20 Episode results for "Tony Dwyer"

Monitor Show 16:00 09-22-2020 16:00

Bloomberg Radio New York - Recording Feed

01:42 min | 5 months ago

Monitor Show 16:00 09-22-2020 16:00

"There's a day at. Bloomberg. Dot Com on the Bloomberg business APP and Bloomberg dictate. This is Bloomberg radio. Markets, headlines, and breaking news twenty, four hours a day at Bloomberg Dot com the Bloomberg business at and and Bloomberg Quick Tape Bruce. He's a Bloomberg business. Flash. Bloomberg. World Headquarters I'm Charlie PELLETAN UPDATE FOR THE DOW THE S&P and Nasdaq there you have it sound or the closing Bell Eappen News York Stock. Exchange folks from the climate group bringing that closing bell as some P. Five hundred index climbing today by thirty four points up more. Than One percent sharp contrast to this time yesterday the Dow up one, hundred, thirty, nine up five tens Nasdaq surged one hundred eighty, four points up one point seven percent the Dow the S&P NASDAQ, all the fence enclosing close to session highs Nasdaq one hundred index advancing today by one point, nine percent Dow transports up by eight tenths of one percent ten year yield their point, six percent gold down five tenths of one percent nineteen o two. And West Texas intermediate crude up seven tenths of one percent thirty, nine, sixty, four of west Texas intermediate crude stocks rose dipped buyers emerged after the market selloff tempering concern over remarks from Federal Reserve officials that pointed to a slow economic recovery. Tony Dwyer is equity strategist at Canaccord genuity on this morning on Bloomberg surveillance. He told US investors are dealing with plenty of unknowns out of Washington. We don't know what the implications Supreme Court Nominees Day. We don't know if they're going to have the Senate if the Democrats are gonNA sweep and have both the White House and the Senate I just don't think it's an investable event a what you do.

Bloomberg Bloomberg Dot Dow Senate Bell Eappen News York Stock Tony Dwyer West Texas Supreme Court US Federal Reserve Washington Canaccord genuity west Texas White House one percent seven percent nine percent One percent
Monitor Show 11:00 01-13-2021 11:00

Bloomberg Radio New York - Recording Feed

01:42 min | Last month

Monitor Show 11:00 01-13-2021 11:00

"Four hours a day at bloomberg dot com on the bloomberg business app and bloomberg quick tape. This is bloomberg radio bloomberg markets we by glenn and paul paul's we'll technology us out of this crisis. We don't know how many companies can accept people back on their roster. Bed seems to really flexed. Its muscles in virus breaking market news and insight from bloomberg experts to bring out that by the different paletti that takes trying but we're looking at a more damaging great does reshape the yield curve matter. We're looking at twenty twenty one early. Twenty twenty two were really feel for the forty four degrees bloomberg markets with vonnie quinn polls on bloomberg radio continuing to keep an eye on the markets. We're going to be speaking withdrew singer. Ipo reporter in just a few minutes and to the world bill roads join on everything. That's happening in washington. Dc and increasing. Kohl's reveal to invest outside of the united states as emerging markets. Begin to look attractive. Also the economy with kristina hooper of invesco. I a bloomberg business flash with john tucker injury indexes have been fluctuating between gains and losses of five hundred. Yep seven of the eleven industry groups that are high right now. A bit of a cyber relief. On the part of investors aptitude federal reserve officials pushed back on the possibility of tapering bond purchases. Anytime soon as seems to have put a cap on bond yields the idea of an equity bubble won't go away. But tony dwyer canaccord genuity says not to worry. There's this great fear in the marketplace that were similar to where we were in two thousand evaluations or high equity offerings.

bloomberg bloomberg radio bloomberg paul paul paletti vonnie quinn bloomberg radio kristina hooper glenn Kohl john tucker invesco washington united states tony dwyer canaccord genuity federal reserve
Monitor Show 16:00 02-17-2021 16:00

Bloomberg Radio New York - Recording Feed

01:42 min | 2 weeks ago

Monitor Show 16:00 02-17-2021 16:00

"Average weight loss. Fifteen point four pounds. And i guarantee within i fourteen days with two months of our delivery charge shift every four weeks ago. See website for details. Do you want to lose eighteen pounds fast and improve your health. Now you can lose up to eighteen pounds in your first. Two months with nutrisystem get delicious. Breakfasts lunches dinners even snacks and shakes delivered safely to your door all delivered for free. It's easy to follow and you'll see results in your first week. Just text body to thirty to thirty two thirty two. You'll get your favorite foods made healthier and perfectly balanced. What your body fat burning mode. Text body to thirty to thirty two thirty two right now and get fifty percent off of meals and shakes. That's right fifty percent off a month of meals and fifty percents off a month shakes with probiotics to help support your immune system just text body to thirty two thirty two thirty two right now. There's even a money back guarantee. Millions of people have lost weight with nutrisystem. And you can't to lose up to eighteen pounds in your first two months just text body to thirty to thirty two thirty two. That's b o. D y two thirty two thirty two thirty two terms and conditions posted. Us texting recruited me to take market. Mr smith and data rates may apply. Stop to opt out seven down. Percent stocks pared losses treasury yields retreated from a one year high as investors weighed the outlook for economic growth and inflation benchmark. Ten year yield briefly climbing as high as one point three three percent before pairing. Its increase tenure. right now. One point two eight percent as for the market backdrop. Tony dwyer is equity. Strategist at canaccord. Genuity there's three levels the liquidity there's monetary stimulus there's fiscal stimulus and then there's interest expense. How many people and companies have refined their debt and saved a ton of money on that and put that back to work. So i don't think you want to try and quote unquote bet on the downside.

nutrisystem Mr smith Tony dwyer canaccord Genuity Us
The Most Important Chart for the Markets & How Joe Rogan Sent One Stock to New Records

CNBC's Fast Money

46:54 min | 3 months ago

The Most Important Chart for the Markets & How Joe Rogan Sent One Stock to New Records

