Word On The Street
WORD VIDEO HERE
Lehman Talk
Ratigan moved the conversation on to the general market action. Jeff Macke explained that the Lehman Brothers (LEH) news was hanging over the market all day. The “Chart of the Day” was Lehman Brothers. The stock had a huge volume spike mid-day and shares finished sharply lower by 44%. Pete Najarian said the market is concerned about Lehman right now with all the activity in the put options. “The more the government has to be involved the less healthy by definition the system is,” Macke added. He pointed out that skepticism is running high and it will remain a “traders market.” Karen Finerman mentioned she sold her bullish option leaps on Citigroup (C) today. Najarian told viewers that if you want to play the financials use the Financial Select Sector SPDR (XLF). He also said he added to his put options position in Lehman Brothers today. Finerman thinks that Lehman needs to say something to Wall Street by Wednesday morning
Material Take
Ratigan switched the discussion towards the material sector. Adami said the action today in commodity and material stocks was due to forced liquidations in some unknown hedge funds. He feels that Freeport McMoRan (FCX) has value here. Najarian said don’t be a hero right now in the ag names like Potash (POT) until they show some signs of recovery. Finerman pointed out that AK Steel (AKS) has been cut in half and the stock intrigues her here.
Technology Chat
Next, the traders discussed the technology sector. Najarian said the catalyst for Apple Computer (AAPL) will comes next month with the iMacs. He did mention he was happy that Steve Jobs looked healthy in today’s meeting. Macke thinks the board of Apple has a credibility problem. He feels the board should have discussed Job’s cancer issues earlier.
Lehman With Trone
David Trone, senior analyst at Fox-Pitt & Kelton joined the trades to discuss Lehman Brothers. He mentioned that some speculation on the street was that the Fed would close the window to Lehman and let the stock go to zero. Trone thinks Lehman’s best moves could be to conduct a fire sale of assets, take the investment bank private or divest itself from commercial and residential mortgages. However, Trone doesn’t think that Lehman has enough time to pull the last one off.
GoogTV
Mike Steig, director of Google TV ads joined the traders to discuss Google’s (GOOG) new deal to sell TV advertising for NBC Universal. Steig said the impact on revenue for Google TV ad partners will be positive. “In times of uncertainty ad buyers will spend less not more. So if they can be certain that people are watching their program, the ad buyer will invest,” he said. He told the traders that the Google’s TV ad technology system has been built to fit all kinds of TV inventory. He explained that Google will make money on the deal as the broker in the process.
Technology Stock Trades
Ratigan asked the traders to pick one name each that is worthy of a trade right now in the technology sector. Mack said buy Research In Motion (RIMM) at $100 with a stop below $95. Adami said he likes Oracle (ORCL) ahead of their earnings report with a stop at any close below $18. “Buy Microsoft (MSFT) which is ridiculously cheap, with a stop at $25,” added Finerman. Najarian recommended Hewlett-Packard (HPQ) with a stop at $44.
Tracking The Flow
Charles Bidermam, CEO and founder of Trimtabs Investment Research joined the traders to discuss the money flows he is seeing in the mutual fund world. Biderman said money is leaving U.S. equity funds along with the global equity funds to the tune of $50 billion over the last three months. “Companies are buying but individuals are bailing,” he added. Biderman explained that we have had $86 billion in outflows over the last 12 months and the last time he saw such huge outflows was at the bottom in 2002. He thinks this is a tremendous buying opportunity in the markets due to the forced selling and liquidation in the hedge fund community.
Trader Radar
Shares of Pep Boys (PBY) were among the most actively traded stock on the NYSE today.
More Lehman
CNBC’s Charlie Gasparino joined the trades to discuss Lehman Brothers. He said there’s a 100% chance that in the next 24 hours we will hear from Lehman about their earnings. He said the smart money on Wall Street thinks Lehman CEO Dick Fuld is on the phone right now trying to work something out – like a sale of the company or a sale of their mortgage portfolio. He thinks there’s no doubt that Lehman will preannounce their earnings. “Lehman will give us some clarity,” Gasparino added.
Final Trade
Macke said buy Research In Motion (RIMM). Adami picked McDonald’s (MCD) Finerman went with Microsoft (MSFT). Najarian recommended Novartis AG (NVS). Chat and share ideas with the best small cap traders LIVE each day free at Stocknetworkonline.com