.

Specifically, shares of Fedex rose as much as 4% in extended trade after the overnight shipper raised its outlook.

Investors were particularly cheered by comments from FedEx CFO Alan B. Graf Jr. who said, "Year-over-year growth in our U.S. overnight express and FedEx International Priority services increased each month during the quarter, aided by inventory restocking and our successful sales efforts."

He also said, "Demand for our international services has improved significantly since the first quarter, particularly in Asia and Latin America."

What must you know before you trade on Tuesday?

I believe in Dow Theory says Tim Seymour. (Essentially, that suggests as transports go higher the DJIA will follow) Buffett's purchase of Burlington Northern took the broad market and I’ll be watching to see if FedEx does the same.

The question that I want to know is – if this all about inventory restocking as mentioned above, what's the catalyst to take them higher, muses Joe Terranova.

I think taking a position in FedEx is hard to do at these levels, says Guy Adami. Although I think it could go to $100 I just wouldn’t race in, right now.

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GOLD BUBBLE BURSTING?

U.S. gold futures dropped more than 2 percent on Monday, extending the previous session's sharp decline, as a dollar rise against the euro prompted jittery bullion investors to unwind positions.

What’s the trade?

Options traders seem to be hedging their bets against the weak dollar / strong commodities trade, reveals Mike Khouw of Cantor Fitzgerald on Fast Money's Halftime Report. I’m seeing investors pay up for calls in the dollar and buying downside puts for protection in gold .

I think the move lower in gold is an opportunity, counsels Tim Seymour. Long gold is the trade that should work long-term. I’d be a buyer of the GLD.

Gold challenged $1135.80 and didn’t get below that critical level, says Joe Terranova. We may be looking at a bottom.

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STOCKS STUCK AS BANKS WEIGH ON MARKET

Stocks ended slightly lower on Monday, reversing earlier gains, after comments by Federal Reserve Chairman Ben Bernanke sparked jitters about the economic recovery.

Speaking at the Economic Club of Washington, Bernanke said inflation could remain subdued, but the U.S. unemployment rate could remain elevated for some time.

Initially the Fed chief's remarks lifted stocks and sent the dollar lower, but later some investors pared positions with financials and technology shares among the hardest hit.

What must you know?

I expect Bernanke’s policy to remain in place, says Joe Terranova. The Fed wants wealth creation and that suggests the Fed will allow the dollar to get weaker, long-term.

The Vix remains around 22, says Pete Najarian. That suggests a 15 point move in the S&P.

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MARKET BUZZKILL: FINANCIALS WORST SECTOR

Financials led the market lower after the Financial Times said Citigroup is seeking government approval to repay $20 billion in TARP money.

Other published reports suggest Citigroup as well as Wells Fargo are wrestling with the U.S. government over how much capital the banks will be required to raise.

What’s the trade?

I just can’t help but wonder if more secondaries are coming, says Guy Adami.

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AMERICA'S FAVORITE STOCKS FALTERING

As we’ve been telling you for the past couple of days, the traders are keeping a close eye on the technical action in Apple and Goldman.

Both stock appears to be rolling over.

Considering these stocks led the march higher, is this a sign of broad weakness?

I don’t find the action encouraging, says Guy Adami. The action isn't on the radar because the broad market is sideways to higher, but when we take a turn lower -- and I expect we take a turn lower -- it should come into focus in a big way.

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RATE CALL: BENCHMARK TREASURY YIELD TO SPIKE HIGHER?

Bond yields could "explode' higher in the first half of 2010, even if the Federal Reserve were to stick to its near zero interest rate policy, Morgan Stanley analysts said on Monday.

The yield on benchmark U.S. 10-year Treasury notes US10YT=RR is expected to climb to 4.50 percent by the first half of 2010 prompted by technical factors, they said.

These technical factors include a slowdown in money going into bond funds, a sensitivity to rising rates across various asset classes and an abundance of bullish bets that bond yields will head lower, they said.

"Our point is that rates will get there as the balance of reward-risk is tilted toward higher rates," Morgan Stanley rates analysts wrote in a research note.

As of late Monday, the 10-year yield, which lenders use to set loan costs such as mortgage rates, was 3.45 percent.

A spike in longer-dated yields would widen the yield gap between two-year to 10-year Treasuries to 325 basis points during this span, Morgan Stanley said.

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TOPPING THE TAPE: TIME TO BET ON THE FARM?

The traders are wondering if it’s time to bet the farm after Goldman Sachs upgraded Potash , citing improved outlook for demand for fertilizer.

Meanwhile, CF Industries said Monday that it was raising its hostile bid for Terra Industries by $4.75 a share.

Under the latest bid, Terra shareholders would now receive $36.75 cash and 0.1034 shares of CF common stock for each Terra share, says The New York Times

What’s the ag trade?

Potash around $124 looks attractive to me, says Pete Najarian.

I like Monstanto , adds Guy Adami.

I’m watching the space closely, says Tim Seymour. I think more takeovers are coming.




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Trader disclosure: On December 7th, 2009, 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), (MSFT), (BTU), (NUE); Seymour Owns (CHL), (AAPL), (BAC), (GE), (MSFT); Najarian Owns (AAPL) Calls; Najarian Owns (BAC) Calls; Najarian Owns (DD), Owns (DD) Calls Spread; Najarian Owns (GE) Calls; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (TXN), Is Short (TXN) Calls

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