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.
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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!