"Invesco q. q. Q. believes new innovations create new opportunities. Here's to greater possibilities together. Learn more at invesco dot com slash q. q. q. invesco distributors inc. Milissa leeann. This is fast money tonight. Trainer lineup guide on tim seymour. Karen feinerman and dan nathan tonight on breakout out your winter coats because the market is entering the chill zone. That's the message tonight from canaccord. Tony dwyer how he is positioned for december dip plus seized ron investors turning up the volume on spotify today. We'll tell you what this stock to new all-time highs in later if you ungrounded will they come. Boeing's max plane taking to the sky so they had a high stakes show of confidence but our customers really convinced it is to fly. We start off tonight with the most important charter in the market. Because of course we would according to one of our traders check out the yield curve spread between ten and two year treasuries at its highest level since february twenty eighteen. So our rates off to the racist. Could this rate shock crush this record rally karen. You flag this yeah. I don't know it will crush this record rally. We don't want rates to skyrocket to quickly. I mean this is a big move but still you know. The absolute is seventy eight basis points but it is sort of telling us that the expectation is that the economy. Oh heat up and we've seen that. The resources traded that tim talks about. We've seen in energy. We're seeing it in the banks Even though they don't really aren't giant to ten spread they do trade that way. So it's indicative of the expectation of a heating economy. Maybe also more stimulus. So that's sort of how position but i also have a big inflation bet on because i do think there is a chance that inflation gets away from the fed and i don't know what they would do in the shorter to medium term the timeframe though tim i mean it's got to be a goldilocks right. Just enough inflation. Not too much inflation. It's gotta be just right. Yeah i mean it definitely not too hot not too cold and you have a case where normalized rates coming out of this and whatever that means also but where we were coming into kobe remember. We're somewhere between one. Forty one seventy five and the ten year so pointed out what the trades that have been beneficiaries or have had the extra boost that comes from this and the resources trade. I mean look coppers three fifty. We haven't been three fifty since march of two thousand and thirteen and some of the trades that look like it's back to the future in the resource look at steel companies. And i'm not just talking about us. Steel look at mattel which arguably the biggest deal company in the world or posco. These you know mt. pk ex. Those are names. you can track over here freeport. We talk about all the time. So i think you have a case where the assessment of all of this to me is more about normalizing. It's not that we're in great shape. And in fact i think we're in a tough place for markets and even some of these trades when we've normalized but we aren't near normalization at this point then later on fiscal even if that's disappointing number Infrastructure to me is is going to continue to rally in these trades member again. you don't buy commodities when you're when they're cheap you buy them when they're running and when they're expensive and i think there's a lot left to do here. Well we say we. We were taking the perspective of what's going on in the us economy that the right and bass the door. And i'm sure i would have pointed this out You know there is a whole full recovery post cove going on in asia and that is really helping to heat up this resource trade as well with the prospect that stimulus here in the us could eventually restart by and look first of all. Nobody eats porridge ever. Do you even know what porridges and currency or something like that. I like our cream of wheat. Okay anyway nobody's poor. It's number one and the goldie but don't please the the golden. Goldilocks that makes me almost as crazy as happy turkey day just saying with that said it's true and i think karen's exactly right you know if we're long as rates go higher just sort of gradually. I think things are fine. I just don't think that's going to happen. And you know she said. I don't think the fed has knows what to do. They don't know what to do if that happens. So be careful what you wish for. Because you're gonna get and by the way there's inflation everywhere that the fed doesn't count. But what does it mean for the trade and again. Karen pointed out the resource trade. Tim talked about. We've been talking about freeport-macmoran. Us steel a number of different names. And they've been off to the races and there's still room in terms of the banks. Did the math game. And i actually took the math in college one day. And we pointed out when citibank was trading forty one dollars it was fifty seven percent of tangible book and we said that it makes no sense. These were actually worse levels than to financial crisis and just in terms of where it should go. Eighty five percent is reasonable. Well guess what. It's about eighty percent now. Sixty one dollars kasit eighty-one eighty five percent. And that's why. I think we're going into banks then. We can have another conversation dan. What's your take on spread Think these guys really surrounded the trade mel. I'll just say this is that. Obviously we've had this pretty sharp move off the bottom and the ten year you know. I like to draw a line. I took an art class for one day in college. Guy actually went to math class where one day we just learned. Draw a line on the ten year. Go back twenty years go back to seven percent and then we topped out at five percent prior to the financial crisis that we've topped out at three percent about two years ago and then right before the pandemic at two percent. This is before the fed had to take emergency. Actions bringing rates to zero. So we're having this move off the bottom and the ten year. And i just draw a line and i say to myself ok. Go to one and a half. Have that as tim might say. But every time we've seen a precipitous rise in rates we've seen a knee jerk reaction in stocks over the last few years go back to q. Four twenty eighteen. Go back to q one two thousand and twenty so to me. I mean listen. I just think that two guy said careful what you wish for. I don't think after we've tacked on trillions of dollars to our deficit that anybody and the way corporates have been barring that anyone wants to see rates go too far too fast especially the fed. So what if the fence steps in. Let's bring steve mun for more on that aspect of the story and steve. Obviously the feds already buying boatloads of bonds different kinds of bonds. It could easily change with buys and buy more in the long end of the curve. Melissa villase to the conversation. I just wondering if you guys freak out at ninety three on the ten year what are you gonna do at one tab. I'm gonna take off just like run amok in the street. I mean what's going to happen to you. People look. I think the fed watches this. I think there's i don't know maybe a little bit of concern but it's one of the areas where unlike a lot of parts of the economy that needs to be fixed with fiscal policy. Which is what. Powell has been pounding the table about. They have quite a few tools that they can do. As you suggest. Melissa they can go out and buy more bonds totally or what they can do is change the tenor of their of their portfolio. They can sell the short and and by the long and bring that curve down. I don't believe there are any particular point where there's concern and i've said this on this show this morning. I wouldn freak about inflation until i see the economy back to work. And that's because. I think people forget that what's happening in the economy. Right now is a supply side and demand side issue their factories. It still aren't working. There's global trade. That's still happening. Because of the virus. So i i don't know if the fed would be quite ready to declare that we have some terrible mismatch where the money supply is too high relative to supply and demand. I don't think they'd get there just yet. I think they look at these things that you guys are looking at. I don't think you're wrong to look at them like copper but so you know what. Let's wait till things settled down a little bit of supply and demand more in line but the fed can act in this regard. The fed has always been very cautious. Steve when it comes to Taking measures during this pandemic and a stepped into parts of the market. That didn't it. Didn't look like it needed to step into I guess i'm thinking of corporate bond. Buying and i guess it was the jawboning that really helped open up those markets and get them under control But even some job owning to this effect could help with the with this yield curve. Which could then help with borrowing costs and and help a lot of those companies who are having difficulties servicing their debt during this time and not could have some positive effects. I think that's an issue but you know for that. I would also just put up the five year chart because the five year is one. That is much more. Closely tied to the cost of corporate credit and by the way spreads on high yield spreads on. Investigators are very now right. now. I don't think there's an issue of the cost of corporate borrowing right now and yeah. The fed doesn't want to be in those places but it shown that if it feels it needs to be because of a lack of market functioning. The fed will indeed step in and do so without much reservation And it went as you said. We're no fed had gone before At the beginning of this crisis. I would also say that the fed's gonna wanna look at the reason why rates are rising rates are rising because prospects for the economy or better. I think it will abide that steve. Thanks for being on we ask you. As as the fed goes out in duration. It's obviously going to get more expensive for them. Do they care at all about that or just deficits don't matter at all for the next. I don't know how long when you say more expensive for the fed to to buy more i. The fed doesn't think of itself as a profit and loss making organization. That doesn't have that issue the way other some other central banks do so. That's not going to be an issue. I think The fed's gonna do and i think it's has unlimited ability to do what it thinks it needs to do for the economy i think The fed could go for example to negative interest rates. It doesn't wanna do that for a whole lot of reasons and almost certainly won't but it could do that and it could. It could by the long end as much as it wants It does have concerned being perceived to be financing the deficit. But where and how you make that distinction be what the fed is doing now. Purchasing one hundred and twenty billion dollars a month of treasuries and mortgages For market functioning. And doing so to finance deficit You can say it's not for that reason but well what effect has yet almost certainly does. Hey steve it's tim. The fed is arguably the the estimated proffered out there and they're not going to change their tax with the minute they changed. The communication is is is part of the story here and so. That's more what i worry about. I we we know the fed's going air on being overly lax but any change in some sense about reeling in even extraordinary Don't you think that's going to have a massive impact on rates and perversely on the stock market too. So i am completely with. Tim and i'm i'm with you and seven four timing which is an inside grateful dead joke which you yes. You are right. Back at you timmy. So listen here's the deal. And i think this is a really important point that you make think about the two major thrust of fed policy the interest rate policy and the quantitative easing or the asset purchase policy. The fed has fine tuned to fare the well the interest rate policy. We now know the fed is going to remain low for many years to come. I'm gonna keep interest rates at or near zero. Why until inflation actually rights above two percent market has great visibility transparency on that now. Everybody on the panel. Raise your hand. If you understand why. The fed will won't and six tracked or decline or decrease its holdings of of assets a treasuries and mortgages. There is no enunciated reason. That's why the fed. Keep saying we need to do better. Communications the market has no visibility. And i think that's what leads to karen's a concern here. Why the panel itself right now is talking about this because the fed has yet to do as good a communications job on asset purchases as it's done on interest rates a drone pals listening steve. Thank you steve. Waisman guy dummy. What's the market reaction. If the fed decides by the longer end of the curve. What do you think the market reaction is. I am certain they will. That will be champion and that will be bullish. Just like any other fed action. You know the only time. The market is goes negative is negative is when the fed decides not to act or to take away from from their their their their bowl of goodies. And then listen. You know it's interesting. Steve said something. He said the feds there when the market acts. Or and i'm paraphrasing now but you know when the market doesn't behave properly market functions. Don't act well you know what's interesting about that and we just have a disagreement here when my kids were younger you gotta let them ride their bicycle. Guess what they're gonna fall off but they gotta learn how to do it if i ride the bicycle for them never going to learn how to do it. It's the same with the market. The fed has to back away at some point. Just let things but the chips fall where there may but you know what unfortunately they got themselves in a position where they can't and that was proven in october two thousand eighteen th through december of that year when the market went down one thousand nine point nine percent. When jerome powell at the time said we're going to normalize rates and we're to reduce our balance sheet sort of a systematic fashion. So listen i mean. I think sometimes we make this harder than it should be. I know i'm guilty of it but the fed is too much of this equation and now they're getting themselves in deeper to place where they shouldn't be our next guest says the market is entering the chill zone but he is ready to by december. Let's bring in tony. Dwyer chief market strategist at canaccord. Genuity tony great to have you with us. ongoing i ask you a question before we get to the december. Chill part of the conversation about what happens. At what level are you concerned about that. Ten year yield from a market standpoint. I don't at one percent at one point. I have no idea already. We're talking about it. Which you know to the panels. Point what i do want to say though is i think that if if you do get a nuance where the fed comes in and starts to aggressively by the treasury's i noticed that would be such a bullish move in that. It would kind of hit the cyclical trade which is what has been driving things for less money. It's really it's really been an extraordinary month. Just listening to everybody. The backdrop is kind of how been prescribed you have an extraordinary extraordinary level of excess liquidity. And at the same time you have this synchronized global recovery were remember. Two thousand eleven mile were the be raised rates into the teeth of crisis. You're not gonna get time. You have a true synchronized monetary and fiscal stimulus globally. That's at the same time as this. Is this beginning of an economic recovery. So it'd be negative for the market is what you're saying opposite of what guy. I don't think it'd be great for the secret. I think what the reason at the market is set up for. Chill me and by chill. I'm not looking for a big drop. I just don't think twenty percent on the russell two thousand and month and that's been my my framework is that's my favorite but up twenty percent history shows generally whatever you get after that which could actually mean upside for december at some point. You're going to buy it. And that was the root. The purpose of the note was you've had such an extraordinary run. Ira much rather much rather by weakness and to give you an idea of how it's happening. Despite the headlines now the percentage of ssd five hundred components trading above the ten day moving average when we put out our initial thought that you were going to go into this kind of quiet period. You had on november eleventh. Ninety percent of the snp was above the ten day. Moving average today was sixty six percent so even though you've had the more the indices kind of grind to new highs in really riley the average stock has been pulling back a little bit. Tony tony george. Seven hundred of their backs all guy. I'm sorry i apologize tim tony. I'm sorry i was going to say we're thirty. Seven hundred and the s. and p. five hundred. What's a logical resting place. Live school support. Level dance talked about and i've mentioned at thirty. Four hundred seems logical. Is that too far at this point. I inaugurated mc trading at the end of the year with that. So what happens in a pause or a correction or consolidation. Is it comes out of nowhere. It's not kobetski snap at. It's not the things that you can anticipate when you have such bullishness member a month ago you were down. Eight percent. Less than ten percent of the snp were brother. Ten day moving average. You have the election right in front of you. You hadn't had the vaccine. Knew she had so you had the second wave at lunch in the face and nobody was bullish. That was the time to buy into the now on the show and the time not chase now so back. I don't know if there's a horrible level than at looked to be a buyer it's really a framework in the framework me. Something to talk a lot on the show box. When the percents stocks a moving average drops into single-digit meaning more than ninety percent are below the ten day moving average in a bull market. That's enough but to me again. I cannot have set for four months. You can not this level of access liquidity in at the same time having this global recovery. That's why these sickled is ben rallying. They're already discounting heiner yield and recovery But just to clarify tony. Because i'm not sure if you you put the number associated with the chill i mean. It sounds really more like a breeze. You know three or five percent pullback. We've already had so the market. Mel's acting very much like it did. In the fall of two thousand nine. After the fifty percent run into august of that year you have three corrections that ranged between three and seven percent. The two already had. Which were this september sloan and then the worst that we had at the end of october for the election. They were a little bit bigger between five and ten percent so the third one could just be a minor one that sets the stage for the next leg higher. So i certainly don't wanna come across while the market's gonna get blasted here. You just have accessed enthusiasm. You have extreme overbought condition and everybody's kind of jumped on the bandwagon of this global recovery trade. And that's usually when it's time to just pause and wait for you better opportunity. Tony thank you. Tony dwyer canaccord genuity by the way you can read more about analysts your end twenty twenty one calls on our website head on over to see dot com slash pro to sign up dan ethan. Three to five percent pullback to remedy an extremely overbought overenthusiastic situation in the market seems to be nothing. I mean that would seem like a major victory. It seems fair and it's actually. I think i mentioned this the other night on the show. I would go a little deeper than that. I mean you have room down. Guy was talking about thirty four hundred maybe A little below that and you have the setup which is a really good multi-month base into the new year. I don't really think you want to get too far ahead of yourself with this extreme of positive sentiment right now in december. I think that's to pull forward some Performance at least early next year. And i'll just take you back to four years. At this time the world was convinced or at least the investment community was convinced that us equities in risk assets related to the us. We're a by everything. Went up for a few months. Equities are the ones that really were the stalwart and they kept on going. I kind of feel like when you think about where we are. And what we have to contend with and what we don't know about the vaccine and when our population one of the global population is going to be inoculated. I just think that there should be a little bit more fear in the market right here but you might have this seasonal trade. I just don't think you want to see equities close at the tippy tip. Top after a year that we've had in two thousand and twenty. It might set up for a very nasty q one. Twenty twenty one. We have earnings alert for you on crowd. Strike check out the shares. They are soaring after earnings arcade. Rooney joins us with the details. Case aimlessly shares up more than twelve percent after a strong third quarter first crowds the clouds cybersecurity company beating on the top and bottom line and issuing better-than-expected guidance for the upcoming quarter crowd strike. Hit a record in annual recurring revenue. That's a key metric for these subscription software businesses. That came in just shy of a billion dollars as andy. Nowinski of da davidson put it. There is nothing more important than a our crowd strike as he says absolutely crushed that estimate for the quarter which could be indicative of accelerating share gains the conference call also just getting underway here. Ceo and founder of crowds. George kurtz saying the quarter was driven by demand strength in multiple areas of that business. He highlighted eighty seven percent subscription revenue growth and record new customers. The company provides cloud based security for roughly half of the companies in the fortune. Five hundred brenton jeffries pointing to security is a growing priority for those companies in a work from anywhere environment. Melissa back to you all right. Kate thank you kate rooney and just to right on that point piper headed survey out and they actually found that among the survey participants who were a buyers for companies. They said that this was a category that they would increase. Spend on so crowd strike with theoretically be that beneficiary for work. From home. Tim seymour up. Eighty one percent year on year in a are that is staggering. It is but Part of the reason the stocks done this is one of the things k referred to in terms of the strength of their growth within the fortune. Five hundred and that the customer base you know people wanted to see this with a lot of the software based companies especially those even even pal here but but when you get back to crowds drag. This is a company who is truly making themselves essential within the fortune. Five hundred. and that's where. I think there's still a lot of growth. I hate the valuation. I don't chase it here. Those were fantastic numbers. But that's that's the story here and certainly the story around security. That's going to continue to stay hot. Pipers right coming up at the nightmare before christmas. Ups putting the brakes on t customers ahead of the holiday. What it means for the stock and later the rideshare rally uber hitting a new all-time high. We'll tell you what drove investors into these names. When fast money return support for this podcast comes from. Wg you do you wanna 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 or on. Wg you 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 degrees 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 near companies and employees future. Learn more at wg you dot edu slash partnerships. That's wg you dot edu slash partnerships. Welcome back to. Ups going all grinchey just ahead of the holidays. The shipping giant is reportedly limiting pick ups and deliveries from some key names including nike gap and l.l. Bean this move coming as online holiday sales surge during this pandemic dan. We should keep in. Mind that these two ups and fedex that is they actually raise prices already. So what does this. What what do you think this all means. Well i think it's good for them right now. I think about nine months ago there was a very different sort of sentiment at least from the investor. Class looking at these two Stocks but what it does show right now is that they have tremendous pricing power and they probably have the ability to structure some longer term deals with some of their customers that maybe they didn't feel like they have the ability to do that last year especially when we know that amazon was investing heavily into logistic so again we've talked about winners of the pandemic. These guys have obviously done very well as bricks and mortar have done very poorly and they've just accelerated a lot of behaviors so i would consider it This to be a trend that kind of stick around in these guys have that pricing power. Going forward yeah. i mean. This is all about management of flow and also management of their biggest and best customers. We just learned that walmart. is basically saying free shipping on everything for its walmart plus members can i would imagine that keeping walmart happy and in servicing that flow packages as much more important than maybe servicing some smaller customers. I think I mean the second. Whatever dan said i agree with the backdrop of being very positive for. I mean you have customers just demanding your product and you can raise prices. And they still demanding your product. And you're telling them going to have to ration because we can't fulfill all the orders. So i like i switched from ups. Fedex very similar stories. They're going to trade together. Ups has Twenty two multiple. Fedex is a little bit lower and i think fedex is also really gave environmental and they've been in a multi year turnaround. That's finally really sticking. And so. That's where i think. A little better value is but they're both good. We've got a lot more head here on fast money. Here's what's coming up next. Look up in the sky. It's a bird it's a plane. Heads the boeing. Seven thirty seven. Max will get an inside. Look into the refurbish jet as it gets back in the air for the first time in nearly two years later liftoff for lift chairs. Why the stock is surging. Even though the company cut its outlook. We've got that in a lot. More money returns everybody. Elaine welter off. And i'm hosting a new podcast called built to last by american express where we will dive deep into the stories history and continued legacy of small businesses that shape american culture are debut season will focus on lack owned small businesses. That need our support now more than ever in each episode. We feature the story of a black business trailblazer. That has inspired. Modern black owned business. first up is pinky. Cole of atlanta's food truck turned restaurant celebrity. Vegan we'll also chat with nathan the cutting edge designer behind the haniffah three digital fashion show. Plus we'll check in with each array are modern day renaissance. Will we hope that it encourages all of our listeners to support these businesses as well as the black owned businesses in your own immunities tune in for these amazing stories and others on spotify apple youtube or wherever you get your favorite podcast. Welcome back to fast money. Check out this video. You're looking at a boeing seven thirty-seven max plane with passengers on board the company conducting a high stakes light today in a show of confidence that it is safe to fly. Let's get to fill bo. We've got the details. I fell so you saw those people there at the end. Reporters abc geeks. It's what you call a media flight part of american trying to show reporters and be stored confidence with the public debt. Look this is a safe plane and the good news for american. This is a really uneventful flight. I talked with a couple of reporters on it. They said felt like any other seven thirty seven to take often and lands. They had made this flight after upgrading. Putting a new flight control software making all of the changes necessary required by the faa in the cockpit as well as with the training procedures. The pilots remember the first max flight. It happens between miami new york city that happens at the end of this month. So as you look at the max coming back in. You've got american at the end of this month. United in the first quarter and then in the second quarter we'll get southwest remember southwest has more seven three seven max's than any other airline as you look at shares of american remember. They have twenty four of these maxes and they're going to feather them into the schedule. During the first quarter and for boeing. This is good news. Remember they just got the air worthiness certification for the first one was parked as been built out in the seattle area. So now they can start to begin deliveries. It's not going to happen immediately in terms of a ton of them being delivered but they'll slowly ramp up production. So this is certainly good. News for boeing and for american. You're going to see more of this melissa. More of these confident flights leading up to december twenty knife the rest of them that are scheduled this month there with american employees. But you know there are plenty of press and eventually they're hoping that people will like okay. So the max is flying and that if fades from the memory. That's the hope for american right now. I mean certainly get for boeing. Who can get the planes off their balance sheet at this point. Fell sitting in the desert doesn't no good in terms of feathering in those places it because there needs to be a total retraining of all the pilots for these planes and so they wouldn't even be able to just start writing. I talked with one pilot today. Who said look. I'm scheduled to go in. I think december twelve. I mean that's that's what it is right now. You have got to get these pilots in for their certification. So that they're up to speed. And i think the pilot training it depends on exactly how they handled it. I think it's gonna take something like six hours seven hours. It might be less than that melissa. So it's you know it takes a little bit of time. You just can't have them the thousands of pilots into the system all at one time and that's the way they're going to be working on this plus they've got an update all of these planes. I mean they are working their way through it right now. Yep thank you fill in chicago tim. I would think it's good for bowing it's good for. It's good for boeing and certainly let's. Let's see what united in south west. Who are the more important customers here. Frankly you know to to getting some of those planes Pulled out of the desert and but the expectation on this is that this is great news. This is a story. Line that I'm glad to hear has gotten better for the company. It's obviously been a tragic tale for a couple years now. And the real issue for boeing though is not really about the max. It's really about the down. Forty percent On on passing your volume that airplanes a fact i flew yesterday. I flew on delta. It was great experience the airport the airports were were. I thought well choreographed and clean. I think demand. I think there's more confidence coming back. Obviously people need to be very very safe and careful and how they travel. But i think the passenger demand side of this is is what this trade is about at this point Boeing is going to be back to casual a positive by the end of twenty twenty one. It's not a balance sheet issue. It's a demand issue. And i think that's why the stock continues to entire as demand inches higher nuclear at that guy too. Yeah i mean. This is is the thesis tim outlined in his power-pitch while back when the stock was i think in the mid one eighties. Here we are two twenty and we thought maybe we'd get back to levels. We saw on june fifth. Which if memory serves boeing topped out around two thirty. So that's right in the crosshairs in terms of the airlines. Delta's been a name. I know that we've been steadfast on and here. We are at forty one dollars. If you're playing the home game this is actually a pretty logical level to take some money off the table. It's fifty percent retracement of the february high. And that may fifteenth low remember the airlines bottomed out may not march so forty one and a half forty two make sense. We'd take him money off the table and delta in my opinion coming up what joe rogan has to do with the surge in one stock today why options traders are betting shares will experience even more upside ahead. But i got another fast. Pitch on deck. Is this tech. Titan gearing up for some magical returns will bring you the name and the pitch when fast money returns developing story at a washington dc the house passing legislation threatening trading ban on shares of chinese companies if they do not allow us regulators to survey their audits. The president as we are learning now is expected to sign this bill. Which has bipartisan support. tim the companies would have three years to comply with this new rule. What is different though. Is that if they do get delisted. They are completely delisted. Their yanked off exchanges they don't trade otc they just. They're gone. Which makes it more difficult for investors but is this is this an overhang will just be an overhang. I think i think it's important. I think it's important legislation. I think it's good news for investors and it's you know. Get get real time for a lot of the chinese mega cap. So i think it can be a headwind having said all that i do. Think that the companies that are the top market cap in china in at least in the tech space are names that for the most part can meet this demand. There are a handful of some of the fifty billion dollar up. Companies that are running into the biggest issue to me is really what china is doing to these companies but Yes i'm concerned. I also think this is very good. News for investors dan. What's your take on this. I agree one hundred percent. I mean that's a long time coming here. And especially when you think about the market caps of some of these companies over here and some of the funds that they're held in. I think this is to protect the. Us investor nothing more. Obviously it's a little saber rattling here. But to tim's point it seems like the chinese are pretty focused on these companies from a regulatory standpoint to to so to have that sort of formalize a manner to protect our investors. That makes a whole lot of sense to me. Yeah let's bring in barbara and bernard wind crest capital. She's a ceo there. We booked her too fast. Pitch on alibaba or just going to go straight into into alibaba because we have this news now barbara. And i'm wondering if that changes your view at all of this stock. No i'm all for protecting. The investor. alibaba is audited by the hong kong. Division of wc. So we don't personally worry about this in this instance. What do you like about alibaba right now. Especially in in light of of the ant. Ipo being delayed maybe indefinitely for a year. You're plus that seems to be a big cloud absolutely. It's also a buying opportunity. Alabama is a phenomenal business to begin with the always want great business and then you wanted at a reasonable price wrote that discount is the best form of value. So i like alibaba for a few reasons to me is defined the next era of ecommerce basically. Us tech is still silent whereas look at an alibaba and it's a combination of amazon and ebay right. It's a combination of pay pal. Google phenomenal business model. I think the ant. Ipo news was overdone. And i go into that. And i also think alibaba's currently cheap because there is a news that they'll be monopolistic practices regulation that historically in china has been a buying opportunity. And we've done it in education. We've seen intense last year. I'm happy to go into that. The third reason is we had a vaccine news last month and that has caused a rotation out of tech an into value. And i think that is more of a trade than a trend. Kobe has celebrated digitization and alibaba encompasses some of these businesses. That really is a once in a generation digitalization talal went and so while the market is busy debating. Who's gonna win. Whether the car the horse i feel really good. That alibaba is not a one trick. Pony barbara karen. Thanks for coming on. I agree with every single word. You said all that together. Then what do you think is worth so we value about some of the parts basis so i have a three hundred and twenty five dollar valuation for the core business and twenty five dollars for the net cash on its balance sheet. So that gives you a three hundred fifty dollars price target which is thirty percent upside from here so i don't really care about the alibaba a anti peo. Because you're getting it for free at this point so and looking at a company that has extraordinary quality of assets and its revenue is growing thirty percent next year its earnings are growing twenty percent. And you're paying twenty six times for it all right barbara and we're going to leave it there. Thanks so much for for coming onto fast. See you soon. Barbara and Bernard of wind crest caversham. See their attempts or i think it's interesting. Some of the parts valuation not even assigning value to aunt at this point. Because there's so many questions that mean especially when it comes to capital requirements with that part of the business. That was a great pitch for power pitch by barbara and also a song of course by the beach boys and i think looking at some of the parts is often look at alibaba. I do think that you can start to layer in just more of a discount rate if you're doing more of a or an earnings based valuation and i i think you might even get a lot more upside But but as she talked about the the growth at thirty times on the top line. And possibly i think you're even higher than that frankly for twenty six times twenty eight times. I had a little bit higher. But i think this is. One of the great long-term holdings investors should have in their portfolio. I think this is. I think this is the next trillion dollar company. I think what china's doing right now. There's a reason for it. And there's a reason why it's so it's so vocal in played out publicly and i get it. But that's an opportunity for investors here so as we had mentioned this would have been a fast pitch guy and at this time of the game we would normally be voting so if this were still a fast pitch. How would you cast your vote. I have my smart board out. Can you read that. please mostly meals. And i don't know what that means. But i'm sure you'll know of course you don't baba o'riley i called okay. Let's see what we have the best we have the best prac- staff in englewood cliffs. I'm just telling you that. With the fact that they were gonna pull that song. Yeah genius back to july when that stock made an all time high to sixty alibaba and then sort of sold off. We're now at two sixty the three twenty levels where we were on halloween. So you just be recapturing that level. I think it makes a lot of sense. So if were to be a power-pitch i would have held up the board and said i'm with bob ran baba while baburin coming over and lift chairs accelerating. Is there more fuel left in this rally. We will debate that. He should happen to those traits next in our logistics business we are squarely in the middle of this massive e commerce. Boom we have the largest outsourced econ fulfillment platform in all of europe. Were very big and omni. Channel were huge in reverse logistics if a big presence in cold chain all the hottest parts of supply chain powered by this e com. Boom right in the middle of that. That was the ceo of expert logistics just moments ago speaking with jim cramer shares are higher in the after section of the company announced the spin off of its contract logistics business to a separate public company. You can watch the full interview with jim. Top of the hour only on mad money coming up shares spotify rocking out today. What is behind this. Massive move higher will break it down next. Welcome back fast money. Check out spotify tapping the tape to the tune of a brand new all time. High the audio streaming service saying the joe rogan experience is a platform top. Podcast while bad. Bunny out drake to be spotify. Most streamed musical artists which i know is disappointment to guy. Who's a huge drake fan. But dan what. What do you make of this big giant. Move higher pretty shocking. I think it's primarily technical when you think about those prior highs near three hundred. You've got through their broke out. But for any investors or any spotify users who are concerned about the content of the joe rogan experience. I think the company is pretty comfortable with the acquisition as they gained six billion dollars in market cap or so today on the news that it's going exclusive finally to them so to me. It's kind of a win win all around guy. Now you have spotify lists that you Curate if i could use that word because i do really use it loosely. Because it's just a giant list of songs that you like. I'm over seven hundred songs right now number one number two i would. It's not useless. More partial to the jimi hendrix experience. Supposed to the joe rogan experience. And i do like drake. I loved his coffee cakes. Yells and ring. So that was really drake in my opinion and i wish he would come back with method that we spotted some big things in the market today on spotify. Also let's get to my co with the action mike considerably above average volume ten times. The average daily volume in fact and calls considerably outpaced puts for most of the day the most active options where the january three fifty calls those trading for just over twelve dollars buyers of those calls are obviously making the bet that spotify consider the run higher through that three fifty strike by at least twelve dollars that they paid. That would translate to move of at least fifteen percent to the upside over the course of the next six weeks but i would also point out the stock up as much as it has been and also that sort of technical move that dan was just talking about that. It is likely in my view that some of this call buying might actually be stock replacement people who have benefited from the big rally now deciding to take their positions in the form of calls rather than stuck in karen. How podcasts have become the new thing to be in the wall street journal news. That amazon was looking at one degree. Which is of course a producer of podcasts. I just. I can't believe where this thing is trade. I mean they've denounce obviously some great deals. Michelle obama rogan. I feel like it's up again on the same news. I feel dumb. Because i love the product But just couldn't get behind the stock. Where did they do. Direct listing one. Twenty five maybe while member couple. I guess that would make it a couple of hundred points ago. Yeah thank you mike. Cofer the action for more options action. Full show friday five thirty. Pm eastern time and speaking of spotify real here for the company's chief content officer among other big power players of tomorrow cnbc evolves livestream. Ride your sister registered to join i said. Cnbc events dot com slash evolve livestream up next final trade fast money. You're looking live at rockefeller plaza new york city. We are just a few hours away from this year's tree lighting no spectators time around due to the pandemic but you can catch the tree. Lighting live on nbc tonight at eight pm eastern time get some final trades. I will light up your portfolio. Go around the horn tim seymour. Oil has been lightning brent's up Thirty five percents november one best of breed oil services slumber. J. again believe it or not. Free cash flow their name. I'm long and stay long. Cairns got a special guest idea wasn't a dog person till this guy. We like alibaba. I agree with everything baba and said i've bought it higher than here and like yours would go. Jaffe dodgers san yes. Salesforce was down eight percent today on that by of slack i liked the by some investors. Don't like the price of the stock is now down twenty four percent from its all time highs. It's filled in august earnings gap. Here i like it. Starting to average in between now and about two hundred bucks digest has been sitting on the floor behind karen shooting a piglet for the entire hour and we did not hear a peep or park. Should say the difference between i mean. That's the difference between fiterman and amongst the many of brenda league. Nobody else tended healthcare hospitals. Go higher i. Let's see that gets my five money starts right now. Jon gruden is the radio. It's very emotional for me. It's important No this franchise means a lot. I did not want to lead in the first place. So why did the raiders traded 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 grew the coach worth trading for download for free. Wherever you listen to podcasts.

fed ten year ten day five year tim Tony dwyer tim seymour alibaba steve boeing forty one dollars five percent karen invesco distributors inc. Milissa leeann Karen feinerman dan nathan canaccord two year one day
Fast Money 01/21/20

