TOPPING THE TAPE: HOUSING
Looking at the market broadly, stocks struggled to find direction as investors weighed further overseas concerns against promising economic data against.
On the bullish side of the story, homebuilders traded sharply higher today after the latest report showed a 27-percent jump in new home sales in March.
But with the new home buyer tax credit set to expire this spring, is it the right time to hop into these names?
I’m a believer in the housing recovery, says Brian Kelly. Strength in rail car loadings as well as an increased in the demand for lumber are positive signs. And I’d trade it with a downstream play. Look at Armstrong as a second derivative trade. They make floors.
I’m not a believer, counters Eugene Profit. I think the strong numbers are all about the tax credit expiring. Foreclosures are still growing and I think that’s going to be a big problem in the second half of the year.
In the space, I’d look at Owens Corning and Weyerhaeuser, counsels Steve Grasso. They benefit from the supply chain erosion. Many of their rival suppleirs went out of business in the downturn.
UNUSUAL ACTIVITY: USG
In a related housing trade, Scott Nations has spotted unusual options activity in USG Corp. – a manufacturer of building materials.
The large volume of May 25 calls traded suggests to him the stock could make a sharp move higher.
WHAT'S GOING ON WITH GREECE
On the bearish side of this story worries about the long-term outlook for Greece's shaky finances curbed investors' appetite for risk.
On Friday Athens appealed to its European partners and the International Monetary Fund for emergency loans and set in motion the first financial rescue of a member of the euro zone.
"This is a double-edge sword. It's positive in a sense that it will provide a short-term relief, but on the negative side, investors are now concerned that this might spread to weaker countries in Europe," says Peter Cardillo of Avalon Partnersin a Reuters interview.
How should you be positioned now?
The uncertaintaly about Greece seems to have confused investors, says Brian Kelly. If there's one thing markets hate, it's uncertainty.
But Greece hasn’t done anything to damage American markets, says Steve Grasso. I wouldn’t turn bearish on the American stock market because of developments out of Greece.
The surge in new home sales lifted retail names on Friday, with the top stocks in the S&P Retail ETF outperforming . Take a look:
S&P Retail Index (XRT) Top Holdings
Netflix 10 yr high
Casey's - 5 yr high
Jos A Bank- 5 yr high
Tractor Supply - 52-wk high
Limited - 52-wk high
Ann Taylor - 52-wk high
Best Buy- 52-wk high
Children's Place - 52-wk high
What’s the trade?
Investors are chasing what’s working and it’s putting a bid in the retail space, explains Steve Grasso. But there’s no doubt these stocks have had quite a run.
I’m a bear in this area, adds Eugene Profit. The only one I like listed above is Best Buy .
THE AMAZON TRADE
Shares of Amazon fell on Friday after the company gave a second quarter outlook that fell short of expectations.
But Citi analyst Mark Mahaney sees the story a little differently. He tells the desk its time to buy; he sees a 25% upside.
What does he know that you don’t?
I think investors are getting too caught up on operating income guidance, says Mahanely. The long thesis remains in tact.
I’d also be a buyer at these levels, says Brian Kelly.
*Check out our entire interview with Mahaney. Watch the video above.
BUY EARNINGS DIPS?
A slew of big names including Microsoft traded to the down side this week, due to investor disappointment following earnings.
Should you buy the pullback in Mr. Softy?
I’m a buyer, says Eugene Profit. I thought their results were very impressive.
I wouldn’t buy Microsoft with Eugene’s money, counters Brian Kelly. The trend in software is free cloud computing and that leaves Microsoft in a pickle.
TRADE GO TO: HEWITT ASSOCIATES
Brian Kelly suggests putting Hewitt on your radar.
I’m bullish on Hewitt because in the latest durable goods report the Capex number was incredible. That’s often a signal that hiring is picking up.
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Trader disclosure: On April 23, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Grasso Owns (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X); Kelly Owns (FXE) Puts; Nations Owns (MSFT); Nations Owns (SPY)
For Eugene Profit
Profit's Firm's Funds Own (MSFT)
Profit's Firm's Funds Own (GOOG)
Profit's Firm's Funds Own (XOM)
Profit's Firm's Funds Own (AAPL)
Profit Owns His Firm's Funds
For Steve Grasso
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NXST)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (TBT)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)
Stuart Frankel And Its Partners Are Short (CVGI)
For Brian Kelly
Kanundrum Capital Owns (MORN)
Kanundrum Capital Owns (DHI)
Kanundrum Capital Owns (AWI)
Kanundrum Capital Owns (ATW)
Kanundrum Capital Is Short Euro
Kanundrum Capital Owns (HEW)
For Mark Mahaney
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (AMZN) In Past 12 Months
(AMZN) Is Or In Past 12 Months Was A Client Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services)
Citigroup Global Markets Is A Market Maker In (AMZN)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (AMZN)
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