Hello From the Other Side? And Bitcoin Puts in Another Big Week
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Despite the spike in cova cases around the country companies are looking out to the other side of the pandemic as we make progress on vaccine pfizer. Just out today with big news that apply for fda emergency use of its vaccine in corporate america. Sending signals of an all-clear nike merck. Tj calls kosto all either increased or reinstated dividends this week until we start to wind down earning season more and more companies are getting comfortable. Forecasting the future. The number of businesses issuing forward guidance is a thirty percent from last quarter so corporate. America's looking to the other side is the time for investors to do the same brian kelly. What do you say well. I think it's great first of all that corporate investors corporate Corporations have a little bit more clarity. But that's what this whole reopening trade was about from the bottoms. That was the whole thing that you're not gonna have any clarity but when you do boy then it's going to be really good so let's look what we have this week. We had a good news on the vaccine. We had multiple companies up their dividend. We also had multiple companies. Come out and feel much more comfortable with giving guidance however the market was basically flat to down this week so to me. This information is probably already priced in and of a home game and saying is now the time to get in. It's probably not at least not on this news now. We still have this. Tug of war is the vaccine going to be ready enough or we're going to have another walk down and we're going to have a q one. Gp parent that's negative. That's the tug of war that's going on in the market and the news we got this week didn't resolve that unfortunately and that's exactly what j. p. morgan is forecast contraction in q one but seek. Rosso aren't aren't we sort of just throwing out next year. In a way when it comes to multiples. I mean in a way are investors looking through and just saying you know what. It's a passer almost. I don't know if they're going to say it's a passer. I think the bar has gotten higher. So i agree. With the fact that companies now over said have a little bit of visibility because think back to march. There was nothing we were flying blind. We were flying blind on the show. We're fly corporate. America was flying blind. Everyone the world was flying. Why now you have a flashlight. You don't have a spotlight. You have a flashlight. So i think people are starting to get more comfortable with the market more comfortable with earnings. But let's remember nike. This will make it the nineteenth consecutive year that they raise their dividends. So i'm not sure if there's not a little bit of dressing up the window if you will. I don't think that it's a contrived issue that they're doing but just think about it. I think b k. makes a great point. Is this the top. is this a cell. The news event. We've seen vaccine a lot more beneficial news. We've gotten clarity on the election. So and we've seen that balance of power with the republicans in the senate we've gotten basically a goldilocks environment for what has been a terrible plague. That hit this country and the world. So if you're saying are we through it. I don't think we're through what i think. The market is pretty good at navigating. And saying hey you don't want i think the worst is over and we have asked that question. Are these events the cell the news events whether be getting that vaccine news having clarity as to win the first distribution could be made and getting through the the bulk of the volatility of the election. Not say that. There won't be still some volatility but i think the biggest unknowns are now known at least in terms of having a winner bottom so do would you agree that this could be sell the news that would go starkly in the face of what has been a seasonal trade going to urine. Were to go higher. I think given all the fiscal stimulation the support that we've had with all the news today. Notwithstanding right you you do. Have to use steve's term a goldilocks situation where it is prime for risk assets in terms of looking to the other side. I think yes that has been priced in. There has been a look through to the other side. And that really explains rotation out of some of the stay at home names from the technology names into some of the value plays but when i'm looking at these these dividend increases and and and tying all that together right all of those companies with the exception of mark retail companies and. We know that those companies have been able to to be more efficient operating by slashing capacity by slashing workforce and bringing that so that's going to lead to inventory management. We've already seen a rotation out of seasonal hiring so yes there's going to be more cash at hand but what to me it is is that is a signal that we are seeing operational efficiencies leading to digitalization of companies. That is here to stay at. I don't really think that necessarily bode well for employment so again. Two sided coin here. Yeah jeff let your take. I think what we've been seeing has been going on for a little while now. And i know there's been this rotation going on and we've seen that cool off a little bit but let's not forget you know you have value industrials materials banks where you want to go there up some fifteen sixteen seventeen percent on the month. So the fact that they're cooling off a little bit isn't a huge shock to me The dividend story has been playing out for a little while. Now this is the second straight month where we haven't seen any cuts or suspension. So i think that's a good thing. Companies now have two trillion dollars of cash on their balance sheets just as a perspective. The previous peak was about one point six trillion and. I think it's really interesting if you look at small caps you know. Perhaps the most economically