CNBC's Fast Money

45:24 min | 1 year ago

Fast Money 01/21/20

"What is decision tech by fidelity? It's technology that can help you find a stock based on what's trending or investing goal. It's real time insights and information formation delivered in your own customized view of the market. It's smarter trading technology for smarter trading decisions and it's only from fidelity pretty open an account today at fidelity dot com slash trading fidelity brokerage services. LLC MEMBER NYSE SIPC the Nasdaq market side overlooking. New York's Times Square. This is fast money. Hi everybody I'm Brian Sullivan. You're traders on the desk tonight. Are Tim Seymour. Brian and Kelly Daniel Tonight on fast another black guy for bullying and its investors shares down again jet maker delaying the return of. It's seven thirty seven Max again. Gift is this. Should this be the final Straw for investments. Toss we're following a major developing story out of Asia for a deadly virus is spreading fast. The first confirmed case is now in the United States markets in the world on edge. We learn more. We're GONNA bring you up to speed on what we know at this hour and later longtime market bowl. Tony Dwyer leave. The Penn thing now is the time to take some profits. I'll tell you what he's got him. Aluminum nervous about the future of the market. All that ahead but we begin with earnings things. Because we've got alerts on. Both IBM and Netflix. Both stocks of the move after reporting their numbers both stocks higher and as always full team covers standing by to break breakdown. Moves Got Julia. Boston digging a Netflix. Bullets Begin Deirdre Bosa and a major move higher for IBM Little Green in the screen for big blue. That's right Brian ending it streak of declining year over year revenue. Five quarters of that. But the real question here. Brian is it too soon to call a turnaround. Remember that we saw recovery in two thousand eighteen as well. That didn't last. This quarter revenue grew by just a tenth of a percent and shares are popping partly because expectations were so low and losing some of those earlier gains now up just lower than four percent. Sustained turnaround will largely depend on Danny remedies big bet on hybrid cloud intern thirty three billion dollar Red Hat acquisition. Now there are early signs that those efforts are showing some promise this quarter. IBM says revenue hit six point. Eight billion dollars and now comprises nearly thirty percent of total revenue ahead of the report though is IBM. Saw downgrades from Morgan Stanley and from ever core in the Morgan Stanley. report this this table suggesting based on Burmese agent tenure. Seo Transition could be likely. The typical retirement age for an IBM CEO is sixty for media. Sixty the three. And she's been presiding over a turnaround without much luck for eight years now. Morgan Stanley also suggesting the big blue means they more meaningful shift in the portfolio for long term revenue growth so today was a much-needed beat and shares are up. Nearly four percent in the after hours remembered that their underperforming the SNP. Over the last quarter year. And the last decade Brian Deirdre. Thank you very much. Let's go around the horn trade. IBM Goddamn yes. Okay I understand the results. The stock is up one hundred and fifty dollars stock doc. Less than a year ago it was one hundred and eighty dollars stock and three hundred thousand one hundred forty dollar stock ten years ago. Sorry I didn't mean to be so emphatic. Award throwing names and numbers. I just look at the pop guy. You say okay good news we have to look at this holistically in a longer term. I mean I agree with you and we've said for a long time on this show the IBM is getting it wrong. There in the wrong businesses their mixes bad. But guess what a lot of tears are just said makes a lot a sense operating margins for this quarter. We're fifty one point eight percent same quarter last year forty nine and change that is significant. Why because at least their product mixes getting better and this cloud that she spoke up twenty one percent year over year? That's good and if Gina does step down after this tenure. This is the quarter to do it. So I've em is on the verge of breaking out of a four year downtrend and you know valuation has always been the reason and actually might be the reason this year and you got some downgrades the head of the earnings good okay normally. It's the train but Tim. Your point is very well taken. IBM and a lot of good people there but this is not exactly been a money maker for its investors for a long time now so color me cautious just because I think this this red hat acquisition which they paid a lot of money for it that goes north of thirty four. A billion is showing that look return revenue stream. We all know what big cap mega cap tech especially Microsoft and Amazon. Google are really getting out performance on the multiple. That's what this is all about. Because if they can start to go from software sales to return revenue and now it's about twenty percent the size of Amazon's cloud business. This is at seven point. Two billion dollar number it's meaningful it's very real. We've been watching this talk for a long time looking to make that turn. I don't think you need to jump into tomorrow and say it's it's a brand new day. Yeah I just wonder if this remedies last trick. IBM would be kind of break up. These two businesses break up the faster growing we saw done at Hewlett we saw with Ebay and pay pal a few years ago to me. It seemed like an obvious sort of choice. And she seemed like the obvious person to kind of preside over that thing and then kind of find her way to the door a little bit but I just don't think the cognitive solution some of these cloud businesses. They're big enough to kind of make the sort of difference within this legacy business. That IBM has so to me. I just don't find it too exciting right here. I don't not expect investors to Palino's actually find it really exciting guys mentions are positive catalysts for the stock you know. Let's just say sucks. Got Nowhere for a long period of time. That tells me that current management probably isn't exactly the people want to have in there. So Janine were remedy is to retire. I think the stock pops on that if they even talk about breaking it up in this market environment. I think that's good. And then the third thing is they've got a four and a half percent dividend yield in stock environment with anything that with a yield. That's getting getting bit. I've now got stabilized earnings and I've got a good dividend yield and multiple catalysts health. Care about this is the sort of market that actually is kind of rewarding being like laggards rewarding unpolished James. There's so much work that needs to be done here at this stage of what he's done they're turning around the revenue they got a four and a half percent yield. I think that's enough for this. And they're going to put twelve and a half billion of free cash flow and twenty twenty. The these. These guys are certainly giving you some sense. I would argue by the way Dan that the the markets rewarding and almost anyone and I think the market is looking for relative value. Also in Mega CAPITEC were frankly. It's hard to find any value so on a relative basis to itself you can make that argument with IBM but I'm not ready to do. The analysts community rating hold on average. How many big cap tech stocks say that? Before we move on Netflix. Just without picking on IBM Guy Dummy this whole thing about if basically if you're sixty you gotta go this. Is that a stupid policies now. Aren't they hope that guy he's got another others all because you've got these companies. You're you're doing a huge deal with red hat if somebody says Oh you know Virginia Rometty your your sex or whatever her name straight. I've heard gene for Ginny and now Virginia Lie said her actual. Because I don't know where this guy hit with Janney way you're right and I senator with a genie a genie. I should've said the CEO of IBM. You are correct but with that said I think it is a perfect time for her to leave and I think if you listen than Microsoft five years ago. Everybody's saying Microsoft is dead in the water. They can't turn that that aircraft carrier around. Guess what they got into different big business mixed brother new. CEO Look what it's done over the last three or four years. You could do where you hit an age. You gotta go I mean. He seems like relics of another era to me in some respects but whatever oy sticking with. Ibm We're going to be hearing from Virginia Ginny Rometty tomorrow morning on Squawk box live from the World Economic Forum in Davos Swiss. Let's now turn to other big name on the move in the after hours. That is netflix trading higher reporting results Julia Carson in La to break down those numbers the stock stocks of Julia but the subscriber numbers. Maybe not what everybody was looking for. Well Bryan Netflix did add more subscribers than expected in the fourth quarter eight point seven six million subscribers that surpasses the seven point six million the company itself forecast but growth did continue to slow in the US just four hundred in twenty thousand us subscribers were added versus the six hundred thousand that the company itself projected an ethics guidance for the first quarter it was edition of seven million subscribers worldwide that missed analysts projections by one and a half million subscribers. Co Reed Hastings highlighting interest in their showed the witcher despite the launch of rivals Disney plus an apple. TV saying that the WITCHER's tracking to be. Its best first season TV series with seventy six million households watching in the first four weeks. Oh coming up on the call which starts in about an hour. We're sure to hear hastings talk more about competition. He wrote that they're viewing growth. Is Consistent with recent quarters. Despite a number of new rivals also announced is changing the way in measures viewing. It's now no longer counting view as watching seventy percent of an episode or film now reporting unaccounted that. Choose to watch which means watching for at least two minutes so we'll have to see if they have any more commentary about this already thirty drawings a buzz online and also if they see if they say how many people have watched. Martin Scorsese's the Irishman is that it was popular but no numbers from from net flicks yet Bryan hold on Julius. You say if somebody theoretically watches and I'm doing the air quote thing for two minutes. They're going to consider that a view Yup. There's a here I'm looking at it right here. They say now they're reporting on households Prinz accounts that choose to watch given title. The footnote note says choose to watch and did watch for at least two minutes. That's long enough to indicate that the choice was intentional. And that is the precise definition. They say it's similar to help us are measured on Youtube the BBC player. Or how I count in the New York Times play right I mean if you just sit there and do nothing it just keeps going right. I mean well. This is only if an intentional viewings if you clicked to open something If you watch for two minutes there it it seems like they would not count a lot of play away but as you can imagine is already sparking criticism on twitter. Nothing sparks criticism on twitter. It's a land of happiness and complements. That's Julia Burston. Thank you very much okay. The reason I dwell on that a little bit vk was that we go on these numbers. Say Twenty six billion. People Watch the Irishman whatever extensively. If you've we've got to watch for two minutes something all their numbers are going to go up and it but we need I think investors to realize this and be a little careful. I would argue that if you watch the first two minutes the Irishman when you didn't need to watch the other three is coming out with five point. A lot of people don't like to see a company company changed their metrics when they're going through some competition or some struggles type thing. What concerns me more about? Here is the slowing growth in in Subscribers numbers coming up they burn through three point three billion dollars worth of cash. They say that the peak but the long-term debt is increasing now. I've got a company that has multiple competitors that are actually actually online actually coming in and I think they are going to take some market share from net flicks so for me. It's a no touch at best. Yeah I would just say there's a lot of problems in the data. I mean we got to hear what they have to say on the call but when you think about it they're gonNA anniversary this price increase that they had last year when you think of these competitive offerings that you have by some of the riches this companies on the planet when you think of Apple Dizzy that sort of thing who are underpricing. They're they're giving the first year away for free and they're taking back all of their content. I think that's a huge issue. You and then we have all these other launches in the point about the peak cash slow-burn to me you telling me that they're gonNA lose all their best content and they have all this new competition that subsidizing subsidizing these offerings and they are not going to burn more Catholics. They're tacking on a ton of debt Just don't see it. Well I I think you're right to talk about the lack of pricing power because we all know when they got up to fifteen eighteen ninety nine nobody blinked. It seemed like a big day now. The other side of that is we've now had the first quarter Disney pluses out there. Apple pluses made their announcement and here. They are showing that they actually beat on total global subs yeah and they underperformed in. US PEOPLE ARE GONNA say. That's why so I'm netflixing. I'm bullish on Netflix. I'm going to tell you that. Look and move away from linear. TV and Reed Hastings as thing seems to be focused more about this than talking about competition. There's enough and I think I heard rising tide and all this other stuff takes so look a decent quarter. I I think Dan the number you work worry about in terms of pricing is really the cost of content. And they're gonNA spend maybe eight billion dollars in twenty twenty on content as they look across at the competition. So it's less about. How much can they actually charge? It's GONNA spend. It's a great time to be alive content producer. Another time like this. I think in global history. Let's bring in somebody who doesn't would have to speculate. Because he knows from which he speaks his longtime meet executive Tom Rogers them. I gave all your titles. The show be over a Netflix view. By the way you would countdown only you high fast money. We like to hear you keep coming back. Is this that flex now. I don't think so it all and I am quite optimistic about the future net flicks you got to remember. They're playing a different game than everybody else next year. They're likely to introduce a hundred and thirty international series. We're talking about a company that is growing globally at close to thirty million subs just to put that in perspective. HBO over the last five years. With game of thrones I think probably once in a decade kind of hot property to have on pay. Hey television grew four million subs over the course of that tenure net flicks is in a very different league than everybody else the issue. I don't think it's so so much. Are they slowing because competition. Look people thought they were gonNA slow because it was gonna be bidding in disconnect. Find your favorite series binging disconnect. That didn't hurt him. A new competition going to slow them a bit. Maybe but the real issue is they pit. Sixty million two thirds of all broadband subs. They're gonNA continue to grow. Just based on the demographic trend we're probably going to see below eighty million cable and satellite households next year for the first time since two thousand thousand twenty years ago that's a trend of continued disconnect and they're going to benefit from that slower growth and they've had put growth the fact that oversees overseas. Tom Because I think we all do I think we do. Tend to get myopic and we look at the. US We talk about HBO MACs and Apple TV. Plus that's not an Indian talking about growth growth in the US. They will grow with the demographic trend that young people are not taking cable and satellite anymore. Younger households are going to continue to take Netflix. And streaming streaming services and as that demo grows older and older they will continue to benefit from that overall trend. It will not be as fast as overseas but it will continue to growl now. The idea that they're spending overwhelmingly on programming compared to everybody else is absolutely true. But if you do the math and you believe that they're going to be there. Are One hundred. Sixty five million global subs now. Probably one hundred and seventy-five million by the end of next quarter something close to that. Although they guided a little wider I think you will. It's not hard to see. Three hundred million subs in their future at fifteen dollar are PU globally. which with the price increases? They've taken you can see that happening even spending twenty billion a year twelve billion on originals. You can see this thing thrown off real cash when they hit those kinds of numbers. and that's what everybody's now looking for. Is this a cash hole that they never dig out of or is this thing gonNA produce meaningful cash cash flow and I think if you believe they can eat three hundred million subs at fifteen billion. I'm sorry fifteen dollars a month high prices that is evident Easily attainable Tom. I saw your parents on the squawk box last week. And you were brilliant. A Wolf in peacock clothing that line was genius but our people underestimating estimating what comcast has been doing over. The last six months market is rewarding. But as you think there's more reward to come. I think the issue with all the other companies other than Netflix and Amazon separate category. Whether you're talking about comcast when you're talking about. Hbo Max whether you're talking about CBS all actors. We're are you talking about Disney no matter what they're streaming play is and they're all after transitioning to streaming entertainment they gotta manage the downside of the business and the downside died of disconnects. The downside of turning cable and satellite is a really big issue. And if you're not if you're Netflix and you don't have to worry about that. You don't have to worry about collapsing. Theatrical windows and releasing movies first run where all the others do among many other issues they have to manage on the downside. They have a much much more difficult quickly. We got to let you go but I got asked about news and sports because I was talking to some friends direct. TV The only one that has the NFL Sunday ticket. You could pay and it's people say why is that on direct TV. I think it was a fifteen year contract. I believe Tom it's coming up. Should Net flicks go after the NFL. I I don't think Netflix needs to. I think there will be competition for those packages from the crowd. Whether it's Amazon whether it's Google whether it's others but I think Netflix as pure entertainment play is pretty well position. I think the issue is that de streaming wars on entertainment retainment that everybody's focused on is missing a big issue which is when cable and satellite disconnect happens and the bundle continues to decline though subscriber fees. That are supporting news. Programming like this and Sports programming like this that that that has a dwindling wendling revenue base and the issue for all the traditional guys among the other things they have to manage on the entertainment transition is how they manage all that live. Television programming programming which will be the guts will news and sports. We'll be the guts of. How does that get support over time? And that's the big question that people are nowhere near as focused on as they should be entertainment wars. Play out. It is a big question. It's a big question for a lot of people sitting around this desk as well Tom. Rogers always great to have your views. Thank you for having no thank you. Welcome back back Mr Fast Buddy. Tom Rogers right guy. What do you think I think he's right about necklace? I think he's a stud. I say that all the time and he is I mean in this business that what do they call that thing. Mount Mount Rushmore with the Gaza War. How about the Godfather? I mean that could be that as well. I mean I agree. I think Netflix this quarter if they don't if the market it doesn't sell Netflix. Off on this quarter where they have the opportunity. It's not going to sell off. I think it's sort of trade back to those April jobs. Challenge stock doesn't rally than its toast sent from. Its highs it made in two thousand eighteen. It's just it's such a laggard and I actually. There's a lot of things that I I love him to death. Fifteen dollar are Pu for this. This company globally is a pipedream. It's never happening. It's not what is going to be in India and all these other places they're never going to be in China so to me. I just think that that three hundred billion and subscribers a long ways off not gonna get fifteen dollars outside the US. I think we have not yet talked about the stock until you did there. Dan Let the bottom line is it's underperformed the triple accused cop based thirty percent review stocks. Done nothing for two years. That tells you what you need to know about a company that needs to be profitable sooner rather than later despite fight the fundamentals and the structural stuff going on in the industry all right. Good discussion there on Netflix. Basically by the way a two year stock. That's been flat all right. Bully dragging down the Dow the company facing another another major delay for that seven thirty-seven Maxwell debate. What is next for Boeing at its investors and later longtime Margaret Bull? Tony Dwyer says time to take profits. Now why he has turned a little bit cautious. He says we are headed from here. And as always you can watch or what's the new US live on the Golan the CNBC APP the live from Times Square and back after this. What is decision tech by fidelity it's technology Collagen? That can help you find a stock based on what's trending or an investing goal. It's real time insights and information delivered in your own customized view of the market it. It's smarter trading technology for smarter trading decisions and it's only from fidelity open an account today at fidelity dot com uh-huh slash trading fidelity brokerage services. LLC MEMBER NYSE SIPC. I welcome back another delay for Boeing shares tumbling more than three percent the company saying it does not see federal regulators signing off on seven thirty seven. Max Return to service service until June maybe July or later stock now at its lowest level in a year or even more delays on the way. What might that mean Tim Seymour for the stock? Well the personal this is Boeing doing a complete one eighty in terms of how they're approaching the market. So they're doing this with a Lotta continua conservatism. which is something that I think the? FAA's wanted them to do. And if if if you if you listen to the new management team they're certainly on a charm offensive in that direction when you look at the just. The estimates on the company terms of free cash flow in terms of leverage every push out now now is something that analysts can put right into the stock price If you look at the charts raking three twenty three twenty five and I know you can you can kinda bend the numbers around with the stock like this. But today's break. Nick was a decided break. I think on the chart I agree with them. We've said it had hold that three twenty level it held it bounced look good. This news is disastrous. astras that Choon Ninety three low I think on Christmas Eve of two thousand one thousand nine hundred is absolutely in the crosshairs. I mean now. The market's going to continue to shoot. Shoot first ask questions later and Boeing his absolutely in that in that space so I think you see to ninety before you see it back up to three fifty here Brian as anybody. Nobody does dove into the you know right now. We're just talking about getting this plane. Backup to service. I've talked about slot and maybe I'm wrong but nobody seems disgust. What happens when it returns to service with the public? Look and the airlines. It's going to be hit to the airlines one. They're going to be missing these planes for the summer. So do we look at a ual. An American and South West and also what happens the airlines whenever it returns the service if a good percentage of the passengers refuse to get on it I think most passengers are going to everybody. I don't believe I think most passes are going to say. I don't want to be on with hogwash. Most people just get out. I don't know I I've asked a lot of people I don't know anybody who's GonNa get on it. Lots of people have said. Hey maybe you rename the plane. I don't think that's GonNa work and the other thing. I don't think we've priced. is now that you have this. reputational damage to Boeing. Everybody every analyst is going to start looking at every other product reports that the air force isn't happy with the product. It goes down the line line so I think three hundred holds. I think you wait until Warren Buffett starts buying this thing it comes out Sunday. Warren Buffett bought a ten percent below market. That's the day by Bali. Yeah just I mentioned this. I can't think back in my career and see a company that had almost eleven billion dollars in net income in one year basically goes to a billion you know and not the stocks down thirty percent from its highs. Just you know what six nine months ago to me it. Just the stock has been outta whack. It's been disconnected from the fundamentals. And I think that June or July seems optimistic at this point. So at some point you're gonNA see analyst are taking ratchet to the two thousand twenty estimates and who knows what happens but to me you gotta remember this Dr One hundred hundred early two thousand sixteen traded above four hundred last year to me. I think there's probably more to because I thought they were still producing the eight hundred nine hundred seven they were Philip. Correct correct being said No. This is their seven thirty-seven product. This is their product but they have a ton of inventory already and I you guys could all be right on this. But why why wouldn't they be more conservative rather than more aggressive. And that's that's what I heard today. I don't think it's up to them though I think the FAA has a huge part to play. Or sure. And I don't think I mean they are going to be Uber. Conservative the FAA. With this. I think well pashtoons lot but just what other choices do you have out there in terms of flying an airplane and I think that's something that's going to keep bombing in much better. Hannukah learned today. They are still flying the Max. They're flying by moving it around from various locations so they are open the air occasionally. I learned that today because because they got to get it from Tulsa to Victorville California or vice versa for the latest on bullying head over to our website at CNBC DOT com. Meantime here's what else is coming up on fast. Asian stocks getting rocked has a mysterious new virus spreads across China and the first case is confirmed in the US. We break down the impact on the markets. Plus some of the greatest investing minds in the world are converging in Davos this week and they have very different views of where the market is is going. So booze right. We've got that and a lot more when fast money returns welcome back. We're following a major developing story that has having impact on the markets around the World World Center for Disease Control Confirming the first case of China's corona virus in the United States. Let's get right down to make with more on what we know and we don't know at this so a Brian will. The first patient in the United States confirmed to have this novel. Coronavirus is a man in his thirties in Washington state. He arrived in snohomish county where he lives on on January fifteenth after traveling from China where this outbreak has been going on. Since last month authorities haven't yet detailed which flights he toke but said they're working on identifying anyone who you may have come into contact with him so they can be monitored for fever and respiratory symptoms. Still they say the risk to the general public is low. Now here's what we know about the virus. It's in the same family family as SARS and murders and it does appear to be able to spread between people. What's not known is how easily it spreads which will make a major difference in the scope of this outbreak so farther Arthur more than three hundred confirmed cases mainly in China and a few nearby countries and six confirmed deaths here in the US the CDC is implemented entry screening at three US airports San Francisco Lax New York Staff K. and today said it's expanding at screening to Atlanta and Chicago as well? The patient in Washington arrived before the CDC put those measures in place. Meanwhile an emergency committee of the World Health Organization will convene tomorrow to determine whether this outbreak constitutes a public health emergency of international concern. And what recommendations to make to manage it and work is already ongoing on potential vaccines and treatments. A vaccine at the age and a treatment candidate a drug company regeneration but of course Brian it is still early days overdue scary stuff at a big story make troll thank you very much right. Outbreak fears are rattling investors around the globe the Asia markets tumbling Overnight and check out some of the casino stock seems like Mgm Resorts Las Vegas Fans and Milko. They're all selling off got big properties obviously in Macau and the travel. Names like Royal Caribbean Norwegian cruise. Lines and breaking bookings rather also in the red so. There's clearly real fear surroundings outbreak. Tim What is your take on the market reaction what would that in any insensitivity. Because I don't there's obviously people that are sick around the world and this is a big global health issue but I just tell you for many markets perspective in someone that was investing in emerging markets when SARS was first diagnosed and became this This epidemic that people thought was going to be a pandemic ultimately the economic impact was zero. It was short-lived if anything and I think the reaction today is one where people are gonNA regret selling something into this kind of weakness. Now it's fair enough but Wynn resorts for example. Go back and look what the April twentieth high was. I believe it came in around one fifty. One look where we just topped out at around fifty one talking about wind reports. I believe on January thirtieth breath with these headlines might instinct. Is You have a bit of a double top here in the short term. I think it sells off. I mean people aren't going to buy it until you get the all clear. I think you've got to post earnings to reengage. In W I n your next guest says this part of the corona virus could have an impact on your money. Let's bring Tony Dwyer Canaccord. It's chief market strategist. He just took down short term forecast for the overall market. Tony obviously you know we asked you to come on. We weren't really dealing with this even just a couple couple of days ago. We'll get to your primary call in a moment. How does this corona virus in two thousand and three with SARS you saw Chinese domestic spending absolutely collapsed? It came back but it collapsed and the world is rattled. Well that happened again. It really have a short-term impact it was a market that obviously was not prepared for that kind and of that kind of disruption but in the. US I go back. And I look at it in two thousand three occurrence and it didn't have any impact at all. It had a lot of fear in the headlines but didn't really they have a market impact. So I'm kind of with Timmy Brian. I don't really think it should have a long. And that has nothing to do with why we downgraded market offensive. I know that's why I try to get. Ah Introducing you but at the same time it layers on. It's one of those things that you know. I think the most important thing we can do in the media at times where you get these headlines in these his fear based things is actually step back and look at. What's the history of these things when you get an impact and creates a short term drop but ultimately when it gets resolved? You just get right back so so unless unless you believe it's going to become World War Z.. With with Brad Pitt. You gotta Bet that that it's going to be temporary and it's probably not a great investment decision so Tony you've been bullish and spot on your turning cautious. I want to kind of quantify that is this one of your short term calls where we've gotten overbought too far too fast put. The bull market is still intact or you kind of changing your tactic. It's so the last few times I've been on I've been talking about not chasing the market. Bk I've been talking about holding your positions right if I was as you know bullish last year. So I'm fully and fully invested. I was saying. Don't add new money but stay in those offensive sectors. There's let them momentum work for you it is now becomes so extreme that especially in information technology that it warrants more aggressive take profit call for for example we have. We looked at when the SL which is the relative strength index for the information technology sector got to eighty two on the weekly close so the fourteen week. RSI got to eighty two. It's only happened four times before since Nineteen Ninety K.. Your median drop was thirteen percent. The only very low drop and Infotech vo-tech was two percent and even there that was in one thousand nine hundred five. You could've bought it better in one thousand nine hundred ninety six so the point is it's not a if if you look at the chart those aren't the peak. I don't WanNa make the peak call but it can be a nasty peak and I think that's what's kind of lineup changed your earnings estimates. You're not building I love. I Love I will not unless there's a fundamental change in the earnings outlook or the Fed. Change my target. That's just just chasing my tail so my target as you know. Dan Is thirty four forty. It's been there on one hundred and seventy two and earnings and I see no reason. James had that's the other part of my question so if you look at Q.. Four for we're tracking below two percent GDP and look what happened in Q.. Four we saw this massive expansion of the balance sheet. We saw three rate cuts in the back half of the year. That sort of thing. How do we get to these? He's highs single digit earnings growth on the SNP if we don't have more accommodation what you're seeing globally and one of the reasons that we've stayed bullish otherwise otherwise I'd just go outright negative. One of the reasons you want to stabilize is number one. The global monetary authorities every single one of them is going to continue to print money so of the economic data gets a little bit weaker. They'll come out and do more secondarily a big part of it was this inflection off of such historically weak global growth like all the market. PM My dad is going into mid two thousand eighteen. They were tragic. They were about as bad as you've ever been in history now you've inflicted positive than new. Export orders are picking up up the the percentage of market. PM is showing positive year to year. Changes are picking up. So here's the risk to my story. I heard a couple of guys and gals talking today about how the risk is if you do get this economic acceleration and the yields go up in the Fed tightens. That'll do it. I don't think that's it. I think the looking at the wrong thing at this point. I I think the risk is you've had this monetary easing and the Fed is still too tight and you just get this temporary lifting growth and expectations and then it rolls. So I'm watching the initial unemployment claims. I'm watching the market manufacturing data. I'm listening to the conference calls. One thing I wanNA point out it's going into this earnings even though you're right Dan thanks have been produced a little bit. Everybody's pretty optimistic. After the financials which is had been one of our overweight sectors you've actually seen a reduction induction after the good news in the financials. You've seen a reduction in the blended estimate bottoms up estimates. So ex financials even with the better than expected report. They've come down a little bit so we'll call you bearish dwyer because it's not bearish kind of maybe the peak for now might might be Tony Dwyer we appreciate you coming on. Thanks very much during you tomorrow morning. You do not WanNa Miss. President trump will speak with Joe Kernan at the World Economic Forum in Davos Switzerland again tomorrow morning a five. Am Eastern time such DVR's as well Joe with President Trump. All right speaking of the president coming up but a big day in Washington the impeachment retrial getting underway. We're going to take you live PAPPA hill where we stand right now on a long and so far contentious day one and speaking of earnings began burnings stock reports results before the bell by options. Traders are betting on it big time when it reports more and options action. There's your mystery mystery chart fast money for this just in case you missed it a few minutes ago before with a break on a major interview tomorrow. President trump will sit down with Joe Kernan for the World Economic Forum Internet Five Am eastern time. It's in Davos Switzerland. By the way some reason you're the west coast set your DVR as well cheek check it out on. CBC Dot Com as well. But Joe sit down with President trump. Well that interview comes. As the impeachment trial gets underway underway in the Senate on boys live on Capitol Hill with born. Exactly where we stand as day one I I expect comes to some sort of wrap. And what could be multi week process. Cheer along. O'Brien the Senate is now hearing arguments over whether to subpoena documents from the State Department related to that delay of aid to Ukraine. This is not going going to pass. But it is part of Democrats strategy to methodically force votes and therefore a public debate over whether witnesses to testify in the trial and what what types of evidence should be admitted. The real test will be witnesses and documents will are Republican. Senators serves pressure McConnell. So that we really have witnesses and documents produced either now or after the arguments are made now Schumer spoke to reporters during a brief break in the proceedings because senators are actually not allowed to speak. Wild trial is going on. They cannot use electron electronics. They have to take handwritten notes and there are reports that a few of them may have nodded off during parts of the trial and Schumer did not say though. How many amendments stomach rats plan to bring up tonight so everyone is bracing for many more hours of debate ahead and then Brian Tomorrow's Senate Republicans are GonNa turn around and hold hold a signing ceremony on the MCA trade deal? So you can see. They're trying to create a little bit of counter programming impeachment. Okay Ilan Moyal on thank you very very much. I'll let's go around the Horn guys trade this obviously we had a guest on the exchange today. Guy I mean and they said they'd hold Dan Clifton of strategic they said they pulled a bunch of institutional astute investors said about seventy five percent of the Sushi investors believe that trump would be reelected. I mean they liked him or wanted him to be reelected but they believe that to be the case is is there a risk here where everybody is too optimistic that there won't be that even at small percentage chants hell risk. I agree I mean I think there is a terrorist to this. And when you couple it with Tony Just said and we've talked about at this search twenty different indicators right now metrics that are flashing red now if this was just in a vacuum. I'd say no discount a given everything else that's going on. I do think there's inherent risk. I kind of think of south of thirteen makes zero sense in this environment. Okay well it's there. It is a lot of things coming up. It's cold it's beautiful. There are tons of opinion swirling around. We're going to take a deep dive into the view from Davos but with the big money and big thinkers are saying later on Jayjay reporting earnings earnings. Tomorrow what can you expect from this red hot stock stick with this one for fast money too. I'm more optimistic about stocks about but because when you look at the earnings we're going to I think we're going to get some pretty good earnings growth. This year I mean the economy. When you have unemployment rate this low you you bring in a lot of consumption especially people that are low wage workers? They tend to consume one hundred percent of their income issue. Is You can't jump into cash. Asia cash is trash. Okay you have to have a well diversified portfolio. At first you have to be global and you have to have ballots. I think you have to have a certain amount of gold in your portfolio. Or you have to have something to tarn. We're just again in the craziest monetary fiscal mix and history history It's so explosive. It's it defies imagination and. I don't think anything's changed. It reminds me a lot of early ninety nine or so that is part of the view for the World Economic Forum in Davos. Obviously Three Wall Street titans there three very different opinions wins on the market. So Dan Nathan. Who Do you believe is getting it right out of that esteemed group? Can I say who I think. Dan Thinks I'm sure Dalia untutored doing just fine. I you know here's the thing I actually think in trump. When he spoke this morning he knocked on the Fed he knocked on interest rates? Here as being too high. I think one one of the is going to be a great trade. This year is going to be long t lt long. US Treasury yields going lower. I just don't see what the impetus for them going higher and if we do get that earnings earnings growth. I still don't see rates higher. What happened last time? We saw rates go up with stocks at the end of two thousand eighteen. We stocks get creamed so it's interesting in the bond market would happen over the last couple of days. Is You actually saw real rates. which is inflation? bindis bonds. Go negative out to five years. This is the the feds tips treasury inflation that that hasn't happened in five six years and the last time we saw that you saw gold rip. You saw stock rips. You saw any hard asset rip. Why because if you're holding money out the five years you're actually losing money and that is a huge driver of asset price which gives you a little Dallaglio there and I think not? Surprisingly you had the full spectrum there delio sat right in the middle talk about diversification but he did talk about some of this but at the same time putting a portfolio together. I simply say it's hard not to in this environment. Think about asset bubble moments. Because this is what the Fed set out to do. Let's make no mistake. They set to create acid inflation. And they're being very successful. It may not be in all of our best interest and it may actually be financial oppression. But that's what we had. Obviously you know listen Scott Minor. I'm more of a bond guide guy but the reality he's busy awesome. Bonds Stink go with the equity markets. I mean it's throwing the in his opinion they stink. I'm more in a Dan Nathan camp. WHO's not a bond guide? I think T- Lt continues to rally again greatest economy in the history of mankind and we have a ten year yield at one seventy seven. It's telling you something I think. Gold does go higher from here and listen to Paul Tudor Jones. Think about it heap. Keep he thought about his words and he still came out with something that provocative what he didn't eighty seven. I mean he he was there you go. We got a lot more coming from Davos tomorrow. In fact we've got an interview with the president tomorrow morning. Joe Current president trump sitting down live from donaldson every at five am eastern time remember. squawk box starts early tomorrow because of Davos of can't live set your dvr big interview. There by the way also inducted Jamie Dimon. The CEO Uber and James Quinn. It all kicks off tomorrow. Special Squawk box longer version live from Davos by the way Janine remedy also in that feeling good good how options traders are gearing up for J. J. earning fuss what are we going to check on our Kramer camp. Jim was chatting Costco. CEO Stockton on fire this year. You're you bite him bulk. It's gyms full interview coming up at the top of the hour on mad money. In the meantime we are live at the Nasdaq. And we're back right up here. Welcome back shares of Johnson Johnson. He got another fifty two week. High all this head of tomorrow's earnings and options traders are betting even more gains with the company reports results. Let's get down to Mike. Cohen San Francisco to break down the options action. Like sure so we saw more than two times. The average daily options volume in Johnson and Johnson going into earnings right now. The options market is implying. A move of about two point one percent percents. That's slightly less actually than the two and a half percent that it's averaged over the last eight quarters and where we saw much of the opening activity today was in the February twenty eighth expiration expiration one fifty two and a half strike calls those were being purchased for about a dollar fifty five so buyers of those calls or risking about one percent of the current stock price on a bet that the stock could rise about three and a half percent or so by February. Twenty eighth to get above that break-even now what's interesting to me. If you take a look at the distribution of prices after earnings. You're going to see how inexpensive options are while asset prices and everything else have gone up options. Prices are still quite low. All you would need three percent three nine percent move to the upside to benefit or war if it went down more than one percent. You're better off buying these calls than buying the stock all right. Thank you very much for more options. Action always tune into full show Fridays five thirty. PM Eastern time. I'm all right up. Next is your final trades. Obviously people think of one of our main competitor Uber but I think about our competition as the transportation status quo and right now the average American household spends nine thousand dollars every your own and operate in a car that they used four percent of the time. I think that's ridiculous. Our opportunity is to give people affordable accessible transportation. Like never before your co founder. And President John Zimmer speaking to CNBC the company announcing a bicycle sharing partnership with NBA superstar. Lebron James You can read more on on our website. CNBC DOT com lift by the way. Underperforming Uber this year. Maybe your thoughts on these stocks. Lebron goal of but if you look at these stocks it's eleven percents had a big run big downgrade actually in the last two days. You great from seventy eight to sixty four Steve Downgrade from seven need to sixty one. I think I don't think you need to chase this one. Okay don't chase lift it. It is time now to go around the Horn and our final traits. Tim Why don't we start with you while. Jj might be a bit of a chase here too but this is a very different company in fact if you look at twenty twenty farmers going to grow six percent I I think they're medical devices. Starts to reaccelerate here. It's not crazy cheap but I do think in this environment if you are nervous. This is a great company so the big knock on goal has always been. It costs money to hold on to it in a negative real rate environment. That's out the window gold reptile Dan. Yeah that's what I would not be chasing after that. Quarter and that sub guidance is to sell into solar netflixing tonight. Brian despite my butchering of her name I think. IBM is turned. The proverbial corner likes the big. The big could stop and their stocks popping on that guys. Thank you very much watch tomorrow. Mad Jim Cramer starts right now. What is decision tech by fidelity? It's technology that can help you find a stock based based on what's trending or an investing goal. It's real time insights and information delivered in your own customized view of the market. It's smarter trading technology acknowledgee for smarter trading decisions and it's only from fidelity open an account today at fidelity dot com slash trading fidelity brokerage services l._L._C.. Member N._Y._S._E. S._I._P._C..

