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Just when you thought we had used up all the superlatives for suffering, along comes a 500-point weekly drop in the Dow. And as you search the sea of red on you computer screen, hoping against hope to eke some profit out of all this pain, you might want to familiarize yourself with a term that is quickly gripping the market: counter-party risk. At the heart of the market's sell-off has been the notion that the vast financial engineering that was supposed to protect us from worst-case scenarios might in fact be failing us. But as I say every week in this column, an open market is one in which we can all make money, and with an eye on next week, let's try to do that right now. Earnings season finally kicks into high gear next week. Of particular interest will be Ambac's results on Tuesday. Much of the financial turmoil begins and ends with the bond insurers, and any update they can provide as to their AAA-rating and capital base will go a long way to either unnerving or assuaging the market's anxiety. The rest of earnings season so far has been a pretty mixed bag, with financials like Merrill and Citigroup getting slaughtered by the suprime slime, but other names doing well. GE, the parent company of CNBC, posted some of its best results in years. And tech blue chip IBM also turned in stellar results. Can we expect the same from Tech names like Apple, EBay and Microsoft when they release their respective results on Tuesday, Wednesday and Thursday? The Fast Money will be watching. Also worth watching will be the performance of Big Pharma when Pfizer and Johnson & Johnson report results. Drugs stocks, and to a larger degree healthcare names, will begin to attract more attention as the election heats up. And if the market continues to tank, and rates continue to fall, investors may begin to flock to defensive names with healthy dividends. Keep drug stocks on your Fast Money radar. And keep your head up. Anyone can make money in an up market. It's the tough times that test your trading mettle. I've said it before, and in a market like this, these words could not ring more true: an open market is one in which you can make money. And we will try to just that all next week. I hope you join us.. If you have questions about The Final Trade or suggestions for Fast Money, please send an email to FastMoney@cnbc.com |
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