So what does this mean for investors?
Instant Insights with the Fast Money traders
Guy Adami, managing director at Drakon Capital, likes the GM IPO for the auto industry. He recommends looking at BorgWarner , which is an auto parts manufacturer based in Auburn, Hills, Mich. The stock is pushing against a 52-week high, Adami said. UBS put it on a conviction buy list. He thinks valuations are "reasonable" and being as we're in a benign tape, he thinks BWA is the way to go.
Buy Ford Motor Co. if the share price drops to $11.50, said Pete Najarian, co-founder of optionMONSTER.com. He thinks that could happen because there is "a lot of appetite" for the GM deal. Ford's share price could fall if investors leave for GM.
What Ford has going for it that GM doesn't, said Joe Terranova, chief market strategist at Vitrus Investment Partners, is Alan R. Mulally. Adami agreed and praised the 61-year-old Ford executive.
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A PLAY ON THE CONSUMER
For a play on the consumer, Drakon Capital managing director Guy Adami recommends Visa , so long as it stays above $70 a share. The valuation is "fair" and he would stay long.
Joe Terranova, chief market strategist at Vitrus Investment Partners, also likes Visa's valuation. He's thinks investors should also take a look at American Express because it has exposure to the affulent consumer. The stock is currently an opportunity because it's trading at below $42 a share, he said.
Both Adami and Pete Najarian, co-founder of optionMONSTER.com, like Mastercard , as well.
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BONDS IN BUBBLE?
Jeremy Siegel, a professor at Wharton, wrote an op-ed in The Wall Street Journal Wednesday, which said investors may lose more in the bursting bond bubble than they did in the tech bubble of the late 1990s.
Gary Shilling, president of A. Gary Shilling & Co., has often debated Siegel over investing in stocks versus bonds, so we invited him to chat with us on Wednesday's Fast Money.
Watch the video to see the full conversation.
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Trader disclosures for Aug. 18, 2010:
Joe Terranova
Terranova owns (AKAM)
Terranova owns (V)
Terranova owns (NRG)
Terranova owns (POT)
Terranova owns (OXY)
Terranova owns (GLD)
Terranova owns (BAX)
Terranova owns (MOS)
Terranova owns (PFE)
Terranova owns (SU)
Terranova owns (XBI)
Terranova owns (GOOG)
Terranova owns (LRCX)
Terranova owns (AXP)
Terranova owns (C)
Terranova owns (GS)
Terranova owns (BMO)
Terranova owns (MSFT)
Terranova owns (QCOM)
Terranova owns (FCX)
Terranova owns (APA)
Terranova owns (PEP)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (DRYS)
Virtus Investment Partners own more than 1% of (EXR)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (XLK)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Guy Adami
Adami owns (AGU)
Adami owns (BTU)
Adami owns (NUE)
Adami owns (C)
Adami owns (GS)
Adami owns (INTC)
Adami owns (MSFT)
Adami’s wife works at Merck
Karen Finerman
Finerman ‘s firm owns (AAPL)
Finerman and Finerman’s Firm owns (BAC)
Finerman owns (GOOG)
Finerman’s firm owns (GYMB)
Finerman’s firm owns (HPQ)
Finerman’s firm owns (JPM)
Finerman’s firm owns (RIMM)
Finerman’s firm owns (SKS)
Finerman’s firm owns (TGT)
Pete Najarian
Pete Najarian owns (GS) calls
Pete Najarian owns (HPQ) calls
Pete Najarian owns (RIMM) call spreads
Pete Najarian owns (X) calls
Pete Najarian owns (TCK) short calls
Pete Najarian owns (CNI) short callls
Pete Najarian owns (WDC) calls
Pete Najarian owns (STX) calls
Pete Najarian owns (TEVA)
Steve Cortes
Cortes is long (FCX)
Cortes is long the S&P 500
Cortes is long Canadian Dollars
Cortes is long Australian Dollars
Cortes is long Crude oil
Cortes is short (XLF)
Cortes is short the Japanese Yen
Cortes is short the British Pound
Cortes is short U.S. Treasuries
Gary Shilling
Funds managed by Shilling own U.S. Treasuries
Funds managed by Shilling own Eurodollar Futures
Eric Jackson
Jackson is short (JCP)
Jackson is short (DDS)
Jackson is short (SKS)
Jackson is short (JWN)
Jackson is short (BWS)
Ron Shah
***No Disclosures***
Mike Khouw
***No Disclosures***
—Reuters contributed to this story