Netflix US IBM Dan Timmy Brian Tim Seymour Davos CEO Fed Tony Dwyer Lebron James Disney Asia CNBC apple Boeing Tom it
Fast Money 08/11/20

CNBC's Fast Money

50:27 min | 7 months ago

Fast Money 08/11/20

"Are you still using your trip for the rest of your body landscapes law more three point zero was specifically the to make manscaping. Patriot fans, gifts they technology. Won't make our snack water waterproof up resistant so you can train them in the south. Over the mass gay. Dot Com. They get yourself the law more three-point use code audio toward for a limited time. Get a free pair of racing free travel bag if free accelerate sippy. I'm Melissa Leo and this is fast money tonight line Guy Tim Seymour Karen Feinerman, and Brian Kelly tonight on the stage is set Joe Biden Picking Kamla Harris as his running mate will break down what it means for the markets as we head toward November plus a metal meltdown gold and silver falling hard in today's session. So is this trait losing shine and later vk a step up to the plate to pitches next? Best idea why he thinks this tech Titan still has room to run. When we start off today's a massive market reversal stocks giving up their gains in the final hour of trading. At one point today, the S&P five hundred was within five points of an all time high. As you can see, it close in the red meantime, the Dow squandering a three hundred sixty point gained a closed down more than one hundred points. You also got a headline at the bottom of the screen by the way tesla announcing a five for one stock split. We'll get to that in just a moment I'm bleeding today's tech losses. AMD dropping six and a half percent apple Microsoft Amazon facebook all falling more than two percent guy. What is your take on this big turnaround that we witnessed? Yeah. Well, I mean, obviously those leaders I mean. I would have thought something like this could happen weeks ago quite frankly. So the fact that it's happening today is just pick a day. I think the reversal is interesting. We'll see if it holds up tomorrow we've seen moves like this before the broader market has an amounted to much but to your earlier point, I mean, you saw a pretty significant reversal right around an all time high and the S&P Five hundred obviously these big tech stocks making a move I mean if there's one thing that I would attributed to. Don't discount the fact and Tim, we're talking about this before the show I think it's actually pretty important the news out of the big ten canceling their football season. That's pretty remarkable. If you think about how meaningful it is to those schools into the local economies I, think that was part of it today and I think the other part of is the fact that these stocks have been on such a ridiculous run. It was just a matter of time before we a move this magnitude at least. From a sentiment perspective, and of course, simultaneously, by the way we had senator McConnell come out saying that the stimulus talks hated a stalemate which may not be entirely surprising. So we're not really sure what exactly causes market move but from the sentiments standpoint canceling football, a tim is a big deal because we saw the sort of realization in the markets at this is going to be a very serious thing that the country was gonna move toward lockdown when sports starting getting canceled back in March. Yeah. Yeah. We all I remember when I heard that the NBA canceled their season. It was a profound moment and the irony is of course that the outperformance of the market over the last couple of days and I would argue over the last month in fact, the industrials the Dow is outperformed. The Nasdaq one hundred of the trip accused by almost six percent in the last month since July sixth or seventh. So I if you if you look at this type of news and if anything the reopening trade, which is something that that was really outperforming, we were getting airlines getting industrials we've seen transports and we've seen even some of the beleaguered hospital sector starting to get catching some of a bid. So this news as it relates to college athletics when you think about the regional impact of this, how founded is again, this is on top of the fact that the student body in many of these college towns, which are actually very large cities in some cases at least relative to their region and their importance to small businesses. This is a huge huge day for the sentiment of where we. Are and where we can really look to normalcy and now not only from a sports perspective. But from a lifestyle perspective, I do think this is important but back to the biggest moves in the market came in the biggest market cap stocks that I think is more related to rotation out of the Nasdaq that frankly makes a lot of sense. We also got a place on the viks where a low twenty-one handle I. think is just too low for the risen this market I think the market just decided to take a little breather. We wanted to get to the news on Tesla that I mentioned at the top of the show announcing a five for one stock split bursting with stop. In the session more than seven percent gain at this point. HAS GOT THE DETAILS SPILL Hey Melissa. This is something that will number of people have talked about possibly happening although I heard people say three, two, one, four to one. No Tesla's board has approved a five for one stock split. So here's what's going to happen. This is effective starting on August twenty first. So that's when you will see it take effect if you're shareholder as of October twenty first, that's when they'll do the calculation and basically split your stock into five pieces there, and then it actually starts trading on. The five to one basis starting on August thirty first, and as you mentioned the stocks moving higher, what it's six seven percent after hours after this announcement came out. So I've in the eyes of people. This is not a surprise given. The fact that as the stock got up here into that fourteen, hundred, fifteen, hundred dollar range, a number of people I talked with said boy if they had this back down to three hundred dollar range, you could bring even more people potentially into the stock. And that's why we're seeing the reaction that we're seeing. Amazing. Phil. Thank you fill about we're up in the eight percent range in the after a session in terms of again Karen we we saw the same sort of phenomenon with apple when it announced its stock split, we saw the rise and the And the RAW? I'm not really sure what the notion that the retail investor I guess can can access the stock a little bit more easily. I guess I mean the math of it obviously, it does not create any value, but that people think it creates value. So therefore does it's kind of ridiculous especially since we've seen that you can do. A partial shares now you can do trading with little or zero cost commission. So I don't know I I get that it works and so why not do it? The other thing is stocks that split have tended to be doing well anyway. So there is that sort of bias and conversely stocks that do reverse splits haven't been doing well, right but we've seen of. Course the rise of the retail investor Brian Kelly and space is a favorite space amongst these retail investors and you take a look at a Nikolaou which is forty one dollars neo, which is thirteen dollars, and maybe for for the average investor looking at a sock, that's fourteen hundred dollars a share is off pudding, and maybe this will actually opened the doors to more investors. I'm sure. Yeah. Maybe well, I agree with parents absurd. I. Mean There's nothing wrong. With you guys. Get. Six percent rise now but you know here we are now. So but here's the thing. Is that human beings like to buy a whole amount of something we find it in the bitcoin world I want to buy a whole Bitcoin I wanna buy one hundred shares full lot of Tesla and I can't do it at fifteen hundred dollars. It's absolutely absurd but human beings can be absurd. So if it works good for the company I, guess they created value out of thin air for the time being but investors at home should understand nothing changed with this company nothing whatsoever chain with the fundamentals of this company maybe get some more people on Robin Hood Buying in. But I you know I'm not buying Tesla on this newsletter. Sure The guy you have sort of this double. Catalyst potentially the thought that it could be included in the S. and P. Five hundred, and then all of a sudden potentially opened the doors to more retail investors. This could be sort of a double boost for the stock at least in the short term. Not Well clearly I mean that's what's going on I mean I echo. Karen. Be Tim now grudgingly probably you the absurdity of it and it's just but speaks volumes as to what's going on and you know this is going to I'm GonNa get added for this but I think for a lot of people they'd rather be long five shares of a two hundred dollar stock as opposed to one share one, thousand dollar stock I know there's there's an absurdity to that that. I can't explain but I think that's just human nature and I think that's what's going on here and obviously the same thing happened with apple and I bet you. If we ask Ken Show I don't know if he's still works the network but I think if we asked him to go back and look throughout history of stock splits I'm sure most of these stocks do very well on that announcement. So maybe there is something two yeah. Ken Show, of course, the data sorting. Service not person we've got breaking political news in the meantime presumptive Democratic presidential candidate Joe Biden picked his running mate. Let's damage average with the details. Amen. Yeah. That's right. It's Kamala. Harris. The fifty, five year old Democratic senator from California who was selected this afternoon as Joe. Biden's nominee for vice president to run alongside him on the ticket there Kamala Harris is somebody who was very tough on the trump administration and congressional hearings in the early years of the trump administration has seen as a formidable debate opponent potentially for Mike Pence for businesses and investors though they're going to start scrutinizing what her positions are in a number of issues somebody who does not link or self necessarily with the Progressive Wing of the party she said she's not a democratic socialist as Bernie Sanders has described himself. She's also called for the idea of taking A. Look at breaking up facebook and in terms of income inequality, she had proposal when she was running for president that would give a six thousand dollars tax cut tax reimbursement of people who are making less than one, hundred, thousand dollars a year. So that was her main focus she said on addressing income inequality across the country. All of those positions will be scrutinized by businesses and investors. But I, think what you've got to bear in mind it's very quick the amount of time it takes for vice president to align their positions entirely with the president presidential candidate they're running with. So I think Kamala Harris is economic positions will become Joe Biden's economic positions pretty quickly like as soon as. She says, yes, they're aligned. Amen. Thank you. Karen your first thoughts on this. The that that's why the markets sold off. Actually I think she's a safe choice, a good choice which makes Biden more likely to win, and if Biden wins I think that somewhat of a negative to the market versus trump but not a giant negative I think you know a warrant of VP would have been. Margaret would like that a lot whole lot less. You Know Tim, it's funny being on thin to it. In these terms sub-sectors like bitcoin and marijuana you get all sorts of things you know people are going to be googling. Camera plus marijuana comal up Las Bitcoin. Positions are. I'm not sure if this is makes a difference in terms of. The potrayed in that California was among the first states to actually go forward with with marijuana legally. Well, it is weak on fast money. So it's we're having this conversation. We're talk policy and a little bit later in the show I. I. do think that the the November election cycle we're going to talk about this is going to be very important. I think California's influence is not disproportionate frankly I think if anything California's struggled on the regulatory side and how they've handled. The adult market there I think the most important issues are the ones that hopefully we continue to talk about on the show as market analysts and not expressing personal political views. I believe the market's response to a Biden presidency without a clean bluewave sweep in the Senate would be actually maybe better for Marcus Dare I say I I do think that a blue wave would have implications. I don't believe markets price in and we don't know where we're going to be but I I do think that The Markets Calculus of an administration different from this one is something that it really has not done much with so far blue wave just to be clear meaning the presidency, the Senate and the House all go Democrat right and that would be the most change for the market which we perceived as negative because markets in general don't like change on. Let's get more reaction to all this. Get to Tony Dwyer chief market strategist at Canaccord genuity Tony good to see you. Oh, we're actually seeing you. That's great. What's your reaction to Biden Harris? I? Think it's as expected in it again, I don't really think ultimately it matters if you if you asked all of us what we thought of a trump presidency back when he was elected, we all would have. Got It. Wrong. So I think it's I'm hesitant to make a call on a vice presidential candidate making a difference when we didn't know how to. React to the actual Bresson presidential election last. Okay. Let's go back to the broader markets here. Tony we saw a lot of interesting moves today and over the past sessions in terms of this rotation, and we we saw some of the value sector still managed to hold onto gains into the clothes even with the market, a reversal namely, the financials, what do you? What do you make of all this? really Malek too. I think that's the challenge people have as we always talk about ordering the market. We'd better determine what market we're talking about because you know the I would say that to Timmy's point some of the. Pessimism over the election to see the second wave of the covid nineteen has been discounted in the market by the extraordinary move. In some of these stay at home stocks I was I was talking earlier on to Stephanie. We've got to be careful not to call the mega cap tech and the reason is because Amazon's consumer discretionary facebook and Google are. And Communication Services. So we have to be careful to not use just big CAP. Mega. Cap Stay at home, which is head and extraordinary run. So the challenge smell could be you get a sideways move in the market, my target thirty, three hundred plus were at thirty, three hundred. So maybe the market could move sideways and even come down a little bit as you get increased exposure on some of these economic sensitive areas. TD PK. So my question for you, I watched the market today seemed to me that the lack of new stimulus plan was a real driver of the sell off, which is something that I've been concerned about I don't see a lot of incentive for there be a deal prior to the election if we get no new economic stimulus prior to the election, does that change your view on the markets? I would be very surprised at that but. My. View is in about the next fifteen minutes next fifteen days in why I like the economic sense of areas. We have a never before seen level folks a never before not even close seen level of access liquidity access liquidity. My Friends Davis put out insurance to show its money supply plus founded stock mutual funds ATF. So money could have today or tomorrow you just take it out of the bank against what money is needed for economic growth. It has never been is high in at the same time the. Always. D. reported yesterday that you actually seen a pivot in the compas leading indicators from a historically level just like the summer of Oh nine from a historically weak level you're pivoting the thirty seven economies said that they're looking at on a month-to-month basis. So extraordinary Monte availability at a time when you're just beginning to pivot economic activity and similar to own nine, you can have We're a fifty percent you can have you can have, but to be bought not sold because of this economic money supply backdrop. It Tony Question. We asked last night and something that seems a lot of people are starting to pick up on. Now is the fact that you know GDP continues to head the wrong way and the market cap and the S&P five hundred vis-a-vis. The moves we've seen to the upside continued to go if you're long socks the right way, but you know historically one hundred and fifty percent or so has been a level where people get concerned and we're probably approaching one hundred and seventy percent. Now, do we need GDP to sort of ratchet back up or just unsustainable? Given given the the gap between the two now. Guyana under the video it's to ours bull case to ours bookcases, not S. and P. Five hundred up into the right here it is based on exactly what you just highlighted. You have to have economic activity. The amount of credit generation is beyond historic out it's beyond historic, which means if you don't have economic activity in the next six months. Start to pick up enough that companies can start to either pay back that that debt you. But you're seeing the data if it's up to opinion. Pretty good at being wrong I stick to the data. We have any time that you've seen a combination of historic excess liquidity coupled with a pivot from his from uniform synchronized recovery in the global economy. It's not time to be fearful even when the market is up and just from a volatility stem point guy, it's interesting when you look at the forty four day volatility of the S. and P. Five hundred high relative to its low. When you look back at times like this, it typically this kind of volatility spikes likely had and then collapses like we've had happened at the beginning of new economic market cycles and I think that's really the call here not what rotations gonNA look like in the next fifteen minutes or fifteen days. Tony to speak with you. Thank you. Thanks for having me guys. Great to see you Tony Dwyer Canaccord genuity carrying your thoughts on Tony and the Marcus today didn't get them because you're too busy talking, Tesla? Will the today? I. Mean. It was all about rotation and you know yesterday I was saying I my biggest fear about my Fang Holdings is just that the rotated out of which we started to see today. But for me, the biggest move was obviously banks and you know it's interesting because there are value play obviously and what I think about pe evaluation terms of. So. Many other industries have have had investors look cast twenty into two thousand and twenty one and not for the banks. But I think that they're coming into this in great shape and they've been reserving in reserving and reserving and I think when they reserve the next quarter even if it's as big as the last quarter, they're not gonNA announced they're gonNA nuts as earnings at October. So we'll be starting to look toward two, thousand, twenty one and the for. Banks. And Twenty twenty one is just way too cheap relative to the S. and P.. So I'm glad they started to move I. Think there's more room to go the valuation. Kasmin is just too wide. Yeah. Along with that move in the banks, them strengthened banks today we saw move notable move in the ten year yield higher. Brian. Kelly but it wasn't just the bank's holding onto gains into the clothes. Industrials transports the groups that have been strong in recent sessions. Yeah. It was really interesting because you even saw before the. Producer price index come out today that was higher than expected. So you kind of thought it looked like maybe we're getting a little bit in an inflationary push here. You had yields really start to rise relative to where they've been. This was a pretty big move out there today. And so that fueled the banks but that also says, Hey, maybe we're actually seeing some economic activity, which is what is what Tony Dwyer was talking about, and then you get this kind of re readjusting of your portfolio where negative real rates maybe they're not going to be as negative as we originally thought and you see stuff and we'll talk about golden silver later but you see stuff like that reversed of. I still think I'm not a buyer of the banks I mean they can go higher. That's fine. Go hire without vk riding on them primarily because I'm I'm still concerned that I don't think we get a stimulus package before the election and to me I don't think the market's price that right coming up losing their luster gold and silver prices plunging today we'll dive into what's behind this drop in later getting lit a week long cannabis gray series continues with a look at legalization and the companies that stand to benefit most more saints give pot the green light fastness back right after this. Are. You still using your beard trimmer for the rest of your body mass gapes law more three point was specifically designed to make mass gaping. Patriot fans, gifts safe technology tremor won't make us name waterproof. AESOP resistant. So you can tremendous out bend over the Mass Dot Com they get yourself the law more three point use code audio tour and for a limited time, get a free pair of boxer briefs a free travel bag if free accelerate SIP. Welcome. Back to go posting its biggest daily decline since March silver also getting slammed logging its worst percentage drop since March of this year as investors rotate out of the precious metals for safety back into stocks both golden silver still up double digits this year but as the metal shining rally finally beginning. To Rust. Of the writing on the show is very, very creative, very talented young staff that we have on fast money writing these very clever pithy little. Allegiance a guy what do you make a golden silvers move? On one of the beautiful things about gold is it doesn't Russ that into the reasons why probably you know the chemists out there don't care i. what do I think about it the Greg Carter Braxton worth who has a twitter account by the way you should follow him pointed out to today's move goal percentage wise is twenty-seven. largest moves. So it's not even in the top ten. The biggest move we've seen was in March of eighty was down nine and a half percent, and I think a week or so later was fourteen and a half percent. So I think it's actually encouraging now I understand that if you're locked her today in the minors got wacked. But I. Think this is part of the both these people get blown out. They think it's over and I do think a week from now given the data that we're seeing the inflation is out there and given the fact that people still looking at torch their currencies globally, we're going to be talking about a gold market going to continue to go higher. So I think this is just a blip in a road at least for me bespoke also pointed out that asks for silver. It's still closed more than forty two percent above its two hundred, eight moving average in more than twenty, three percent above it's fifty day moving average. So the long term in the momentum trends, they're still intact him. and I'm surprised I didn't use the opportunity to say that Neil Young's rust never sleeps is really one of his some of his best work. You have a case here where we're gold has not slept either it has been a massive move if you look at your positioning whether you're looking at. C.. Excuse me data. We got overbought. If you look at those numbers if you look at inflation break, even expectations were as high as we've been since mid-february. So Pre Cova if you get to a place where you start to say a lot of the gold move is not just been Fiat currencies or as a function of that, it's been this fear of a deflationary spiral I actually think inflation typically at least at first blush even though gold could be argued as defensive in an inflationary environment. It's actually going to be negative for gold but I think what guy was saying because I would agree with this is that this trend is not over if anything it got a little have itself and I do think gold is rallying silver will outperform gold peaks. Yeah I actually bought both of those two that I bought gold and silver on this selloff because I think the only thing that really happened today is we had the thesis or the theme that you had here, which was negative real rates. Those negative real rates got less negative and so you had some people having to rotate out of that, and so it was kind of more mechanical. They also raised margins, those types of things, gold and silver through this you know they're they're volatile. Commodity. So I think there's there's nothing wrong with this. So I don't think there's anything that has really changed dramatically with the reason why you want to buy gold silver and digital gold of course bitcoin it's because countries and the US in particular no matter the Republicans or Democrats win they're going to print heck of a lot more money and you're probably going to get something like modern monetary theory Mt, which means you. Just, print a whole bunch of money and pay for everything everything's free in those environments I want to own both gold and silver record. All right coming up transports on a tear but is the sector trucking higher. From here we go off the charts for some answers plus we're