cyclical index. You can find and you have seventy percent of all earnings revisions actually being to the upside there. So that's the highest. We've seen in twenty years. So i do think the market is doing a good job of looking to the other side of all of this and i think even if we see a slowdown in q four or q one which is probably likely i think. The market's perception of this slowdown versus what we saw say in february or march is going to be very very different and i think that's what the market's been telling us for some time now as small has beaten large and value is beaten growth interest rates have held in there but i do think stimulus has to be part of the equation here because this case shaped recovery is very real. Ten million people are still unemployed retail sales for example or slowing down. But as i said on the show last week. I think the vaccine news actually make stimulus and twenty twenty one more. Likely because policymakers know they're building a bridge from today to a point in the future where activity can return to normal. So i think you take that in combination. I still wanna play this rotation trade. Even if it ends up being choppy over the next couple of months yeah The general had mentioned small caps. The russell is up two point. Four percent This week brian kelly. Where would you position yourself. And and do you think that's an interesting notion and jeff when you first said that you thought that the vaccine news will make it more likely for stimulus. I sort of was like. I don't know i'm i. It's growing on me. I like it better and better the more i hear it. I'll tell you a brian. Kelly what do you think of that that at least if you know it's targeted you know that there's a about time you might be able to get some republican by into you know. Let's spend this money on on a package. Yeah i think that's right. If you think about you know why didn't we get any stimulus leading into the election. Is that there really. Wasn't any political incentive to do that so now if you have a vaccine you say hey listen. This is kind of a six month problem in a sense. Let's just get through. Let's build that bridge. I think you might be able to get a little bit more political buying. It's not likely to happen until we have the new administration. So i do think the market is incorrect is correct in that sense but again for me. There's just so much uncertainty here in the us. I'd rather look over to. Asia rattled look to japan. I'd rather look to china. And if i look at what's going on with nike bring it back to what we talked to. At the top of the show nineties growth is coming from asia. they're raising dividends and they feel comfortable. I think that's another leg to that kind of asia's going to take the growth baton from here. Yeah and of course. Nike said back in september that it expects the second half of the fiscal year two to be up significantly when it comes to sales biden. Would you agree. Would you say you know. Us may not be the best place to be right now. I mean it's a global pandemic. yes i think. Emerging markets look attractive. I wouldn't say anywhere outside of the us. I think europe so has their challenges. Japan has has a long story pass. And we're seeing a rotation out of that. Buffett is allocates resources there generally speaking. I do like em correlates well. Some of the natural resource plays as we do look forward to getting back to a normal situation and economic environment. Yeah grassley you've been on the natural resource trained to yeah. I mean if you look at the value that fits all into the value. Play outperforming growth play. I've been in the diversified chemical space. So you look at a name trend ceo. It's very levered to europe. So i agree. I think that you can see a lot of these names and ceo oland w. r. k. Really outperform going forward. I'm still in that. Value bucket. expect them to outperform grossly over the next six months. Sorry let's talk a little a zoom today topping. The tape is a stay at home. Trade played out in a big way in today's session. The soft could even higher as year of four. A zoom thanksgiving. That's right families gathered around computers instead of dining room tables this year to keep socially distant zoom knows. It's coming the company's lifting forty minute time limit for free meetings on thanksgiving day. So are you feasting on the stay at home stock ahead of the holidays. I mean theoretically this could be some of the first time people start using zoom a win and they might think this ain't so bad i think zoom is pretty well known at this point and i really don't think this event coming up in the holiday season is really going to be a revenue driver in the sense of looking at this being a long-term or trending new actualization of revenue stream. So no. i'm not buying it on the news. You look forward to the to the sorry. You look forward to the pe ratio twenty twenty one and it's up close at two hundred. It's one of those runs. I don't think now. I don't think this is the catalyst for investing. If you're not and now. I don't think this is a reason to get involved. I mean some context. Obviously just last week. A lot of the at home trade's got slaughtered on the vaccine news and zoom had one of its biggest weekly drops that it had ever seen. Jeff mills zoom here in some of the other. I mean we're talking. Ea for instance peleton. Those are all up. Today they are. You know i'm with a win on this one. I think it's really interesting. You know usually when you see those stay at home names up on the day you also see up on the day you see tech do well. It's kind of an overall virus. Stay at home trade. You did not see that today actually outperformed growth by thirty or forty basis points. Small outperform large by somewhere around seventy five basis points. So i thought that was notable in the sense that that value cyclical trade although down outperform even when the stay at home names were up and i just think you get