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PROFIT FROM THE PANIC
Mortgage loan blowup, Yen carriage trade, the blame game goes on and on. What’s your next move? Should you run it high on defensive stocks or do you step up against the croud and buy more?
The TOP 3
Erin Burnett: The HeiressWhat’s the trade as stocks complete worst week in 4 years?
Jeff Macke:Things are going to get worse out there. S & P 500 (.SPX) end of the day today was brutal. I was looking for a bounce up, a counter turn rally on a friday afternoon. did not happen. That goes very poorly for next week. Should you get defensive or buy more of this week’s losers?. Dow drops 120 points today, worsening weekly slide. Dow falls 4.2% this week in worst percentage plunge since March 2003. Dow down 533 points since Monday in worst weekly point drop since July 2002. Still making my shopping list for next week HPQ. Did not like what i hear from DELL yesterday.
Strazzini:We are going to have up days in the next couple weeks. If you are looking at it as this is a bounce, time to pull back in, just under stand that when you see the speculative names, the company that still needs funding financing, like in poker, they still need a card to make a hand, those are the company that will get left behind in this market. You need Large Cap names. You need made hand companies, they have given guidance for the year, confirmed that they have strong balance sheets, these are the companies that you want to be in. If you need to put money back or you want to make short term trades to make money, stick to the high quality, the dow names, the transportation names, the well founded companies.
What’s the trade as stocks complete worst week in 4 years? Should you get defensive or buy more of this week’s losers? Nasdaq plunges 1.5% today, worsening weekly slide. Nasdaq down 147 points since monday in worst weekly point drop since sept 2001. Nasdaq is down 2% year to date. S&P plunges 4.4% since monday in worst weekly percentage drop since Jan 2003.
Adami:Lockheed Martin (LMT) and Boeing (BA) but you’ve got to weather out march first.
Bolling:Markets correct, they don’t correct in one day. Bolling is short Nasdaq and S&P futures.
Liesman:Not seeing the real economic signals inside either the trades this week or inside any of the variables that are out there. If it’s such a big recession then why is gold down? why is oil flat? Oil odd to sell off if there is such a recession signal. Brokers got taken down. Disagrees with Strazzini on 2 points. Not right about companies needing financing. Spreads, high yield spreads are still relatively tight. This was a financial melt down, more then an economic melt down. It’s about liquidity in financial, it’s not about the economy.
Bolling:Predicts another 500 points in the next week or 2
Erin Burnett: The HeiressIs there any one who will say that this is the beginning of a bear market?
Macke:In the next 2 weeks, we have got a lot of volatilities coil into the markets. Corporate spreads are going to widen out. A turn down in the markets, there are a lot of things that if they hit, the markets could easily be down another 5 or 10 percent.
Erin Burnett: The HeiressBottom line: We could get 5% more we could get 10% more but none of them are bears and none of them thinks that it’s time to panic.
NUMBER 2: Market’s fate lies in the consumer’s hands as gas prices rise, sales figures hit the street. The consumers will be in the crosshairs next week. Confidence is down, gas prices are jumping, the housing market is cracking. Next week retail chains will give winter sales figures. Costco and Saks will report earnings. Government will release report on unemployment. It’s judgement week for the consumer and retail stocks. Will they rescue this market or send it lower?
Macke:Gas prices when gas prices higher then the year before, the consumers tends to tighten up a little bit. The gas break out concerns me. We are getting reports next week from Costco, SAKS, American Eagles, Outfitters, I don’t like any of them right now, but of those, in longer terms, Costco is the favorite of those names. I am a SELLER.
Bolling:S&P 500 vs Tesoro (TSO): S&P has a big down turn, TSO held it’s up trend, why? it has gas. This is the begining of the driving season. Gasoline, it’s a buy.
Adami:Great turn around story. Saks (SKS).
Macke:Red flags, get out of retail.
Bottom line: Red flag, a lot of consumer reports coming out next week.Hold back. Gas prices are rising, that means there is opportunity in the energy sphere. Buy to soar.
NUMBER 3: Traders find there’s nowhere to hide as even gold plunges, falling 6% on week.
Fool’s gold trade. Gold usually a safe haven in times of market crisis, falls 6% this week. Puzzling some of the most experienced wall street players. What’s the trade when there is no shelter from storm?
Bolling:Gold is not a hedge against market down turn. It’s an inflation hedge. Everyone pilled up gold at the same time. Gold falls $20.80 today in worst 1-day dollar drop since last october. Japan pilled up by people who are involved with the Yen trade. They bought gold with their cheat Yen. Dollar has been taking a beating, people buy gold.
Bottom line: Diversification usually still works. Gold didn’t do what we thought it would do this week, but none the less, it’s a good idea to have in your porfolio.
Erin Burnett: The HeiressThe Fast Minute: Shanghai Coposite index plunges almost 9% just one day after the market hits an all time high. Shot hear around the world. The selling begins. There is a gap of 180 points just added to the dow industrial average. Time to Panic? The worstday in the US stock markets since 2003. The day after, China rebound. Some relief, rally from the depths. In the green in all the major indices. Correction casualty: brokers stocks.
Strazzini:Will lehman, wall street stocks be left behind as market recovers?
Adami:Goldman Sashs (GS) Buy. Is anything housing-related dangerous to own? Non residential SPDR S&P Home bld (XHB) I still like.
Bolling:Stay away.
Macke:Home depot, buy on the turn.
International emerging market?
Bolling:EEM, EWY,EWS,
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