counting down to earnings from lift. What options markets are saying we should expect from the ride hailing giant that and much more when fast money returns. You still using your beard trimmed for the rest of your body masks law more three point zero was specifically designed to make manscaping. Patriot, fans get safe technology. Won't make our snack it's waterproof shock resistant. So you can trim in the South Bend over the Mass Game Dot Com they get yourself the law more three point use code audio twin ever limited time get a free pair of boxer briefs a free travel bag have free accelerate sip. Welcome back to pass when a Boeing shares getting a lift today despite some dismal new numbers on orders. Let's get the fellow at the details fell. Is Market at least investors looking through the bad news from Boeing from the airlines in terms of passenger levels and saying, we'll eventually it's going to bottom out needle improve because if you look at the July numbers for orders and deliveries, it's more of the same story. We've had the sixth rate month where you've seen negative orders on a monthly basis they've yet to see positive growth in any month this year in July negative fifty, two planes year to date negative, eight, hundred and thirty, six, planes one, thousand and forty-seven you're looking. At the Max orders the orderbook for the Max since they started having cancellations last year and order adjustments negative one, thousand, forty, seven. That's how many have been taken off of the orderbook and yet is you take a look at shares of Boeing today it moved a little bit higher actually pulled back with the rest of the market but finished positive quickly, WanNa talk also about the fact that they delivered four planes in the month of July seventy, four a year to date. Now let's switch to the other side of the equation when. You're talking about Boeing and the airlines and that's passenger levels there has been a sense within the market that things are improving when it comes to people who are flying and yes, it is improving but not a lot up to six point nine percent on a daily basis this month compared to July we're still down sixty nine seventy percent compared to the same time last year none of that seems to bother people who are looking at American Delta southwest united. You go back to last Wednesday when the president said Yeah I think These guys probably should get another twenty, five billion to guarantee airline jobs. Stocks have been having a really nice run although they did pull back late in the day today along with the rest of the market. So that's what we're seeing more of these monthly reports from Boeing and who knows when it ends. Melissa but at some point you're going to see a sort of a okay. We have flushed out what we think in terms of cancellations or order adjustments when it comes to the seven three, seven six. Thanks good to see you. In Chicago Karen Hash way think about the airlines at this point I mean with the promise of aid coming a deadline. So to speak been pushed out and so even though the improvements and traffic I've been so small, we just need we we've bought the airlines or maybe the airlines are getting more time in order for that traffic to fully return if there's additional aid. Right so that's really important that they can survive but in terms of valuation I mean there's been so much new debt on these to fund the you know the burning well, it depends on the airline but up to. Thirty million dollars a day or more, and so the valuation is still I think really stretch stretch just during the break, I looked up some American airline bonds I. Think they returned twenty three, twenty, four trading at Seventy, eight cents on the dollar that's not consistent with where the stock is and so to me I feel like debt markets always understand better than the equity markets I wish the airlines well, I hope we have a vaccine quickly and things get better fast but the valuation here I still find not even close. Yeah. The moving Boeing today was very interesting guy it was. Ten dollars higher where it closed at one point in the session before fell along with the entire market. It's been a great training vehicle and I know you have a memory Kim I mean basically unrivalled in the industry and you will remember at the end of June. We played our great game trader faded and you ask the aforementioned Karen Feinerman what you thought about Boeing, which at the time was training ninety five and she to her credit said faded and we got into a conversation about levels I. Think we talked about sort of the one sixty level being you re entry point. Back I think maybe only ten or so trading days ago traded down to one fifty five. So that actually proved to be a decent level and I think you study long against that one sixty it's the same thing with the airlines just become trading vehicles and Delta for example, in terms of levels twenty, seven dollars, it's been a good pivot level so. I think they're headwinds for sure. But if you just look at some of the technicals they've worked I think they'll continue to work in Boeing more broadly the transports have been on a tear recently, the group climbing nearly seventeen percent over the last month. So where they had a next time to go off the Chart Todd Gordon percent wealth partners todd looking at. Lissa. We're looking at the air freight logistics part of transports rather than rail truck, trucking airlines, they they take about thirty percent of the Iowa transportation in the to stocks I'd like to discuss here ups and Fedex about twenty percent first. Let's take a look at the y t the stock has been. Sharply, kind of move towards a breakout level at about two hundred and one. That's the resistance below that and you look at I Y S ratio starting to move up since the end of May. So large retailers were on Heinlein to build off your ecommerce platforms pre covid but this is obviously driven more guys online more shoppers online more products are being shipped in the to the beneficiaries or ups and Fedex. Now, this is within the context of Amazon. Sort of doing their last minute delivery program trying to compete against ups and Fedex, but they have immense air fleet delivery, fleet international shipping networks, big global operations. It's it's going to be hard to duplicate, and just for full disclosure, we hold ups and Fedex in our strategy. So we look at the Fedex monthly chart traded down during the initial cova response. The lower end of a big support channel right around eighty five didn't even fully test that channel. Goes all the way back in nineteen ninety three. So pretty significant on the weekly chart of the two hundred dollar level is key resistance in Fedex. We'd like to get through there to confirm that we're going to continue to go on fed ex is doing fine post Amazon their last report they showed BBC deliveries moved up to like seventy percent of volume for fifty six a year ago it's a lower margin business, but the two companies are implementing charges surcharges. Holiday season that they expect to continue through Kovic. So ups switching over there. That's the clear winner and the transport and. From the technical point of view, be they in Bernstein, improve their outlook in the stock ceiling by two point, six percent ups on the monthly chart. The breakout is already occurred clearly ripping on the upside I we might be meeting some resistance around one hundred and seventy that might offer a near term pullback in that source all the way from the credit crisis loath ups earnings been extremely strong again with that surcharge the holiday season. Tied good to see thanks tied Gordon Twelfth. Brian Kelly. What do you like transports? Yeah I mean I think the ECOMMERCE play is the way to go and I. You know ups, Fedex, both of them are benefiting. You've shipped anything recently, but they're they're suspending their guarantees that it's not gonNA. They're not saying that it's going to get there overnight anymore yet they're charging me the same price. So I actually think they're in the catbird seat in this on if you WANNA stick with the ECOMMERCE, play it one other way, and it's not even in the transports, but it's kind of ECOMMERCE. Real estate term I would say pro largest trust they operate a whole bunch of. Warehouses which you need an ECOMMERCE, another way to kind of play it. All right kind of APP another development in the drama at Kodak. Time gift might mean for one corporate executive but first VK here he's winding up for fastpitch on one big tech stock like he thinks one name is ready to outshine the sector will bring it to you right after this. Welcome back to one despite the recent pullback tech has clearly been in rally mode. This year, the sector is up more than twenty, percent twenty, twenty and Bakke says the Ryan isn't done for one big tech name so. The mound give us your fast bitch. Let's do it. So it's a pitch on Microsoft and I've got a couple of points about this number one. This work from home trend I think continues we have a big secular tailwind here and I'm not discovering anything new this shift to the cloud work from all the not Lewis and Clark here but I what I do think is people are discounting the fact that even when we get back to work a larger percentage of people are going to be working from home for a period. Of Time maybe it's a couple of days a week and that type of shift cloud is going to continue. So I've got a big tailwind there over the next couple of years. Then let's Talk Tiktok I happen to think it's a distraction for Microsoft but guess what it doesn't matter what became things because the market rewarded them when they thought they were going to buy it. So let's see if the if the tick tock deal happens that's good for Microsoft if it doesn't happen I actually. Think that's good for Microsoft is well and you look at how it's traded. It's kind of build that tick tock gap today prior to the big sell it was actually trading near the highs of the day. So that's kind of interesting. Now, let's go down to valuation. You might say, well, listen vk this thing trading thirty, eight times next year earning. That's insane. That's too expensive. Well, let's look back at the history of this back in ninety nine. You had this thing trading at eighty. Times. Earnings. So there's a lot more room to run here, and let's talk about the liquidity in an environment where every central bank is blowing the biggest stock market bubble we've ever seen why wouldn't this trade and eighty times his? Who knows I mean in this environment? What multiple put on that? So for all those reasons I actually think you use the weakness in Microsoft to buy it here, and that is my fast pitch. All right we're opening up for questions. Tim has got one tim. Yes. Brian longtime listener first-time watcher just kidding. I think you have a case here where the cloud story for Microsoft continues to be a very, very strong but I'm very concerned about the intense competition. It's not just Amazon. It's not just google. Becoming from good old IBM which is hard to believe. But how do you feel about the competitive landscape and the profile on margins? Yes so that if there's any knock against, it would be the competitive landscape. We saw that they're actually you know they're starting to. There is some competition coming in where people the Pie maybe this only this big my view is this that the pie is actually growing and going to continue to grow, and therefore Microsoft which in my view has probably some of the best management team out there is going to be able to navigate that and they're gonNA. Probably be best in class in that area. All right now question time to vote. Are you buying qes pitch on Microsoft? Around the horn. What? Guy What you say. Can you see that Mel does that come up on your screen? You see what that is the picture who that is now. That's a picture of beaks from trading places and I am so with that. And this speaks and he makes a very coach and arguments. So put me in the checkmark box for Brian Kelly Karen what do you say Yeah well, you had me at hello, their beaks I've been actually quote myself because he go home long. It's the same as buying it right here and I am long. So it is the same as buying it right here actually went yesterday so I bought it at that price too. So I'm in it's expensive, but I'm in Tan. Clarence beeks was very rude to that elderly lady who tried to get into the phone booth and trading places but. I'm a buyer of Microsoft I agree to this story continues to have legs even if it's GonNa pull back short trump I'll clean sweep peaks are traders have spoken but are you at home by became fast pitch on Microsoft announced twitter poll fast money will reveal the results later in the show. But up next, we're blazing forward with our week long series on pot stocks how the November election could be game changing for the entire industry. The details top analyst take went back money return. We'd hear and fast money where we give you the lowdown on the current state of cannabis industry and what's to come, and that includes a couple of key dates this fall on the road to legalization. So we thought our next guest gives his take on how things could play out in the next year which names to watch. Is An analyst at Cantor Fitzgerald Pablo. Great to speak with you. We're getting a little bit more clarity on what the race could look like the president presidential election could look like with a Biden Harris ticket. I'm not sure if that influences how you think about the election or you what sorts of issues are you thinking in terms of the pot industry? In what the elections could shape. On the regulatory. Front or enter prohibition, we really divide discussion in in three areas, right? Yes. Appreciation maters. But but the first thing that we're very focused on is at the state level that. in November in New Jersey in Arizona. Right. You also have South Dakota Montana. There's four states that are going to vote for legalization of recreational cannabis that's very indices on your Jersey. It's very likely that there will pass. That's what the polls indicate, and of course, neighboring state stating they used Pennsylvania Maryland Connecticut New York we'll. We'll follow very quickly so. By middle of next year or late, twenty, twenty one, you will have a situation where does to twenty states in the US have legalized recreational cannabis at the state level. I'm probably another forty have a total forty will have some medical program, right Rosca another. So it also looking at voting. So we're very focused on the state level. The second point is that regardless of who has control of the Senate next year? Even the White House we think that it will be significant up racer for banking reform for the industry for something that's called the safe died or something along the lines of that. That was the house last year Republicans supported it but the. Vote in the Senate. But we believe that regardless of who controls the Senate. Because the fact that you have so many states approving wreck. Close to eighty percents of. States. That consumed rank you would have to pass banking before Mandela, will improve capital flows Listings for some of these companies and we just a dangerous industry overall the third part, of course is a presidential election and then who takes control of the Senate. The first two points to to us at very foolish for the industry wants they live changes and then the passage safety act or some form of banking. Before the third part, it's more making kind of is fatally permissible, and we think that's more likely under a Senate that would be their control them. That's of course at. St Louis. Toss. Up according to the latest polls but that would help with. Reality that was even fielding third I mean the only last thing without here is that I know everyone is very focused on on the Biden plan which talks about favorite legalisation of medical cannabis to be honest we think that that will take time. Any may end up being a moot point very briefly I. Say a moot point because you have twenty states legalized tanneries then medical doesn't. Make much of a difference on top of that state has different norms for medicals makes it difficult to implement a federal program I of course, the change companies, the states that are doing very well in predicted state right now may not want to may not necessarily being faithful failure legalization in shorten. So when they put it all together and addition I would. I would fact that Under the vitamin, platform and under the Democrat ECON Senate. kind of reform will not be done in isolation. You will be passed part of healthcare reform, criminal and police Justice Reform and that and social social equity. It would be part of an overall reform and I think that that will take time and We'll see how that place out even if you look at New York state which is controlled by Democrats or the governor later level. Win Agree on a path forward break I mean it may happen next year of course. So what I'm saying on the fair legalisation, our take us that more difficult on the medical side when they realized that it may be a mood point and they think, well, we should legalize wreck but under the vitamin presidency in the next. Unlike Three things they said it'd be it sounds like your base case scenario for the industry or or to bullish areas in which you got more states legalizing led by Arizona New Jersey with the neighboring states to follow and then more access to banking. So if these two scenarios are likely which which company, Santa Benefit, the most right I mean for example, you know. So now you have a company called Harvest Dot Hilton recreation sales come Arizona, into gives a New Jersey you have a you know companies like relieve acreage holdings the have exposure to New Jersey interested what's called failure permissibility kind of be good old they're gonna eat and company has a deal that's contingent on fair to buy acreage holdings right and that stock traits about. of the deal. So if if you get something like that states act therapies ability being approved by Congress by the Senate and the President acreage holdings in that case with double, that's actually play that but that's the way we would play. The only thing I'm with that intensity. You know when people go kind of dogs and the opposite here. Well, it's been a volatile sector, but the numbers for the industry at least in the US either very bullish right you're looking at Illinois about up three times since legalisation. Sylvania retail almost four times. Two Times. So very significant growth in this market that this year do about sixteen billion dollars on illegal eyesight the total market lease it it's it's calculated seventy five to one hundred billion just still significant upside even if a trickle way, right? This overstays my stay with we see significant for the sector and course for the right company will be the lies with the right strategy in the right legs. Thanks for your time Pablo. Of Cantor Fitzgerald Tim Pablo was mentioning the explosive growth. Recently in some of these states and I'm wondering how much of that is just people are locked up at home and they've got nothing else to do and so therefore it's not it's not gonna be repeatable in the future. For so we've already had an opportunity to our people still locked up now because I think what we've seen is actually the this urge that you saw that might have been the pantry effect from March and maybe April has been exceeded in May June and July. I think you've seen a lot of companies effectively pivot in terms of their logistics and fulfillment and actually be able to deliver last mile. So it's actually made a lot of companies a lot more competitive. I think the point's. Pablo brought up around legalization. And the dynamics here I think the most important thing is that the states still so far have been holding the keys to the fortunes of a bunch of companies and I think New Jersey coming online the northeast essentially he's GonNa flip I think the companies that have an advantage of the ones that are most position in the limited licensed states and. Strangely enough or ironically for most people, the east coast is more profitable and more interesting for investors. I would think it is to me than the West Coast, and that's despite the fact that California's a more mature market but again, legislation will be very powerful, but it's already happening and a lot of the most important companies in the sector probably are pulling for federal overnight I. Think they're doing just fine. Yep. We've got a news alert coming out of the White House. Let's get to make Ralph with the latest MEG. Hey Melissa in President Trump's five thirty briefing today he announced a supply deal with Madonna for its covert nineteen vaccine the US government contracting by one hundred, million doses of Maderna's covid nineteen vaccine for one point five to five billion dollars setting purdis price of about fifteen dollars, twenty five cents. But during here up nine percent on this news there the sixth company to strike an agreement with the US government and some were wondering when this was going to come because the government had been striking. So many deals this is probably the highest price or among the higher prices we've seen so far of course, the Pfizer deal was for nineteen. Dollars fifty cents per dose of advisor didn't get any government funding and Madonna had received almost one billion dollars to support the development of this vaccine additionally The government has an option to purchase four hundred million more doses in the company saying that the vaccine will be free to the American people. Here's a list of the supply agreements that the government has struck so far although some of them, of course, include supporting development Malbak to you right. But we know the John Jay and Astra Zeneca for instance, vowed not to make any money off the vaccine, which may be one reason why they're priced much lower than say Moderna or Pfizer. Yes, very different propositions being put forward by these companies interestingly Pfizer, very large company, but not saying, it's doing this not for profit Yep. Thanks Mike Terrell. Guy W what do you make vaccine US keep trickle trickle Fascinating obviously I mean. So remember maternal was north of ninety dollars. I think given this move it's probably what seventy four and a half I don't have it in front of me but given the math and mel make just put out there makes sense what do I think of it if you're looking to trade it, I wouldn't look at Madeira I would look at Gilead if you see weakness and Gilead off the back of this and Gilead has Been Week for quite some time. Now, sixty seven and a half has been a level where was resistance many months ago resistance become support. So if there's if there's weakness on the back of this, which we've seen before I'd rather by Gilead at these levels and try to chase Madonna, and of course, I, thinking about Gilead is if if you have a vaccine, you may not have as much a demand for some sort of treatment which Gilly add. Is is offering here Brian Kelly. How do you look at the space in terms of Pharma? The big ones the tax. So, I mean one I would by Gilead for exactly the reason I think even if there is a vaccine is going to take some time to get into. The Population Madeira I think the trades over that's it. That's what you were in it for your in it that they were going to be able to sell that sell out there vaccine they did it. There's your price it's over. So you sell them dern you by Gilead Aaron. Let's switch gears here. Lift is going to report results tomorrow after the battle often are betting about Uber's poor performance. Last week could signal that lift shares or about to hit the brakes. My cousin got the action he mike. I'm Melissa as You Vindicate Your Options Traders can be fickle last week we saw a lot of bullish activity in guber ending lift going into guber earnings. Today that kind of reversed we saw quits out trading calls by about three two two right now, the options market is implying a move of about eleven percent that's pretty much in line with the ten percent so that they have averaged over there reported quarters the most active. Options for the thirty strike puts the lens that expire at the end of this week over twenty five hundred of those traded for about a dollar thirty, five buyers of those puts are betting that there could be additional pressure on the stock following earnings by the end of the week. All right. Thanks for that night more action full show Friday five thirty PM eastern time ethnic results of the fast pitch pole loss final traits. Andrew you at home became fast pitch on Microsoft. Apparently it was a total homerun sixty, six percent. Microsoft's. Winner Kelly good for you rug time for the final trade tim see war. Yeah we were GONNA. I'll do it here. Trade at best buy back to school is going to be extraordinarily Karen. PPI was just a hint I think we'll see more inflation CPI tomorrow I'm Short T lt Aka. My life is my new ringtone because I one that. I think you by silver. Out there don't be afraid of the volatility. Always your ringtone guy. I'm going to blockbuster and read trading places for the VCR and think Gilead, if there's any weakness. You Buy. Gaol. G.. I L. D.. All right. Thanks for watching fastest back tomorrow five for more fast money meantime mad money which impre framer starts right now. INVESCO Q. Q. Q. believes new innovations create new opportunities. Here's to greater possibilities together learn more at INVESCO dot com slash Q. Q. Q. Invesco. Distributors Inc...

