Word On The Street
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Apple Talk
Najarian mentioned that the market ignored Apple (AAPL) 4% slide today. He feels the stock is falling because rumors are swirling that CEO Steve Jobs has some health issue. Macke said if Jobs leaves for any reason Apple is in big trouble.
Microsoft Aftermath
The traders spoke with Jeff Lindsay of Stanford Bernstein about the news that Microsoft (MSFT) and Yahoo (YHOO) merger talks have completely fallen apart. Lindsay says the big loser is Yahoo and he doesn’t think Microsoft wins either. He explained that Yahoo’s stock price will be based on a deal with Google (GOOG). He said if Google and Yahoo team up Microsoft will be the loser.
Inflation Talk
The Consumer Price Report (CPI) is set to be released on Friday and many market players are expecting a high reading. The traders spoke with Economist Michael Darda about what to expect from the report. He warned investors that if the University of Michigan survey comes in ahead it would mean intimate rate hikes. Darda said the number will be hot and he thinks the fed will raise rates soon. He advised investors to stay with stocks that work during periods of high inflation. Darda explained that if Bernanke can show he has inflation under control the dollar could rally and crude oil could fall. Najarian said if the Fed hikes rates the dollar could rally big. Macke thinks the CPI will be hot and confidence will be weak. He told investors to sell rallies because the market looks terrible.
Market Volatility
The traders discussed the extremes in market volatility. Najarian pointed out that the market is breaking 100 and 200-day moving averages and that’s making average stocks more volatile. He explained that the current market environment is best suited for a trader, not investors. He advised investors to ignore the extreme movements.
Energy Trade
Joe Terranova from Phoenix Investment Partners joined the traders to discuss natural gas and crude oil. He thinks crude oil will touch $140 next week and natural gas could jump another 10%. He said natural gas could trade up even more if a hurricane hits, but he thinks the peak for nat gas will come in early July. He recommended investors play nat gas with United States Natural Gas Fund (UNG), Apache (APA), and Chesapeake Energy (CHK). Najarian disclosed he is long CHK and he likes wind and solar names here.
Pharma Food Trade
The traders talked about some trade ideas for companies that sell foods with health benefits. Macke said the whole idea is a scam, but if he was going to trade it he would pick Wal-Mart (WMT). Adami recommended Hansen Natural (HANS). He also mentioned that UBS has picked HANS as its top stock for the sector a couple weeks ago.
POPS&DROPS
POPS- Anheuser-Busch (BUD) popped 5% after InBev made a $46 billion takeover offer. Applied Biosystems (ABI) traded up 5% on a buyout announcement from Invitrogen (IVGN) for 6.7% billion. or $38 a share. Palm (PALM) rose 10% after landing a Verizon Wireless contract for its low-priced Centro smart phone. Macke said to take profits. Qualcomm (QCOM) advanced 6% after the company raised its guiadnce for the full-year. Nortel (NT) rose 9% off a JPMorgan upgrade to overweight from neutral. Cyberonics (CYBX) jumped 7% after the medical device maker said sales for 2009 will be above Wall Street estimates. Finerman said the company has improved and is making money. Honeywell (HON) added 3%. Najarian reminded viewers that he highlighted the bullish options activity yesterday on HON.
DROPS- Jo-Ann Stores (JAS) dropped 10% after Soleil Securities downgraded the stock from buy to hold. Dreamworks (DWA) fell 4% after UBS downgraded the stock to sell from neutral. Adami said the buying is over and investors should stay away.
Final Trade
Macke picked Disney (DIS). Adami said buy Lehman Brothers (LEH) for a trade. Finerman selected Microsoft (MSFT). Najarian recommended Dell (DELL).
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