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Bill Ackman Joins Buffett In Kraft

In extended trade, investors were gaming food stocks after billionaire investor William Ackman followed Warren Buffet into Kraft with a 2 percent stake.

The moves comes as Kraft nears a deadline to make its final bid for Cadbury .

Ackman said he wants the deal to go through and is calling on Kraft to offer more cash.

In a statement to CNBC Ackman said, "We think the deal makes tremendous sense and Kraft is a very cheap stock. We want them to issue as little stock as possible to get the deal done."

Earlier this month, Buffett's Berkshire Hathaway investment group said it had voted "no" to Kraft's proposal to issue up to 370 million new Kraft shares to help fund a Cadbury takeover, but may change its vote if it concludes that the offer does not destroy value for Kraft shareholders.

What’s the trade?

It’s interesting to see Kraft shares higher in the after hours, says Karen Finerman, Kraft needs to put up their final offer for Cadbury on Tuesday; so the higher Kraft trades the more the offer is worth. And if the negotiating lingers past Tuesday I’d consider a long position on the news.

Click here for more:
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Pershing Square Buys 2 Percent Stake in Kraft

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EARNINGS SEASON SLAUGHTER?

The bears sent the Dow tumbling by triple digits after the latest earnings reports failed to ignite buying.

Results from JPMorgan dashed hopes that consumer spending is on the mend sending not only its shares lower but also those of rivals Bank of America and Wells Fargo as well as other banks that report next week.

Banks Earnings Next Week
Tuesday: Citigroup
Wednesday: BofA, Morgan Stanley, Wells, USB
Thursday: Goldman, Fith Third, Key Banc
Friday: BB&T

What’s the bank trade?

JPMorgan is a great bank, says Guy Adami, I just think the stock is head of itself. I see further room on the downside. I think it trades to $39.

But if JPMorgan gets too pushed down I think it’s an interesting stock, says Pete Najarian. Around $40 I’d start to nibble

Consumer credit weakness in JPMorgan doesn’t bode well for Bank of America, says Karen Finerman.

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INTEL BLOWOUT CAN’T MOVE STOCK

Meanwhile tech investors took profits on Friday after blockbuster earnings from Intel failed to lift shares above $21, a point of technical resistance.

Ahead of tech earnings next week, investors took the action to mean the PC upgrade cycle is all but priced into chip stocks.

Tech Earnings Next Week
Tuesday: IBM
Wednesday: eBay
Thursday: AMD, Google

What’s the tech trade?

I think Intel has made it’s short term top, says Guy Adami. If you’re aggressive I think you can short it.

Intel is up 50% on a 12- month basis, reminds Tim Seymour. I think this stock is tired.

Morgan Stanley says a peak in Intel shares signals a peak for semiconductors as a whole, says Pete Najarian, but I’m not so sure. I’m watching Qualcom, AMD and other names in the space. They’re all performing well. I wouldn’t just look at Intel and say that’s the entire sector.

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TOPPING THE TAPE: AMAZON BUCKS TOUGH TAPE

The traders are keeping an eye on the action in Amazon which traded well in a tough tape.

What’s the trade?

I think Amazon will be a beneficiary of the positive things that FedEx told us a few weeks ago, muses Pete Najarian. I’m not saying run out and buy today but I would put this name on the radar.

Around $106 Amazon is attractive, counters Guy Adami. But I’d wait for it to slide to that level.

Patterns in the charst suggest to me it wants to go to $140, says Scott Nations of NationShares on the Halftime Report.

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THE OBAMA TRADE: OBAMA TAX: WHO’S NEXT?

Some investors are speculating that weakness in financials on Friday had less to do with JPMorgan and more to do with the administrations proposed TARP tax.

Although it’s widely believe a bank tax won’t pass in Congress it’s leading to speculation about what other kinds of tariffs may be on the horizon.

As you can imagine CNBC’s Rick Santelli has plenty to say on the matter. This is one heated conversation you won't want to miss. Watch the video now!

You can see our conversation with Santelli at the end of the Word of the Street video.




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Trader disclosure: On Jan 15th, 2010, 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), (NUE), (BTU); Seymour Owns (AAPL), (AET), (BAC), (INTC), (VIP); Finerman's Firm Is Short (IYR), (MDY), (SPY), (IWM), (USO); Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (MSFT), (NOK); Finerman's Firm And Finerman Own (WFC) Preferred; Pete Najarian Owns (CELG); Pete Najarian Owns (FCX), Is Short (FCX) Calls; Pete Najarian Owns (HUM) Call Spread; Pete Najarian Owns (MS); Pete Najarian Owns (PFE); Pete Najarian Owns (QCOM) Calls; Pete Najarian Owns (TEVA); Pete Najarian Owns (TXT) Call Spread; Pete Najarian Owns (XLF) Calls

For Brian Stutland
Stutland Owns (IBM) Feb. Calls, Is Short (IBM) Puts
Stutland's Firm Is A VIX Market Maker
Stutland's Firm Is Short Volatility
Stutland Owns (GS) Call Spread
Stutland Owns (GS) Corporate Bond

For Jon Najarian
Jon Najarian Owns (HUM) Calls
Jon Najarian Owns (AET)

For Brian Kelly
Kanundram Capital Is Short EURSD
Kelly Owns (FXE) Puts

For Jon Najarian
Jon Najarian Owned (HUM) Calls Today

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