Joe Biden Microsoft Brian Kelly Senate Tim president Tesla Boeing Brian Kelly Karen US Amazon cannabis California Fedex Melissa Leo New Jersey Patriot Tony Tony Dwyer Gilead
Fast Money 10/18/18

CNBC's Fast Money

45:15 min | 2 years ago

Fast Money 10/18/18

"Are you prepared to navigate today's bond? Market's at MFS. We help advisors help their clients by assessing market risks and finding opportunities, learn more at MSN dot com. Right now, the NASDAQ market site overlooking New York City's Times Square. I'm Melissa Leo traders on the desk or Dan, Nathan, Brian Kelly, Karen firemen, and Guida me tonight on fast the momentum trade is losing. Well, momentum tech stocks are fracking. And atop technician says, there are two names that are about to break out. He will be here plus the new CEO of Goldman Sachs. David Solomon speaking out for the first time since taking on the role, we'll tell you what he said that could finally have investors excited about the stop. But first we start off with today's a big selloff. The Dow sinking nearly five hundred points at the lows of the session is threats from around the world, hit home, Chinese stocks getting crushed under president. She's rain is trade talks stall the US pulling out of the summit in Saudi Arabia after the suspect of killing of a journalist by Mohammed bin Salman UCB's draw gaming comments about Italy, that shook the markets. And then of course, the looming threat of the Fed's Drome Powell and his next move with all of this going on our earnings, not enough to save this rally. And is there more. Pain ahead guy two days ago. We're playing that horrible. Everything is also remember that. Now, and I said my God, that's an awful song. Everything is Jewish. You're not playing some. That's not my. I don't wish for things to go. But yes me is the worst over and I said, no, listen, I said to you, if you'd said to me guy, gay, five hundred point move up or down. I said, absolutely down. It was up. We had that conversation. We did. I was. I was there then I said you, but you know what? I still think there's more pain ahead and here we are today. So is it more paid from here? I think so, yeah, because I want it to happen because the market is telling you that I'll give you a couple of samples and kudos sedan Nathan. By the way Netflix show the day. We all heralded as a great quarter thin said, fade it right back to where it was four. We did talk about that same night. More importantly, I think was Chesapeake. CSX who reported what it was. CSX Chesapeake. I'm sorry. Chessy railroad. I don't know what they call. I used to call if you know, in the old days. That that's not all. Exactly. With that said a pretty outstanding quarter. We said it needs to get above seventy five bucks. Look where that stock is today. Two days later, trading sixty eight now. So good quarters have been faced with selling bad quarters. Companies are getting a Blida rated and that's completely different than we saw six months ago. So with that said, yes, I still think this further downside Hanks were tough today. Industrials. We're tough today. Yes, transports were tough today, right? Small caps knowledge. He thank you for everything I have. Yes, not have to that every single thing. Yeah, pretty much every single thing. Yeah, you know the banks with at least of it action dot in this market. That was fun for me industrials. My exposure you are United rentals was awful. Absolutely awful. I thought that the reaction the stock was way way bigger than what they actually put out, you know. So we had China overnight and that that's kind of spooked the market. And then so Caterpillar, of course, straight down in the. Stroz down. Remember United rentals, eight entirely US and Canadian business, right? They've tiny, tiny exposure Europe. So I think that was way way overdone way beyond what they reported, which wasn't terrible, wasn't good enough in this tape, but there were some things to like about it as well. I'd like to buy more United rentals. I don't think today didn't they feel like today was the day to do it. I kind of like to wait two or three days, you know, the three day rule, I think analysts will come out one. I think started already coming down grading it, but I think I thought it was actually not bad. I'd like to buy more of that. I probably will buy more of that, but I want to wait a little and I think that's exactly what everybody's saying it's market. Right? So all these things that brought the market down today had been around for six months. We've talked about, we've debated about all of a sudden it matters and there's no reason to buy, why do I need to Russian and out onto a position? Why not let it come to me. There's no low. It's exactly the opposite of that in this particular case. Now, all of these particular things, the four things we mentioned at the top. Any one of them could be that catalyst that six months hurts earnings, not necessarily doing today, but the market cares about it today. And I guess I'm in the camp. You guys, I think we go lower. It doesn't feel like we've washed out on this. What will, here's the thing they are hurting earnings and they're hurting outlooks in the uncertainty about all of those issues geopolitically and some of the stuff that are kind of, you know here, domestically are weighing at least on guidance right now, we're seeing it way on margins. That's why a lot of these industrials are getting hit you talking about this, you are I, it's coming to you. It's at a fifty two week low. Over the last month. It's made a new fifty two week low about every day. And I could list off a whole heck of a lot of other stocks that are economically sensitive. They're doing the same thing. So the question was will earning stabilize the market decline that we're in right now. The p. is about five and a half percent from its all highs that made last month and I can test there's five stocks that matter. It's the maga-, an ethics, Microsoft, it's apple, it's Google Amazon. Okay. And then you throw Facebook in there. They make up twenty percent of the SNP. They make up a disproportionate amount of the s. Expected earnings growth. So that's what you're valuing. The SNP. The other stuff is cheap, but it's cheaper reason. They've already hit peak margins. They're already like they're stealing massive deceleration in their earnings growth. So we've already seen this Facebook. That's why I'm not into the FANG. Sorry, Kramer Facebook's out. It's been related, right? You've taken the earnings estimates for two thousand nine hundred down dramatically. So the question we have to ask ourselves into two thousand nineteen. Is that gonna happen to maggot? It happens the maga- the SMP's way too expensive question. In terms of of the software, you're watching that matter. Is it because they're big weights in the index or should we be more concerned about stocks that are bellwethers for the US? Well, I think there's a couple of things right here. I think what we learned last week and I think what we learned today when the market starting to celebrate to the downside when you have those four stocks exceleron and they go in the same direction lower, it's going to drag everything down with it. You're not going to actually start to pick these names these that are getting all beaten up, right? You're actually going to go to the source of funds. And I think that's what's happening and. I don't think this has happened yet. I don't think you're not going to go pick it. Which names the losers, the GM's I know keep doing it just keeps them dry powder. I understand. But like here's the thing, Karen, where you and I disagree. Okay. Everything, but go on. Well, we're, you. I got to worry about. Douar is not even here. What the. Very simply as I don't think they're very few investors out there that are really repricing those big mega cap tech stocks for lower growth. Next, I think those are the things. So when we get there earnings and they start in earnest the twenty fourth, the twenty fifth, I mean, and to the first that's when listen. But here's the setup. If the rest of the market, the rest of the sentiment keeps taking those lower into it. We could have the sort of bounce that we saw a Netflix, the worst case scenario they get a bounce, and then. Wants to bring in Tony. Admiring dan. Awkward if we didn't address. Next to them usually is over. All right. Well, Tony here says this market correction and the sell off may not be over just yet Tony of courses of Canaccord Genuity fast money, friends, Tony, good to see. What are you looking for in terms of signs at this is over or the markets will stabilize. I'm really hunting mouth for a fundamental real fundamental reason other than what we know in what's going on in this declined because it feels so awful. We a couple of weeks ago on the show we, we identified a couple of indicators. It said, we're in a correction, it's going to get worse. It it did. Part of that was I think this whole correction was born more out of excessive bullishness with over sixty percent of newsletter writers bullish according to I in extreme intermediate-term overbought condition and vix that was at eleven or twelve. So he had historically low volatility, historically high complacency, and in a bull market where you're in a fed tightening regime, that's going to open the door for kind of an added the nowhere. Okay, we knew that, but it's going down now big anyway. So I'm kind of in the camp with Karen. I think, yeah, this is tactical market that is under a lot of pressure, obviously. Right? And I've always said, I'm, I'm not a great trader, right? And I'm good at being wrong. What I'm pretty good about is identifying intermediate-term bottoms in historically when you get the vix to spike like it has on on either itself or on a rate of change indicator. When you get the market washed out is identified with a percentage of stocks. Trading above the ten day. Moving average got down to two percent less less Thursday. When you get into those kind of numbers, you're kind of circling it and what you really want to see as you want to see a positive divergence on re-test. So you want to see like the vix not go back up to twenty eight when you retest or even slightly break the low so I could. I could easily see that, but I think you want to be a buyer of that. So Tony, about six months ago, we talked about the flat yield curve. You argued that the market could run eighteen months at least with a flat yield cart. So now we've got, we've got twelve or six months into it. You're spot on. We've got the next twelve months is the market starting to price in potential recession in two thousand nineteen? I think it absolutely is inappropriately beginning to discount a recession. Here's why. For that. Okay. Okay. So here's what from the initial day of the inversion of the two, ten US treasury curve. The market peaks twenty one percent higher eighteen and a half months later, we have an inverted it from the cycle. Peak in the NFL small business optimism index, you go into a recession in median forty one months later when the ISM manufacture which that happened last month when the manufacturing index. So not just not just small business manufacturing peaks for the cycle. You have a thirty one month lead time. These all line up to be the same to be approximately, right. I mean, when you take a and bit. Let's all cut to the chase, right as much as people think I'm I'm not. I'm up purple one credits. Good. I'm a perma bear one. Credit's bad and credit. No matter who's talking she Jimmy time and knows a heck of a lot more about credit than I do care knows more about credit than I do. Larry Fink knows more about credit than I do. They run huge companies and they are universally saying, we don't have issues in credit. All right, but they are speaking to like slower loan growth until one of the things I think is really important, and we're just having this discussion with Karen when you look at all these Eakins economically sensitive groups. I mean, let's look at the autos. Let's look at somebody's industrials. Mascow look at the home builder's. I mean, it's really horrible action at this stage of the cycle. When we're tightening, why would you dip you're so into by any of these things in the ninth year of a bull market? When everybody sees that verdict, you'll curve in their counting down your eighteen months at some point. Nine thousand nine haven't in various. So here's what I went back now. Not fine. Let's talk about data because you and I could agree or disagree, doesn't matter are paints or twenty questions. Why would you buy any of these stocks trading at fifty two week low. Thanks which so for you sitting there, not a traitor, you said you're not a traitor, bear market rallies when you get to an eighteen basis point spread in the to ten curve, Dan historically, you get a restraining. We've recently just had banks wait a little bit. I've done this on the show inappropriately too early, and then they rip and anything you met. So in the bottom. In early nineteen ninety-five in the banks. Guess what? That they were breaking down? And they looked horrible just before historic outperformance, two thousand and five very different cycle from again about eighteen basis points. You've got a restraining. You're telling me that CitiBank is going to make a new high that that Goldman Sachs Morgan Stanley gonna make new highs in this cycle, not a channel bet you a Dan, Nathan crypto coin, that remodel. In south before out before they've been massively under performing for the last year. Goldman Sachs was trading on eighty one day of the election and since gene to twenty-five accurate. They had an extraordinary outperformance through the end of last year in through January day have absolutely underperformed sense then. And I've openly say it's been a horrible call. I'm good at. I'm not going to Sam always right. You can come pound and I really wanna pass this along to people at what you can come pounded mistake by making another mistake and selling them wrong. Tony, thanks, the bet you by the way. I don't even know. Made it up so we didn't have to. Today there's a there is a positive catalyst potentially nineteen days. Now in this midterm election, which we don't talk about, we don't want to go down to the Republicans can hold serve, I think the market. What is it that it's early yet. Yeah, extraordinarily put now, I don't know the probability of that happening, but if it were to happen, I'd get a knee jerk to the. Yeah, I don't know what's going to happen the election. I mean, I'm going to vote only get one vote. I don't live in Illinois, but with that said, if they do hold serve, I think you could see a knee-jerk. We actually upside today. Well, listen, I think you stay out of the way. I think that's the right thing to do at this point in time. Last week I thought we'd get a tradable rally. It lasted for two days, right? So now you have to stay. You have to get out of the way in this market until this washes out. Can I come up with catalysts? Absolutely. Can I disagree with what? What the house aveer people are taking Powell's comments shore, but the markets telling you stay out of the way for right now. And I think that's the only move make. We've got a market lashawn Dow DuPont. It is falling after hours. Let's go to Eric champion the newsroom, the details, Eric. That's right. Melissa, the stock is down over six percent right now. Dow DuPont reporting, four point, six billion dollars impairment charge related to goodwill and other assets in their agricultural reporting unit. And this comes at a bad time for the stock is down about fifteen percent over the past four weeks. So Dow DuPont right now down about six percent after hours back to you, Melissa. All right, Eric, thank you, Eric. Chemmy in the newsroom throw that on the heap of stuff. We didn't even get to materials and chemicals. I mean, we could go on and on and on. So back to what do you do today? I mean, look at the Russell two thousand that was supposed to be a safe haven. As we had all this turmoil around tariff stuff. It's down ten percent from its recent highs. Look at the q., those five stocks maga- and Facebook make up fifty percent of the weight. So here's the trade in that one. I think we see lower lows. If the market continues to go lower into those prince, I think you can take a shot on it because I think they're massively overdone at some point into what's likely to be decent news. They are not going to guide down for two thousand nineteen. That's not my saying we're just we're taking a shot. We'll know if you see Microsoft apple, Google Amazon into the earnings. We have a whole nother week. Okay, continue. This selloff good likelihood is that you're gonna see decent results in the bar. Because Mars low expectations aren't particularly high. At that point, we great it. Tell me wasn't here, but he was here forty, five minutes left on the show. Right out of here. So. Going up going up. Check out the outdoors action pave how soaring after earnings beat American Express, also higher. We'll do the latest reaction from Wall Street analysts plus what is wrong with Goldman Sachs? It is the question. Shareholders have been asking all year. We'll hear what the CEO said in our network that could answer that exact question and later stops get crushed. There's one unlikely safety trait emerging the market, and you will not believe what it is for your lifetime square New York City, and there's much more fast money right after this. Thanks for listening to this podcast will return after a short break. Are you prepared to navigate today's bond? Market's at MFS. We help advisors help their clients by assessing market risks and finding opportunities, learn more at dot com. Welcome back to fast money new Goldman Sachs, David Solomon sitting down with CNBC's Wilford frost moments ago in his first interview interviews, taking the CEO role Solomon touching on everything from the fed to market volatility and declines in the company's trading business. Were fundamental structural changes, including regulation that took certain parts of the business away. And so the overall wallet has shrunk very significantly and our market share actually in the last twelve months have been growing. We have fantastic people in that business. They do a very, very good job. We have to going forward articulate what this business where this business is going to go from here, not look back to ten years ago and talk about what it was before the financial crisis before the remake. Golden shares are down nearly twelve percent this year. So are there signs of return on? Is it really just a communication problem when it's more than a communica communication so much, they have to explain the Wall Street investors what the new goal Sachs will look at if that's a communication problem. But the problem is they don't have. They don't have the avenues to make money like they did when I was there forty something years ago. I mean, it's just a whole tiredly different firm, and that's fine that we have to go horse. Funds. It turns out, take the horse to the train, going to fee-based this all good things. I mean, they will probably at some point reduce headcount a bit, I would imagine. But you have to ask yourself, what's the proper valuation and in this environment? I would still suggest that one and a half times price to book value is about right and Goldman just reported. We talked about the other night, tangible book and his companies. One eighty seven, you slap a one and a half, multiple. You've got a two hundred seventy five dollar stock. I can do that math, but the market is saying differently. Now, Dan terms of price of buck. Can he north of to some word closer? And I'm not suggesting we get back to the peak in seven way to wherever that was, but em suggests you back to some level of normalcy for example, and Karen can speak to this again. They're not JP Morgan JP mortgage, probably closer to one point, nine times price to book issue and it should have it, bring the greed. Yeah, it should. Yeah, but the question is, okay, I hear you're saying that sounds reasonable. Get to more fee-based steady stream business. Goldman Sachs currently is a very, very lumpy multiple of under nine, right? So can even if province get squeezed, if they're able to make that transformation, does the multiple get high enough to make up for that? I don't know. Maybe I think the question is, but how long is that going to take? Right? And our vest is going to be patient enough to stick around. If you look the way the stocks trade in this environment and just talking purely on trading investors, don't look like they wanna stick around two hundred dollars big level for the stock. That's where it's bounced off of last couple of years. If it breaks through that, then that market is telling you in value. You're going to have a turnover, the investor base from those betting on kind of that big growth model to perhaps the valuable. Is this a short? No, I'm listen. I, it feels like it's going to be the first mega cap banks stock to actually reverse the entire move from the November two thousand and sixteen spike where they really took off and they had that period about performance. I don't know why people aren't willing to give DJ diesel a little more time. To kinda articulate his story a little bit. He did really nice job with wolf today, but you know, listen, this is an amazing franchise. I think the biggest risk and it goes back to the conversation we were having a block is, where are we in the cycle where you dipping your toes in the water? Because if the economy starts to turn this stocks going to be back at one hundred and fifty dollars in two years, it's just that simple, right? If it's trading one times book right now in every strategist we bring on every Bank analyst we bring on every investor that comes on his air is pounding the table to by Goldman Sachs in trades, like the crap the way it goes down, turn it hold on. Would you would you say then if the book value would go down from a one time book goes to one times book. It goes the guys one eighty seven, but don't forget this company had forty five billion dollars in sales. In two thousand seven. They got caught in the hat. It's getting back to Pekar and he's about twenty five bucks. Return on equity is just much lower to your point, and now they're working with much lower taxes that were the numbers just don't add up right. Now. So to me, it's gotta be all that other stuff. And the only reason why JP and Bank, how those valuations at one and a half times book or whatever. It's because their capital bases and how they make money. They do it very differently in a very different stale. Then Goldman and Morgan, her mom, what Goldman CEO, David Talamon said on closing Valentine head over to CNBC dot com. I'm Melissa Leo you're watching VC first and business worldwide. In the meantime, here's what else is coming on fast. The tech trade is cracking to top technician says, two names are about to break. He'll tell us what they are and why he so worried plus, I love. You might love the precious metal, but there could be a new safety trade in town driving the gold bugs wild and be we'll explain much more fast money after this. Welcome back to pass money. The tech wreck rages on with the sector now down seven percent in October alone are Bob Assani joins us from the NYSE with more on that, hey, Bob, low, Melissa, China worries. You've got a higher costs. You've got other margin pressures. You've got higher rates. It's all coming together to make it a very ugly month for tech investors. Take a look. The biggest damage secularize is in the semiconductor space. We're big names like Invidia and AMD. They're all down double digits as you can see here. But hardware me, it's not doing much better. Corning Fitbit and Segei down eight to eleven percent. Apple relatively unscathed down only about five percent software is only marginally better. So you got your oral goals, your Dobies into it down in the high single digits? No. A new issue develop today that may be important may not be Saudi Arabia's increasing isolation as Treasury Secretary, Steve Mnuchin pulled out of conference in Saudi Arabia. Tech investors have pointed out all throughout the day that the Saudis are very large investors in technology, including tech funds run by SoftBank, and there are concerns now that they may withdraw from such involvement in technology if they're 'isolation increases. Just another thing to worry about semiconductors all drooped on that news in the NASDAQ. One hundred was among the biggest index, the Kleiner's on the day now down seven percent for the month back to you, Melissa. All right. Thanks Bob, Bassani at the NYSE. So what do we do here? Pretty bad action it. Yeah, it's not great action. Again, people are just stepping away from it, and I think the Saudi Arabia angles kind of interesting. And going back to what Goldman Sachs does you think about it? If there aren't going to be a lot of venture capital investment, what's the exit play for venture capital? It's an IPO, it's banking. So if that starts to pull back