Word On The Street
WORD VIDEO HERE
Apple Computer Trade
A number of brokerage houses raised their price target on Apple Computer (AAPL) due to the cheap price of the new 3G iPhone. Citigroup upped its price target to $287 from $248 and Lehman Brothers raised its price target to $234 from $202. Macke said that Apple’s partners like Synchronoss (SNCR) sold off today. Adami thinks Apple can trade up to $200.
Strong Dollar Trade
The traders discussed the possibility of the Fed raising interest rates in the near future. Seymour said the Fed is worried about inflation and that was evident in Ben Bernanke’s comments on Monday. He said he sees no reason why the Fed can’t hike rates with the current state of the U.S. economy. Adami said the Fed could definitely raise rates. Macke wasn’t so sure. Finerman thinks the Fed might hike rates by a quarter-point. Adami said if they do raise rates get out of Gold. Finerman suggested shorting the pound with the CurrencyShares British Pound Trust (FXB) and short the euro with the CurrencyShares Euro Trust (FXE). Macke advised investors that if the dollar rallies multinationals could get hurt. He issued caution on Coke (KO), Hewlett-Packard (HPQ) and McDonald’s (MCD).
Oil Trade
The traders talked with Joe Terranova, chief alternative strategist for Phoenix Investment Partners about how to trade crude oil inventory report. Traders are expecting to see a rise in inventories from last week. The Energy Department is set to release the petroleum inventory data at 10:35 a.m. on Wednesday. Terranova said he expects to hear that gasoline demand has fallen, which would be bearish for the refiners. He disclosed that he has sold his refiner stocks. He suggested getting long the integrated names like Hess (HES). He said he covered his short position in HES last week and he is long the Canadian dollar.
Big Rally Trade
The traders spoke with Miller Tabak chief bond market strategist and RealMoney.com contributor Tony Crescenzi about the potential of a big rally in the U.S. stock market next week. Crescenzi said the market has an 80% chance of rallying 500 points if the G-8 makes bullish dollar comments at a meeting in Japan, OPEC raises oil production and if Goldman Sachs Group reports strong earnings. Adami said investors should position for a big down move in oil and gold and a big up move in stocks on Friday. He advised using tight stops for the trade. Macke and Seymour expressed doubt that U.S. equities will rally in the near-term.
China/Russia Olympic Trade
The Beijing Olympic games are set to kick off in two months and Russia is set to host the winter Olympics in 2014. What is the trade? Seymour explained that China has made mistakes with social, economic and political decisions ahead of the games, and traders have already priced in the Olympic games. He said sell iShares FTSE Xinhua (FXI) and buy UltraShort FTSE Xinhua (FXP). Turning to Russia, Seymour said the best way to play the country is with Market Vector Russia ETF Trust (RSX), but not for the winter games. He said Russia is one of the cheapest emerging markets.
POPS&DROPS
POPS- Marvel Entertainment (MVL) popped 7% ahead of this weekends opening of “The Incredible Hulk.” Adami said he is excited about the movie. Disney (DIS) rose 2% after the company said retail merchandise sales could surpass $30 billion. Macke said the stock still can’t get out of its own way. Pall Corp. (PLL) traded up 5% after the filtration and purification company beat Wall Street estimates by 4 cents. Adami said it’s a good company. United Rentals (URI) surged 13% after the equipment rental company said it would buyback $27.2 million shares of its own stock in a Dutch auction. Finerman said not a bad idea. Pier 1 Imports (PIR) soared 11%. Macke said get out.
DROPS- Garmin (GRMN) dropped 6% after news broke that Apple will be using competitor TomTom’s software in the 3G iPhone. Finerman said the new iPhone is bad news for Garmin. BHP Billiton (BHP) dropped 3%. Seymour said that China is looking to take a significant stake in BHP.
Face2Face
Lou from New Jersey writes, Do you guys have any investment that won’t make me worry myself sick on a daily basis?” Macke said buy blue chips like Wal-Mart (WMT), Microsoft (MSFT) and Disney (DIS). Tad from Illinois writes, “How will a strong dollar affect Boeing (BA)?” Finerman responded by saying a strong dollar will hurt Boeing, because a weaker dollar allows them to sell planes cheaper abroad. Steve from California writes, “When crude oil gained $11 last Friday, most oil stocks were down and I have noticed this divergent condition on other occasions. What’s going on?” Seymour explained that when oil prices spike higher investors get concerned about the sustainability of higher crude prices and it sends the price of gas higher, which lowers demand.
Final Trade
Macke said Disney (DIS) could trade up to $40 by this time next year. Adami picked Deere & Company (DE). Finerman suggested traders buy puts on the SPDR S&P Metals and Mining (XME). Seymour said sell Tenaris (TS).
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