to a point where the growth and user adoption or whatever. You wanna call it. That's assumed by the valuations just aren't likely to materialize in the future. And that's where. I think we are right now. So it's not necessarily the stocks can't go up from here i think they can. But when you're thinking about relative outperformance and where you wanna be. I wanna be in small caps emerging from two and a half year bear market. I want to be in japan breaking out. After a thirty year bear market. These are areas that i think in outperform over the next twelve months versus some of these other areas that i have just done so well and the valuations are so extended. You probably need to take a breath here. How at a name like palatine. Brian kelly and i. Asking you because are biker You so you have some experience with this area. But it's also theoretically entering a seasonally strong period. I mean going to you're going to january. People typically make all sorts of resolutions about getting in shape and losing weight and here we are peleton right and peleton. I mean peleton's bent on an absolute tear. I do think that's kind of a permanent shift here because those are relatively expensive bikes. Once you buy that. You're likely to kind of stick with that type of thing. But this entire trade. This zoom trade ahead of thanksgiving reminds me of a simpson's episode. I'm a huge fan of the simpsons. You may be to melissa. I'm not sure but homer simpson makes a fortune in pumpkin. Futures makes a fortune but critically homer forgets to sell before halloween. And that's the key. You gotta sell your pumpkin futures before halloween. You gotta sell zoom. You gotta sell those things before thanksgiving because the trades over can connect that to popular culture. Be good for you breaking news here on the vaccine front. Gotta get with all the details. I'm melissa well. After the news that visor and beyond had submitted their application to the fda for emergency use authorization of covid nineteen vaccine. The fda has now set the date for the outside meeting their advisors to discuss the application december tenth. Now that is along the lines of what we had heard they had asked the committee members to set aside december eighth ninth and tenth So it is december tenth to discuss this requests for -mergency use authorization. That is a key step before the fda would potentially green light this vaccine for market and so we are looking at just a number of weeks before this could start to get distributed now. A lot of people wonder why so long while we talked with dr months of away from operation warp speed. This morning noted the fda now that it has the application needs to look through thousands of pages of data and graphs on everything from the efficacy to the safety to the manufacturing standards of this vaccine and analyze all of that and put it together for the committee members then to look through and to discuss and they will release all of that information and briefing documents two days ahead of that meeting on december eighth while at least two days they might release it sooner than that but now we have a timeline from the fda confirmed december tenth for that outside meaning of advisers after that they could green light. This for market definitely. Good news but meg. I'm curious. The fda has digest all those pages of data. Could we see three weeks. After december tenth for moderna e way on review if it takes that much time to get through all that stuff. That's a really good question i mean. Do they have a second set of folks there to be able to look through maderna's application because we are expecting that moderna will file within a few weeks from monday when they had their data So you know within a couple of weeks slough said end of november early december. But he expected that we could be seeing. You know a few days. Apart for these advisory committee meetings for pfizer and madonna and then presumably a few days apart for the fda decision. But you're right. These reviewers are going to have a lot of work to do over the coming weeks. Yeah lots of overtime for that matter. Thank you meg seagrass of your favorite healthcare pick. I think you have to buy a basket of these. And i think you have to buy an index. Because it's what i've been saying for a while. Now if you look at these vaccine plays. They topped out in july. Then we have this secondary headline phase going into the real vaccines and it looks like they tapped topped out again. Pfizer is well off. Its high for just a couple of days ago so when i say well off of it six percent off in the same week so when you start to look at these names melissa. You can't be buying these names. If i asked you what pfizer was up to date. People would get this wrong without looking. It's only a down one percent year to date now. Madonna is up four hundred percent. Because it's been on the scene a lot shorter time. You can't buy the vaccine news. More than one or two pops. I would say sell these names and by the economy versus these names. Yeah we had a jeopardy's analyst who covers all of these names on yesterday who's saying that. He expects pricing to come down dramatically from when the vaccine will first hit the market. And he wouldn't wanna be long. These names as andrew that manufacturing base which could prove difficult bottom. And where do you stand on some of these. I think he makes it a lot. I think he makes a good point. I said for a long time. Listen stephen said i've said guys has said it. Trying to winning horse out of this race is literally impossible. Pfizer was up dramatically and is traded off. You've seen similar price action with modern out. I think you do express this view in some of the tertiary or secondary names because just in the short term. You have price pressure on this vaccine and this is a headline risk. You have to still have a legitimate company of supply of drugs manufacturing efficacy and all of the above to still an operations