and I've heard this from people in Silicon Valley that the concern, if you get less venture capital investment, there's less deals coming through the pipeline were spore stocks like Goldman Sachs, and there's the data points that we're just getting now. Now, real time like Taiwan, semi overnight, Taiwan semi had some issues there, saying demand for the chips. One fifth of their revenue is from apples on that, softening will. I think that the issue with semiconductors is that it's highly sick coal and we know that there was actually a lot of pull through from the first half of the year. Right? So this is one of the reasons why this group in particular did top out back in March, and we've seen the series of lower lows in lower highs in f- I look at the SMH which touched ninety five. I think at the Lowes last Thursday in the throes of the selloff it's at ninety six and a half right now that wasn't such a heck of a bounce. And so I'll just make one other point. You know, Invidia is the sentiment leader in that space. That stocks started the year just below two hundred. It got to just below three hundred a few months ago, and now it's down seventeen percent in a straight line in a couple of weeks. So if you start losing sentiment leaders like that, that's when you really want to keep an eye on, then this this space is this toast as cracks margin this tech trade. Our next guest says, there are a number of stocks that could be about. Out to break Robert slime refunds, global visors over the plasma two names to sell and one to by rob. What are you looking at route throwing smooth. So I think we really want to step back and think about the market cycle. When I think of market cycles, they with the low we had in two thousand sixteen, it's very consistent with a four year cycle, oh, and those go all the way back in time. So as we start to see this leadership fraying in various areas of the market, Dan was just talking about the semi conductor starting to peak out in the beginning of the year tech has really been the one area that's held up really, really. Well. We've got these big trends pretty much in place and still right on the line. They're just trying to hold in. But what's critical, I think is really important here is as relative performance is beginning to to wane a little bit. In fact, just recently we have this relative strength just starting to make a new multi week low. So you wanna keep a really close eye on that. There's a lot of positioning here. There's a lot of crowded trades and a lot of the software nineteen aims, but you are seeing fraying. So we look at a couple of names already had quite a bit of damage, and I think probably setting up for a trading. Bounce, but I think you wanna sell into that strengthen the reason for that is when we look at these very long term trends, say on Facebook, you, these things are breaking raking these upturns. That's that's a twenty percent decline right in. Whoops, that's not working out too. Well, that's a twenty percent. One more time that's a twenty percent decline where we had the break and now it's down. Another thirty percents of these are trend breaks in these stocks. And when we look at the relative performance, it's already taken out that low that we had the beginning of two thousand eighteen. So I think the key point here is that we're starting to see a lot more fraying and some of the former leaders and the ones that have broken down, you strengthen these names, you want to be cutting back again. If we look at Micron, another name you uptrend, but these trends are beginning to break on the stock, and I think you want to be using strength the markets, very good at discounting where we're getting that fraying leadership and here again, that relative performance is already taking out the lows. You had beginning of the end of two thousand eighteen. So what do you do? I think the comet has been continues to be. You want to be diverse, diversifying portfolios away from that concentrated leadership. You don't have to sell everything. We want to be diversifying away to some areas that haven't participated during the market cycle through two thousand sixteen. Now it's a little bit about forgotten name, but Walgreen boots really. Hasn't done anything for most of this market cycle. It's been very week that relative strength actually is starting to turn. And when we look at the price again, we've had almost a two year bear market and what I think is terrific about this. It's come back in and this massive base. So as diversifier similar to what we saw with a name like Disney, you have these stocks that have been doing nothing for two years that are now starting to emerge. That's where you want to put new capital. All right, rob come on over. The opening hearings. It's both thing. I mean, just someone get to established. We no longer vote on travelers that and I know, but I'm just. Pass free pats were fun. You always say no, anyhow guy. I would've said no, but this kid. Okay. So the one sought they recommended to buy was Walgreen boots alliance overall, look terrible. I wouldn't say that. I think there's a lot of names where we could have gone back in time and look at the software names Dobie CRM some of the mid cap software names. They've been big, big leaders. You could've said they were stretched the last two years now they don't like new timely buys me. But as you work through the various industry groups, you see the semi's rolling over many of these have come down a long way Applied Materials broke at the beginning of eighteen, and it's really down to levels where I think you've gotta be actually careful on the short side. I don't think they're buys, but they've come down so far. You can get a short squeeze very quickly. So I wouldn't say the entire sector looks terrible, but I think incrementally we're seeing fraying and you want to be diversifying away. You brought up a Micron char Micron based. They started the year. It's a forty dollar stock late January early February. We've round trip to now here we are again. Is there any chance. We put in somewhat of a double pod them here in MU and gives us an African who went from about sixty down to forty and change, maybe forty forty, fifty bucks and is very oversold on a short-term. Basically, you come into earnings. There's a lot of negativity. You get bounces on these stocks, but I think it's part of a bigger cyclical peak. When we think about the broader market cycle, you know, semi's are part of that sort of economically sensitive area. And I think these are bigger tops are developing when we get into two thousand nineteen. I think we want to be looking more value names names at haven't been leading the market for the last two years. So I want to go back to Facebook because I look at the chart to my. I one fifty seems like really good support percent. So are you saying to sell to sell the rallies? And it's going to break through one fifty is it will? Okay. I think when you see these big gaps in gross stocks that have been held by so many people generally takes a minimum of one to two quarters before any of the growth managers are going to come back and buy that stock. It's going to have to be it's going to have to put up very strong earnings for the guys at chase and make trends to come back into the name. So I'd stay on the sidelines. I think it's dead. It's been a rough you weeks for investors in general, rob. So when you take a look at the market action, is there anything that causes you to say that there has been damage done technically to any parts of the market because of the volatility in the past few weeks? Yes. There's definitely been damage. We've got all kinds of stocks. All kinds of groups that have rallied back there. Two thousand eighteen highs. Industrials were good example of that. I think in the very short term, we want to be just a little cautious getting overly negative. The short-term data's getting very oversold. Current levels are down seven percent or so. And I think we're gonna put in a trading bounce. We're coming into earnings. I think you'd get a bit of a recovery game. I think the bigger risk is as you move into two thousand nineteen. Okay, rob, thank you. You prob slammer of fun strat. How are you feeling about Facebook these days? Karen, a little nervous. But yeah, we'll see. I think it's a Tober thirty one. I think they're going to report and the bars been lowered quite a bit. I've a little nervous, but I am definitely hanging on until earnings. All right, still ahead. It was a sea of red on Wall Street today with all the major indices. Slammed once again. So how do you deal with the bottom is in guy, here's got three things to watch plus, check out, pay pal story in the after our session. We'll tell you what is in the stock and bring you instant reaction from Wall Street analysts when fast money return. But. Welcome back to pass money, pay pow soaring after hours, following its earnings report stock is up seven and a half percent Deidra boasts still across the border in Toronto. She'll give us the update the details on pay pal Deirdra. Hey, Melissa while the dog is surging out in the after hours after the company released its fiscal twenty nineteen guidance analysts pleased with what they're seeing, projected twenty nineteen revenue growth of approximately seventeen percent and non gap EPS growth of twenty percent forecast. Now, the street was also looking for more signs that pay pal is monetize ING. Van mo- many of them saying that this is where the long-term growth is going to come from early this year. Pay pal CFO John Rainey said that monetization would happen over years, not quarters, but on the call just now CO. Dan showman saying that monetization is actually reaching a tipping point heavily. Well, it is too early. Our monetization efforts appear to be reaching a tipping point. Twenty four percent of then MO users have now participated in a monetize -able action. This is up from seventeen percent one quarter ago and thirteen percent in may of this year. Now at the same time, though, Melissa pay pal, take rate continues to decline. This is the average revenue that pay pal makes from each transaction. The company attributing this decline much to pita Pete. That's right there and saying that it would continue over the next three quarters. So guys, well, then MO is starting to make money. It's also costing the company more money in terms of its take great back to you. All right, thank you. You're Bosa in Toronto for us. Dan, you've been active in this name was through things that we were to focus on on this call and you're kinda hit him, but it was two thousand nineteen guidance. It came a little better than consensus. That's fantastic. The operating margins also very important. And I think that monetization piece about Venema which is that peer to peer, which is this thing that the kids are using supposedly these days that's really important because that will help profitability going forward. And ultimately it will assist that take rate is the third point is about active users. All right. So the game, fifteen percent year over year. That's a good number. That's where they hit this quarter. So you want to see them continue. You to grow active users. You put it all together. You have a stock relative to its expected growth that change pretty treat cheap at about twenty five. This group overall, though the payments space has had a rough rough month even though it's done nicely for the year. So what do we do with them? I think you could say with pay pal was ninety three dollars a month and a half ago, traded on seventy five. And in terms of the take, yeah, it's down from the second quarter in the second quarter. It was two point, seven, seven percent, and it is the Lord's two point five eight this quarter, but the street was expecting worse. The nets what actually came in better than expectations of two point five to what's the point you could see knee-jerk bounce on the back of this without question valuation isn't ridiculous and probably given what American Express said on the back end. Maybe there is some upside for these names. All right. Let's stick with earnings here. Proctor and gamble. Also set to report before the bell tomorrow. The options market is implying some pretty interesting move. So damn, would you see today? Yeah. So this one is about two dollars and fifty cents in either direction. One of the things that's really it's about Proctor's obviously pretty underperformed this market. I think Staples are one of the. Worst acting groups in the s&p five hundred. But this stock going to average over the last four quarters has moved about free percent in line with that implied move. So to me, this is a really interesting one. The stocks down thirteen percent from its fifty two week is it's up thirteen percent from its fifty two week lows in may look at that uptrend that had just broke last month here. It seems to me despite that three and a half percent dividend yield, which is not maybe so exciting anymore with the ten year yield above three percent. If you have disappointing results and guidance, this stocks going lower trading at about eighteen times above a market multiple for kind of low single digits growth. Not particularly interesting. All right. For more options action, check out the full show. That's tomorrow by thirty PM eastern time. Still ahead. It was a wild day for the markets. Dow dropping as much as four hundred seventy points at the Lowes. So with all these crazy market swings, how do you know when it's safe to buy guy has three simple rules for spotting a bottom bracket all down expert. Finding a bottom. Welcome back to the toper sell off raging on what stocks now down five percent despite a few single day rally. So how do you know in the bottom is really in for that answer? We go to guide dummy first. Second, we like to call the more, you know, guy. Go on. I'm sorry. I got the MU the music's playing, you know, I wouldn't. I hear music. I just wanted dance Mel. Have you know sometimes you're able to spot about them and by the way I point this out notice science, it's they didn't have the apostrophe. So I helped crack crew and Englewood cliffs, but in the apostrophe and but I digress. How is it? How do you know what's the signs for to be safe to buy? Again, number one, unusual volume. What does that mean? Well, if a normal volume, let's say is a billion shares throwing out a number and for whatever reason on a big down, say day, you see a billion and a half or two that's unusual volume in my world that might be capitulation. You see it individual names. You could see it in the broader market number two, fear index. I don't like that, but it's catchy. The vix hold steady. What does that mean? Tony Dwyer earlier, sort of alluded to this. If you see a big down day and the vix is an up in the vix is actually lower. Maybe that's telling you the worst is over way. Wait for that day. You haven't seen it yet and bearish sentiment is peaking. Well for this you need a chart. Slided are all hit comes our chart. Look at this investors intelligence percentage of bowls right now fifty one point, nine percent. If you were to see this, go down to, let's say, here and bullish numbers get down to about thirty five percent and everybody's now on the other side of the boat. Maybe it's safe to get back in back to you with it. I don't even want to be. Go ahead, Karen, I'm here for you. Let's say it plays out exactly. As you said, all of those things lineup, the bottom came and went and you missed it. Can you jump in the next day? What do you do this human one and you missed it on that day, but it's day. So maybe you did miss it that they quite frankly, nobody. Unless you name is Dan Nathan, Brian Kelly is going to catch it that day. However, maybe it's this giving you the all clear sign and maybe this ten year bull market is an over yet. Maybe that was the pause for the next leg higher. So made me miss it for the day, but you're not looking for it for the day. You're looking forward for the month or maybe the next three to six months. Thank you guy for the more you now and a spelling lesson coming up, syntax syntax grammar. Amid all the reasons. Volatility of surprising asset has emerged somewhat of a safe haven. Bake coin bitcoin finally becoming digital gold. Plus, let's get a sneak peek into the mad money studio with our primer. Cam tonight, Jim is breaking down the socks. And you should be buying during the sell selloff. That's all the top of the hour. We're live with the NASDAQ market site in Times Square much more fast, still ahead. Well, money gone are the days of wild, wild swings. Bitcoin is apparently mellowed out the crypto currency, plotting steadily along all along all the market chaos. So does this mean bitcoin is now finally digital gold dumb. Choose breaking down for us back in the newsroom, hey down. We'll Melissa if all the recent volatility in the stock and bond markets has your head spinning just head over to one of the least volatile trades over the course of the last month or maybe not lease, but it's still something interesting. It's bitcoin that you wouldn't have thought that right well, over the course of the last month, you've seen bitcoin trade in a range of roughly between sixty two hundred dollars and sixty eight hundred dollars with a few intraday flashes above or below that range. Now that is pretty tight. Considering the history of the crypto currency with regards to its own volatility profile. It's especially tight when you compare it with the SNP, perhaps maybe the NASDAQ the SNP's actually tumbled around four percent in the last month commodities like oil which is fallen in that time. While bitcoin has remained stable as well. It's moved more than bitcoin along with currencies, like our own dollar with the greenback swing and higher than the cryptocurrency has. And of course, you know, all about that talk about bitcoin being digital gold while the yellow metal has actually rallied pretty significantly well, bitcoin remained unchanged. Of course, these comparisons are like apples and oranges here, but it does pose an interesting question for investors and traders as trading relationships become some assets between them get tighter, could crypto currencies be a viable alternative to traditionally traded securities or have enough traders been burned trying to manage crypto market risk with some establish financial heavyweights like fidelity now, waiting into the institutional trading custody aspects of bitcoin that debate over the viability of trip though, as tradable end or investable asset classes. Again, starting to heat up Melissa back over to you guys. All right down banks, Dom chew in the newsroom well for more on what this lack of Allah you could mean for bitcoin. Let's bring in Genesis trading Genesis capital CEO, Michael Moro on you report shows. Launching their crypto lending service in March. Genesis has loaned over five hundred and fifty million dollars in crypto currencies and bitcoin still reigns supreme, Michael great to have you back. Welcome back to the show. So in terms of first zask of bitcoin becoming digital gold, I guess, two aspects store value also a hedge and your portfolio. Do you? Do you see that happening here? I think one of the positive characteristics that bitcoin is always had is its performances on correlated asset. So that as we saw in the charges before that bitcoin performs in a way that it really does really perform along with the stock market or the echo, the fixed income market or anything like that. And so it sort of behaves on its own. I think the encore that nature certainly interesting whether bitcoin is ultimately a form of digital gold. I think that question is still a very much an open question, do that investors believe it and use it as a cases sort of by it, but it needs to prove itself to be digital gold. So I would actually consider it to be more of a option to become digital gold as opposed to a form of digital gold today. So by call on the lending side, you're lending. Bitcoin. You're lending out a theory who's using that. Are people using it to short bitcoin, and then you came up with a big report today. Is there anything from the lending sign that can tell you, hey, the shortens over. We may have bottomed here. So of the one hundred and thirty million dollars of loans that are active today or as of September. Thirtieth only about a third was used for hedging or shorting purposes. So we have two thirds of the portfolio that is not used for anything kind of relate to shorting. So that's the one point. Nine sixty percent of the portfolio is still bitcoin of the loan portfolio. However, over ninety percent of that is not used for shorting that's us for working capital or for arbitrage purposes. That's one number two. We've seen sort of the price decrease in ethereal if they're currently only accounts for four percent of the loan book overall. So you could argue that shorting is not the cause for bitcoin. Any theorems sort of price, a Klein that we've seen, and it's just natural holders that are actually selling the posted naked short guys who are trying to play the downside. So if it's not the cause though, then we. I mean, do you feel like you're confident in that the selling is is over because what have you seen in terms of your your lending that would indicate that maybe the amount that's being borrowed, too short if they're him specifically has waned. So what we saw is back in July theorem still accounted for about twenty eight percent of the loan book. We saw declined to about twenty five percents in August, and then from from twenty-five in August, we're down four in September, so so we saw dramatic shift in sort of the porn portfolio composition between all his in September, and you can read the tea leaves to figure out what that ultimately implies in terms of a bottom for at the area. Same thing for bitcoin as the prices sort of approached this magical, six thousand fifty, nine hundred support level. We see the short guys closing out their positions and buying back in and closing out their short positions. So we see that on the lending side which actually correlates to some of the price performance that you're seeing on the spot side. Let me ask you more about the lending book that isn't shorting. Why would someone. Short bitcoin for a working capital position or do they operate their business entirely in bitcoin? I mean, it would seem like a very risky kind of. I don't know liability to take on chore. I'll give you one example. So once the CME and the futures launched market makers needed the access to the cash market, they'd be able to hedge the price action that they're actually taking on the future side. So if you're not long as a futures market maker and you can go nuts short on the cash side it, which is a much more liquid market frankly than the futures market. And so we've actually lent bitcoin out to some of those futures market makers, people that have never played in the crypto space before and actually give access that a cash markets that can efficiently hedge their positions. That would be an example of a non shorting working capital type of won't last quick question. Before you go. I'm not gonna ask you per bitcoin price prediction because you've already said you're not going to give it to you think we've seen the lows for the year. I the last time I was on the show. I said that we were more likely to see ten thousand in bitcoin then five thousand. Okay. For so far, I'm not wrong. You sticking by still sticking by that prediction because of what we're kind of seeing in the absence. On the loan side to have that confidence that I don't think we'll see five k. flat ten thousand this year, ten thousand. I don't know. Timing wise is probably different question Michael. Thank you. Genesis capital. So what do you think of the action? So phone while it's been boring right for for dialects, volatility and use of the bitcoin volatility. It's been really boring. What I can say from my seat, we have seen institutional buyers coming into this market, Yale, Harvard MIT, all of them that's been announced. There are other institutional buyers coming up. Next final train. Time for the vinyl trade, Dan, Nathan vk would say, Xalapa think you sell it. You sell it again and everybody, Brian, Kelly. I liked that. So is interesting today. Gold was up even though the dollar was up. I know millennials don't like the dollar, but you might wanna check out both carries GM LP Goeller MLP. Everyone thinks the dividend will be cut, which it likely will. But I think he'll be far less than people. You know, you see us every night on TV don't you? But there. I'm the scenes that are far more important than we are. One of those people max Myers. Our executive producer there is on the TV. Show with fast money. He's going on as you know, to be senior executive producer of squawk box, we wish him nothing, but the very best area we listen. Early Viacom that doesn't rushed here on fast you back here tomorrow and five for more meantime, that money with Jim Cramer starts right now. The fast money podcast is sponsored by MFS investment management.

