GM an Unlikely Hero - Fast Money Recap (7/1/08)

Recap of Fast Money, Tuesday July 1.

GM (GM) Saves the Day

Dylan Ratigan said Wednesday was a "wild ride" with financials bearish and commodities bullish. Karen Finerman said GM was "the unlikeliest of heroes" because its losses were just a bit less than expected. While he was not ready to declare a green light for GM, Guy Adami, who recommended the stock earlier in the week, said it would be alright to be long GM. Concerning the S & P, Tim Seymour noted the close was positive especially considering the Volatility Index fluctuated, but Najarian called the apparently good results a "mirage" and says the S & P has room to decline. He added the credit crunch and oil are continuing to create problems, and Tim Seymour says the issues are also global.

Banks Bounce: Lehman Brothers (LEH), Bank of America (BAC), SPDR Financial (XLF)

After a long down period, the banks actually perked a bit on news Lehman will not have a larger write-down and Morgan Stanley said LEH was a buy. Bank of America announced it is purchasing Countrywide Financial. Although XLF performed well, Najarian still would not touch financials.

Apple's (AAPL) Still Sweet: Research in Motion (RIMM), AT & T (T)

Apple's stock rose as Lehman predicted sales will be bullish for the iPhone and Mac notebooks. Najarian says he is pleased he holds shares in Apple as well as Research in Motion and likes semiconductors. Guy Adami would go downstream to AT & T.

Options in Prudential (PRU), HSBC (HBC)

Najarian noted heavy buying in September options in Prudential and would keep an eye on HSBC put buying.

Inflation Nations:

Japan's Nikkei was down for the ninth straight day, and Turkey's index fell hard on inflation concerns. Tim Seymour says emerging markets are risky, particularly in countries which have an inflation rate which is higher than the cost of savings.

Heavy Metal Costs: Alcoa (AA), SPDR Metals and Mining ETF (XME), Coal (KOL)

Alcoa and XME fell on concerns about rising raw costs. Adami said Alcoa is not an earnings story but may be good as a takeover and thinks it will be a "monster" six months out. Najarian still believes in steel and noted KOL was up 5%.

Starbucks (SBUX) Perks

Starbucks announced it is closing 600 of its most sluggish stores and Karen Finerman welcomes the move.

Shorting the Shorts: VM Ware (VMW), Sears (SHLD), Under Armour (UA)

Stacey Gilbert, Susquehanna Market Strategist discussed a strategy for playing stocks with excessive short positions; she would buy calls and sell the corresponding put. The strategy will build a synthetic position in a stock which will increase the gains during a short squeeze. Gilbert would look at VMW, SHLD and UA.

More War in the MidEast? Halliburton (HAL), Schlumberger (SLB), ConcoPhillips (COP)

Oil rose on news Israel may be more likely to attack Iran as the latter comes closer to producing enough enriched uranium to build a bomb. General Barry McCaffrey commented that while it is important for Israel to look strong, he doubts there will be an attack. Guy Adami would buy oil services, such as HAL on the news and Najarian recommends COP and SLB.

ECB Hike?

Although German Finance Minister denies the European Central Bank will raise rates, others feel it is a done deal, given rising fuel prices. Guy Adami, however, thinks rates will remain unchanged and Finerman believes the hike may be priced in but if it isn't "look out below."

Biotech Cures: Elan (ELAN), Wyeth (WYC), Myriad (MYGN), Novartis (NVS), Celgene (CELG)

Pete Najarian thinks Biotech is a good place to go while the economy continues to slow, since medicines are always needed. His picks in the space include Elan, Wyeth, Myriad and Novartis. Adami still likes Celgene.

Star-Spangled Stock: Target (TGT), Wal-Mart (WMT)

Continuing his series on patriotic stocks, Guy Adami discussed all-American retailer Target, which had been a short play while it was suggested to be long Wal-Mart. Guy Adami recommended reversing this strategy since Target is now cheap and Wal-Mart is expensive.

What Are Binary Options

Jon Najarian came on the program to discuss binary options, which began trading on the CBOE for Vix and the S & P. Binary or "all or nothing" options will pay a fixed cash amount if the index settles at or above the strike price at expiration, and nothing if it is below the strike price at expiration. The new options are expected to attract individual and institutional investors alike.

Final Trade: Finerman: Merck (MRK), Najarian: Prudential (PRU), Adami GM (GM)

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Comments

[AmesTiedeman]

All of this crap is going lower.