Bernanke, the Greatest Speculator - Fast Money (6/25/08)

Recap of Fast Money, Wednesday June 25.

Fed Stays Steady

Stocks were up steady after the Fed kept rates steady for the first time since a series of rate cuts initiated last September. Bernanke said that downside risks to growth remain, but are less severe and inflation’s expectations have increased. Karen Finerman says Bernanke is trying to get the effects of raising rates without having to raise rates. Guy Adami thinks the Fed is just delaying and will eventually hike rates. Joe Terranova calls Bernanke “the biggest speculator in 2008, stating how he believes oil is going down.”

RIM Decline: Research in Motion (RIMM)

Although RIM reported a higher profit, it didn’t quite meet analyst expectations and was “an abomination after hours,” observed Dylan Ratigan. Najarian says this drop is a “great opportunity to add” especially with 2.3 million new subscribers and new releases on the horizon. Najarian says this is a great time to buy RIM.

Nike (NKE) Untied

In spite of a quarterly profit, Nike stocks dropped on news its advance orders were slow. Finerman noted the company’s use of rubber makes it vulnerable to expensive oil. Adami discussed Nike’s light margins and the lack of support in the technicals. He thinks the stock could fall to $61.

Oracle (ORCL)’s a Profit

Oracle rose after hours on strong software revenue and Adami thinks the BEA System’s acquisition is paying off, but he thinks Oracle is too high to buy and would wait for a dip. Najarian disagrees, and would pick up some Oracle.

Oil Rollercoaster

Oil declined slightly on news of rising inventories, but rose after the Fed’s decision to leave interest rates unchanged.

How Low Can Gold Go?

Gold declined on Wednesday, and Adami thinks the yellow metal is headed lower. He noted it has hit $930 twice and thinks it will dip to $820.

Running Away from Homes: Hovnanian (HOV), Beazer (BZH), K.B. Home (KBH)

Housing prices and sales declined, but HOV and BZH performed well on Wednesday. Finerman says the stock performance does not signal a bottom and if one buys in this sector, beware of companies with a lot of debt. Adami agreed about KBH’s debt, but says it might have a few days of upside.

Lazard to the Rescue: UBS (UBS), Lazard (LAZ), Greenhill (GHL)

UBS, which has been hit hard by the credit crisis, asked Lazard to help it reorganize its businesses. Adami says while Greenhill is a lottery ticket, an M&A will bring it higher.

Monsanto (MON) Blighted

While Monsanto reported strong profits, the stock fell 6% because the company was expected to have as stronger performance. Joe Terranova thinks this indicates farmers are not going to buy more fertilizer after the floods and Finerman would also stay away. Adami thinks the decline may continue, but adds Monsanto is a long-term buy.

Give and Take: AT &T (T)

Sanford C. Bernstein raised ratings on T to “outperform” but slashed its price target by $2. Adami thinks AT &T is a buy here with a stop at 5% on the downside.

The Meeting That Never Happened

Dennis Gartman said commodities are trading as if the Fed meeting never happened, although oil did well at the end of the day, and he predicts gold will be strong in the morning. Gartman also mentioned the U.S. is the “Saudi Arabia of coal,” and is bullish on the black rock.

Boeing (BA) Busted: Rockwell Collins (COL)

Goldman Sachs lowered Boeing’s rating to “Sell” and says the entire sector will be affected. Rockwell Collins CEO, Clayton Jones says his company won’t be terribly affected, since only 20% of the revenues are levered to Boeing and Airbus. Jones says the company will continue to increase operating margins and increase return on investments. Guy Adami says he likes the stock, but Finerman is concerned about oil prices.

So Refined: Tesoro (TSO)

Lower oil might be good for refiners, like Tesoro, said Najarian who likes insider buying in the company. Najarian says Tesoro “has legs.” Joe Terranova wouldn’t touch refiners and would not use them as a vehicle to trade lower oil.

Presidential Pharma: Merck (MRK), Novartis (NVS), Cepheid (CPHD), Myriad Genetics (MYGN), Immucor (BLUD)

Pharma is going to be hit hard by the Presidential elections, since both candidates promise to revamp healthcare. Najarian predicted a McCain victory will be good for Merck, Novartis should do well, regardless of who wins and an Obama presidency will benefit diagnostics CPHD, MYGN and BLUD.

Fast & Furious: Lennar (LEN), Mastercard (MA), Micron (MU)

Adami wouldn’t touch Lennar on its earnings tomorrow. Discover will report on Wednesday following a comment from Mastercard that customers aren’t paying promptly. Finerman would take a look at Mastercard. On bearish comments about the chip space, Najarian likes Micron. Adami says beware of the unemployment number.

Final Trade: Terranova: Freeport-McMoRan (FCX), Adami: AT&T (T), Finerman: Microsoft (MSFT), Najarian: Nokia (NOK)

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