The Top 3- August Outlook, Starbucks, Sneak Preview: Media Earnings
August Outlook
Is the bull market in for trouble ahead? The S&P 500 is now lower for the second month in a row. The sectors leading the fall are the financials and consumers. Higher borrowing costs has taken liquidity out of the markets for the bulls. Is now the time to rest easy? Eric Bolling talked about how August is a slow month with lots of traders and market players away from Wall Street. He feels that now could be a good time to buy energy and technology stocks on weakness, but stay away from the financials. Jeff Macke would only buy market weakness and sell rallies for a trade. He said “if it’s up whack it.” Macke feels that the trend in the stock market has reversed.
Top three #1 video.
Starbucks
Starbucks Corporation (SBUX) stock is now down 25% since last July. Will a 9 cent increase in coffee prices help to fuel this stock higher? Eric Bolling was recently in a Starbucks and he noticed that 10 people were using Apple Inc. (AAPL) iPhones. Starbucks is planning on setting up all stores with WiFi. Research In Motion Limited (RIMM) recently launched a new phone with WiFi and Eric thinks Blackberry and iPhone users will start to hang out more at Starbucks. Bolling thinks the chart looks ok here. Jeff Macke would buy Starbucks ahead of the earnings and sell it after. Pete Najarian was bullish on the options activity in the calls for Starbucks. Pete also liked that the CEO Howard Schultz exercised calls but didn’t sell any common stock. Pete would also keep an eye on Green Mountain Coffee Roasters Inc. (GMCR).
Top three #2 video.
Sneak Preview: Big Media Earnings
Time Warner Inc. (TWX) and The Walt Disney Company (DIS) will release earnings on Wednesday and Viacom Inc. (VIA) will report on Thursday. CNBC Media Reporter Julia Boorstin joined the “Fast Money” crew to talk about the media plays. Julia thinks Wall Street is really watching the ad revenues at AOL. Julia moved on to Disney which she says has room to surprise the street. She thinks with a strong euro and weak dollar visitors from abroad have been lured into the theme parks. Pete Najarian doesn’t like DIS. Bolling thinks if Disney gets a little bit lower it’s in trouble technically on the chart. Julia finished with Viacom Inc. (VIA). She feels the street will be watching the cable network numbers. Guy Adami was bullish on the stock. Jeff Macke was bearish and said “get out.” Julia says Paramount could be having a turn around here.
Top three #3 video.
Sea Change
The future of wireless technology could now be upon us. WiMAX is a wireless protocol that could be faster and more mobile then anything we have now. What’s the trade? Atish Gude of Mobile Broadband for Sprint Nextel Corporation (S) joined the crew tonight to discuss WiMAX. On Tuesday the FCC approved the open access provision that will let consumers to use any phone and software they want on one-third of the spectrum that is going to be auctioned off. Google Inc. (GOOG) and Sprint announced last week to collaborate on WiMAX services. Ratigan asked why is the FCC ruling such a big deal? Gude responded, “At Sprint we have been advocating the open Internet technology on WiMAX. We’ve always said our WiMAX will be open and we believe it is the future of the Internet and we think there is a great opportunity in mobilizing the Internet for consumers in the U.S.” Eric Bolling followed up with who is going to keep WiMAX secure? Gude said, “What we are building is a new model based on the mobile Internet. The Internet is the great repository of information, knowledge and content.” Ratigan interrupted Gude and asked, but how do you secure an umbrella wireless network? Gude responded, “A technology that’s built on phone technology like 2.5 comes with a lot of security. Unlike WiFi which is completely open. The network that will come with WiMAX will inherently come with a lot of security with it. In addition we will allow corporations to run VPN services which enhance security, so the fear that people have that this is open to snoopers and random other people is not completely true.” Ratigan wanted to know if Sprint Nextel has a deal with Symantec or McAfee? Gude wouldn’t tell him who they are working with, but they are working with someone. Ratigan wanted to know how much the Google deal is worth? Gude wouldn’t disclose numbers, but said it was pretty big. Ratigan felt that Gude was being difficult with him. Pete Najarian thinks the play on this Alvarion Ltd. (ALVR) which claims to be the leader in WiMAX. Jeff Macke thinks its to early to trade this technology.
Word On The Street
Today’s headlines analyzed by the shows cast linked here.
Wall Street Journal: More Troubles At Bear Stearns
The Wall Street Journal reported this evening that Bear Stearns (BSC), which already had to shut down two hedge funds, is now faced with big losses at a third hedge fund that has $900 million in mortgage bonds that aren’t leveraged and has little subprime exposure. Dylan Ratiagn wanted to know if this news could take Bear down? Guy Adami thinks that traders will sell first and ask questions later. Eric Bolling thinks this is concerning and the S&P futures are down on the news. Jeff Macke thinks this news is bad for the financials. Pete Najarian likes Goldman Sachs Group Inc. (GS), but this type of news is why he has a options put spread on.
Face2Face
Fast Money hits the mail bag today in the Face2Face linked here.
Pops & Drops
“Pops & Drops” is a new feature for Fast Money that follows the stocks that were moving for the day. POPS-Under Armour Inc. (UA) was up 14% on a bullish forecast. Pete Najarian was bullish on UA and he feels they are taking it to Nike Inc. (NKE). Sun Microsystems Inc. (SUNW) was up 4% on good earnings. Jeff Macke would stay long and never bet against a guy with a ponytail. The Gymboree Corporation (GYMB) was up 9% on a bullish earnings outlook. Jeff Macke is a seller. Wendy’s (WEN) was up 4% on a takeover rumor. Jeff Macke would sell the news. DROPS-Alcatel-Lucent (ALU) was down 10% on a weak quarter. Guy Adami is bearish on the name. Interactive (IACI) was down 5% on a profit miss. Eric Bolling would avoid the name and look at CNET Networks (CNET). Rent-A-Center Inc. (RCII) was down 20% after cutting forecasts. Guy Adami doesn’t like it because the rent consumer electronics and appliances to people who can’t afford it.
Final Trade
Eric Bolling wants to sell some S&P and NASDAQ futures on a lower opening. Jeff Macke said sell Wendy’s International Inc. (WEN). Pete Najarian wants to buy Alvarion Ltd. (ALVR). Guy Adami said buy EMC Corporation (EMC) because the stock has strength in a weak market.
Final video.