and do so at margins that that will support the levels that we're at right now so i'm fully in agreement with what he just said all right coming up tan on bear. That's right the solar. Etf in mega-rallies this year. Should you buy or will you get burned or estimates that ahead but first bitcoin going absolutely bananas. What's the player crypto baller. Here he's ready to lay out. Its case stick around much more fast money straight ahead support for this. Podcast comes from boost with facebook. Who's podcast boost. My business with david fisher features unique perspectives and insights from some of the world's most interesting business leaders and small business owners. Check out the third episode where you'll hear the owner of magic fingers studio in brooklyn discussed the power of online community with the ceo of mono music group and co founder of verses. Listen to boost my business. Wherever you get your podcasts. Welcome to fast money. We've got a bitcoin alert. The cryptocurrency making big gains this week up nearly fifteen percent and listen to what blackrock chief investment officer. Rick reader said about bitcoin earlier today on cnbc crypto currencies. Here to stay and say durable and you've seen the central bank sort of talked about digital currencies. I think digital currency and the receptivity particularly millennials receptivity of of technology and crypto currency israel digital payment systems israel. So i think that going is here to stay. Do i think it's adorable mechanism that i think we'll take the place of goal to a large extent. Yeah i do because it's so much more functional than than passing bar gold around. Wow so black. Rock is saying. Bitcoin could replace a gold one day became. I feel like of rick reader tune into fast money circa three years ago. He might have heard the same argument from you. Yes i think he would have. And you know it's nice. It's nice to see somebody like rick being able to say that because i'm sure he's done his research on this and it really reflects the mindset that change in mindset that institutional investors had now versus three years ago so three years ago i've talked institutional investors and they say hey pk. I can't invest in this. My risk management team won't even let me touch it. Now you have institutional investors saying. Hey wait i got a buy this thing i gotta be in it. And that's what we're seeing in the market and that's being reflected in the price and what's kind of interesting what we're seeing. There is in the relatively short term a bit of a coin shortage. So you're seeing institutions high net worth individuals buying coins taking them off exchange putting them in cold storage and they have a five or a ten year view on the and that creates a really a lack of supply. So that's what's been driving the price of the final thing. I would say though is that you have to have a long-term view on this. We did a piece on the show back in two thousand sixteen. Bitcoin was at eight hundred ninety nine dollars and we asked the question. Is it too late to buy bitcoin. And of course the answer now is no. It wasn't right but remember. Bitcoin went from twelve hundred down to seven hundred before it came all the way back all the way back up here so point is you've got to buy bitcoin understand. It's incredibly volatile and have a long term view two thousand sixteen bitcoin on on the show. Amazing coming up. Solar sox are on fire this year with a rally keep up. We'll debate that tradenet support for this. Podcast comes from. Wg you do you want more skilled and effective workforce. Do you want to build loyalty and increase employee retention. A partnership with western governors university could be exactly what you need over three hundred organizations nationwide already count on. Wgn for valuable education benefits that lead to better prepared and more capable workers with more than sixty accredited bachelor's and master's programs to choose from and shorter credential programs coming soon. Wg you has long been a leader and making quality higher education more accessible flexible online. Learning is the key. Students can fit schooling around their existing schedules and even complete courses and degree sooner than planned. Wg you makes earning a respected degree possible with just a computer and an internet connection partner with wgn today to make a smart investment in your companies and employees future learn more at wgn dot edu slash partnerships. That's wg you dot edu slash partnerships. Welcome back to fast money. Time move of the day the invesco solar ticker tan tian rising more than two percent record close. The fund has been on recently in hopes. A biden administration will be more friendly alternative energy on. You've been on the space. You had a fastpitch on this. That worked out well We're with for solar. Where do you go from here. Listen i still think there's room to run here. You talk about the biden administration. We've had some developments. In terms of tariffs one percent is still the renewable energy consumption in the united states. So i still think there's upside. But i think it comes at the expense of traditional energy solar run tan. Still think. They all civic. They all look good here all right time. For the final transfer on the horns. Steve grasso capri holdings basically doubled up. It's going to do it again. The general death knell small-cap exposure. But i wanted the s. l. y. fading the x. l. e. k. pro largest trust way to play e commerce. Pld all right. That doesn't always up next a jon. Gruden is the ultimate radio. It's very emotional for me. It's important to me. No this franchise means a lot to me. I did not want to lead in the first place. So why did the raiders. Train them to tampa bay. And why did the raiders. Spend one hundred million dollars to bring him back. I'm michelle to foia. And i investigate in sports uncovered john group the coach worth trading for download for free. Wherever you listen to podcasts.