First it was Greece, then it was Italy - could Spain become the next market hot spot?
That was the chatter on the Street with investors attempting to determine if thebond market was trying to send a signal – by driving higher, the interest rate Spain must pay to borrow money.
Specifically, the yield on 10-year Spanish bonds climbed 25 basis points, or 0.25 percentage point, to 6.10 percent at 4 p.m. London time
The spike comes after what some consider a Freudian slip by S&P - the ratings agency sent out a message saying it was downgrading France’s credit rating latest week, only to retract the downgrade 90 minutes later, saying the earlier message was sent in error.
”Europe appears to be in a downward spiral,” says trader Stephen Weiss. And it's dragging the US stock market with it.
The action comes in sharp contrast to the relief rally triggered late last week after lawmakers in Italy approved economic reforms. Instead on Monday investors were again reminded that Europe is “the biggest risk out there,” says Weiss. And they hit the buy button accordingly.
In other words don't get too bulled up on single stock stories. “Even if an individual stock has a great story, if the market goes down – then 70% of stocks go with it,” adds trader Steve Grasso.
As it turns out that selling may have been prudent. Another shoe did, in fact drop in that sector. Moody’s said it had placed Credit Suisse under review ”It’s calls Europe’s banks into question, all over again,” says Weiss.
What’s the trade?
”I’m short the euro – every time it ticks up I go short – I think it goes to parity,” says Weiss
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Trader disclosure: On November 14, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Najarian is long AAPL; Najarian is long C; Najarian is long WFC; Najarian is long MS; Najarian is long INTC; Najarian is long YHOO; Najarian is long WFT calls; Najarian is long GE; Najarian is long GRPN; Weiss owns WLP; Weiss owns RIG; Weiss owns UO; Weiss owns MOS; Weiss owns SPY puts; Weiss is short TCK; Weiss owns RIMM; Weiss owns HPQ; Weiss owns WLT; Dicker owns Apache
For Steve Grasso
Stuart Frankel & Co and its partners own CSCO
Stuart Frankel & Co and its partners own CUBA
Stuart Frankel & Co and its partners own GERN
Stuart Frankel & Co and its partners own HPQ
Stuart Frankel & Co and its partners own HSPO
Stuart Frankel & Co and its partners own MET
Stuart Frankel & Co and its partners own MU
Stuart Frankel & Co and its partners own NYX
Stuart Frankel & Co and its partners own PRST
Stuart Frankel & Co and its partners own XRX
For Zach Karabell
Rivertwice has short puts AAPL
For Liz Dunn
No disclosures
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