Melissa Leo Dan Goldman Sachs Karen Facebook US Tony Dwyer United rentals CEO apple Netflix Brian Kelly New York City SNP Saudi Arabia Fed technician
Fast Money 06/19/19

CNBC's Fast Money

45:24 min | 1 year ago

Fast Money 06/19/19

"Technology today has never been smarter but smart only matters when you put it to good use. Together, we can build a smarter future for all of us. Let's put smart to work. Find out how at IBM dot com slash smart. That's when he starts right now live from the NASDAQ market site. Overlooking New York City's Times Square. I'm Melissa Lear traders on the desk for Tim Seymour. Karen vitamin C Grasso and guide Dom tonight. Yes would be five hundred is less than one percent away from record highs in the top technician. So there's one beaten down group of stock that your best bet to catch this rally. We start off with the Federal Reserve chairman Drome Powell sitting on the sidelines for now with no rate cut. Let's get straight to our senior economics reporter Steve Lieberman who was at that news conference today. Steve, thanks very much to the Federal Reserve left interest rates unchanged as you know, at that you'd meet, but made a major change in the outlook suggesting cut rates in the months ahead. Maybe even at next month's meeting in July the big changes the ped-, effectively ended the policy of patience, just as it was. Born actually, where it signal that wouldn't do anything for several months that we're out of the policy statement. Instead, it's now emphasizing uncertainties in the economic gals against that it would act as appropriate to sustain the economic expansion. Now, remember back. In march. No fed official forecast. A rate cut in two thousand hundred now eight or on board with rate cuts at least one this year and seven of those forecast to cuts and fed chair, Jay Powell sang, even those who aren't forecast and cuts. Well, they're leaning that way. The number of those who wrote down a flat rate pass agree that the case for additional accommodation has strengthened since our main meeting uncertainty surrounding the baseline outlook, clearly risen since our last meeting. It's important, however, that monetary policy not overreact to any individual data point, or short-term swing in sentiment doing so would risk and even more uncertainty to the outlook. Okay. So what's it gonna take for the feds actually kind of thinking you guys be able to care about? Well, Powell made clear, the committee wants to see more clarity and just how weak the economy is, and he wants to know how trade talks with China, are going to work out. So if the concerns about the economy approved right in the data, it seems clear, the fed is gonna respond that could happen as soon as you lie Melissa pointing all week to these events that she twenty meeting was she the jobs report coming in early July from June. And then the GDP report and the other data during the month of July that, what's gonna take the seal the deal, I think what you mentioned, Stephen terms of how many votes were in favor of a cut this time versus the last, meaning that change is pretty remarkable in such a short amount of time. And we are having a great discussion with Fred Michigan on power lunch, as soon as the decision came out, and he said, it's very important that the fed doesn't follow the markets. But that's what seems at least from my standpoint for many other markets. Participants standpoint has been going on since you know late last year or so. Oh, I'm wondering what your take on that is in terms of where where you think the fed is in relationship to the markets? Well, the first thing to your first point Shakespeare wrote, turnabout is fed play. That's exactly what he said, and, and it happens a not so often, but it does happen. So that's the one thing, the, the other is sharp turnabout. I rarely seen it. I have to say in about twenty years of covering the federal here. But there's like this big. We weren't cutting. And now we're cutting up the there's this very weird inter process going on Melissa, where essentially the market prices to what the fed thinks it's going to do. And the fed prices to what the market thinks it wants to do. So it's like a it's like a circle there, and I think the market may have this one, right? But it's gotta show up in the data. The fed is kind of, like, hey, the markets got some information. I'm not so unhulled that I'm not I'm going to ignore what the market saying that doesn't mean I'm going to act on it. But it did really. Make a change in the outlook to kind of meet the market halfway. And we'll see the data confirm it now counts got a question. Yeah. So in the past, it seemed to be the fed really didn't care so much what the market did. And so I'm wondering now that you say the fed seems to, you know, have to get some signal from the market. How can you differentiate that from what they're getting from the Trump administration, which, I know they try to ignore and have their, you know, their independence, the main thing they like to talk about. How does that fit together? They can't ignore it carrots. It's, it's the criticism is with ring. It's unprecedented. It's unusual. I think it's difference there backbone a little bit. They wouldn't mind proving the administration wrong. They what's so weird about a carrot is how do you prove the administration wrong? You prove them right about their growth outlook, if you get the better growth, then the Fed's going to have been. Right. What does that past perfect tense, something like that going to have been right about not cutting rates, or at least even raising rates in December? Ever. So, and look, there's at least some chance that happens. The economy is supposed to weaken. They have this two point one percent GDP growth in there. And I think when if you start pointing towards a weaker than two percent number it with a one handle on it, that's when you're going to be able to say, you know what for sure the fed is cutting hair. Again, the markets are part of the process. The fed does not want to leave the market in the lurch and I've major adjustments but it's not going to do it if you're pointing towards strength. And by the way, there's one other interesting aspect here. You guys may want to talk about which is does, does the fed cut if the market is at or above all-time highs. It's so weird. Area. The question that came up in our discussion this afternoon. Steve, thank you so much. Leeson Archie economics correspondent, so with the fed on the sidelines for now at least socks are just this much away from all-time highs ten year yield sinking your twenty nineteen lows. What do you do guy? Well, it's pretty amazing. Right. I mean I thought I mean, it's probably the only one that thought that the fed had a really say, everything, right had to be more dovish than they possibly could be in the market. Otherwise, the market was softened a meaningful way and here we are. Thanks steve. Thought we'd go higher and we're higher today. At least for a day, it's very impressive price action. We're the at all time highs. What do you do now? Well, you try to put your dog on the side again. I think the fed is making mistake. It doesn't matter what I think try to focus on things that have been working say, again despite my views on a broader market Healthcare's been trading. Well, I think you stay there and stay with the mining sector as well. It absolutely concerns me though, and I'll say it again for the fifth day in a row that utilities continue to make all time highs, there's something missed a low rates kind of that's clearly what it is. But I mean, you can't the market driven by Utah. Ability. Attic and real estate, but I think the fed should keep this in their back pocket. I think they have this for the marketplace at who's going to short the market, knowing that the fed is gonna cut, so now we're at one hundred percent chance. But if there's no cut in July, then you still have the same ability to say, well, there's going to be one next time they're not raising rates. I think that's the important thing there dovish closely monitor means we, we could very well cut and that I think that was the most important part of the language if you look at the dot plot so we basically eight wanted nothing seven want possibly fifty basis points. So you have a dynamic here where the market does get everything. They wanted guy but I would agree. The market is priced in so much. Good news here. Here's the one part of the asset classes that we see rallies and James, right? Right. Exactly. Yeah. And to be clear. I don't think rate cuts are good news. I, I wish the market was responding really to the fundamentals and the top down, not what seemingly is the bottom up and what I mean by that is for equity valuations, lower rates are just mechanically. Good. It means your input costs you discount rate. Whatever you do your valuation on changes. The valuation of stocks, they're worth more in this environment to belabor this point. But here's something that an asset class it actually has been rallying. And it's kind of good news who could have high yield look at credit spreads. High yield is this backup to where, if you own the J K, H Y, you're back to where we had the blow off top in Jan of two thousand eighteen. So, in other words, you've seen credit recover all the way back as if even if it means that the fed is basically giving everybody a lifeline. That is a sign that things have healed somewhat even though I'm not sure they have is that dissonance though, when you see Jan, K, H Y, do so well, and you've got the tenure yield at twenty nine thousand nine Lowes, we've got a German Boone's tenure yields a negative quarter percent. Yes. And no, extent that junk trades, the spread over out over the baseline is right? Whatever treasury, so we're actually. Yes. I actually short some H Y G. I think the fed really got it right today because I feel like why move when you're going to get a lot lot lot more data by by July thirty and Steve. Touched on a lot of it. Plus, all the things that, you know, the G twenty and whether we have any kind of trade deal, also will really start to see earnings and to me, that's always the most important thing. This is a lot of noise around the most important thing, which is earnings, and what are the outlooks for the second half of the year. I think that to me is the most scary part. I you know, this is as worried as I've been I feel like we're say if a hundred percent priced in that we're is the side. If the economy does better than he has a Powell has a little bit of a of a safeguards. They doesn't have the race. So you have the economy doing better earnings doing better. So you still going to get the market rally if the Konami does it does worse than he can always cut. If trade a worse scenario where this market goes down. That makes no sense. There's one offs. Martin there's one offs. But can you put can you put any type of rationality on the bounce that we've seen from twenty seven to two in the SNP to now it's positioning people were so negative on the lows. Right. And now they had a catch up. Where where to position the other way volumes light inflation. There's no sign of inflation. The Phillips curve is dead. So you have global inflation nonexistent, Goldilocks is what you're saying. Man, I asked this question, and that is the last time we were at these levels on the S and P five hundred. How would you characterize the risk environment then versus now guy interesting? I mean, I don't think I think the risk exactly the same. The only thing that's changed. The commentary out of the Federal Reserve to me, this, pardon me closer. I think it's I'll push back on that. But okay, we can have we can agree to disagree. I think the only thing this changes affect commentary. So when I look at the quote unquote, smart money, and I, I would say that retail and folks that are long only in the wealth management, community and a big chunk if not the major chunk of the global asset base has actually been relatively Bush, but if you look at smart money, if you look at long short hedge funds, if you look at guys who are paid to basically assess risk, I think they've been badly short, maybe not net short, but they've certainly not been long. And if you look at one positioning of long short hedge funds word five year. We're five year lows in terms of net long position which tells me I actually think this could go a little higher. All right. So does the rally really need a rate cut and will we see one as soon as July? Let's bring in Tony Dwyer chief market strategist, a Canaccord Genuity Tony, great to have you with us. Should tell the audience remind them that your price target for the end of the year is twenty nine fifty. Yeah. Price target on valuation at this point in the year is kinda stupid, so we're focused on our thirty three fifty target for next year. And I think that might be a little bit too low as well. What happens between now and the end of next year to give us four hundred points to the upside inflation stays low. The fed gets easy to remember nine hundred ninety five analog it's playing out almost exactly from every angle that I can find it's almost exactly like that environment. So you don't go into a recession remembered that were up in different. I agree with most of the bears. Yes, the economy slowing it almost looks like it's going to go negative, that's the bull story. That's always been the bull story because it takes it takes rates down. And as long as you know, you're not going into recession that gives you upside and equities remember the average P E, multiple when cornflakes between one and three percent is nineteen times it was there for most to sixteen and seventeen. Could we Tony almost even a pad since? Recession and what I mean by that is, basically, if you look at the twos, ten spreads, and that which we often say have been these points where we've had the inversions and you follow this for the last thirty years, you actually see that we have done exactly what you're supposed to do at, at a recession even more than we did in Q one twenty sixteen. Whenever everyone thought we were getting, it's a great point. And this is kind of a something positive for everybody in the nineteen fifties, the market quadrupled, and depending on which index quadrupled or quintupled you had three recessions in the nineteen fifties inflation was around similar levels to today. Interest rates were around similar levels today. And you just had very brief recessions, we've had three almost recessions cycle. We had the European debt crisis, which caused a nineteen point six percent drop in the market. I'm sorry, folks. That's twenty percent to me. We're not. Then we had two thousand fifteen sixteen clearly, a global industrial crisis on energy price, and commodity claps. And then we headed nineteen point eight percent. Again, I will round that up to twenty. Sent in the fourth quarter of last year. And now the slowdown so we've had almost three recession like snares and the markets traded that way, we're not ten years into a market cycle, or five or six months into a market cycle. We had a twenty percent drop. So so Tony. If the economy does better, he doesn't cut and the market rallies if the economy does worse, he cuts. Is it Goldilocks? The same just asked me, do you see this Goldilocks, and I know you're a lot more conservative than I. So I'm actually gonna follow your opinion. With goldilocks. I don't think I don't think there, there's no world right now in my world where the economic data is going to get aggressively better. I mean, the whole bull story is that it gets worse. It's gonna get worse from here. What made the fed go from tightening on February? I ninety five to cutting in July just a few months later, a negative payroll report. I'd be blown away. If we don't get at some point either a negative revision to the recent one or a negative Steve's other point. And if they if the data comes up a little bit better than does your thirty three fifty go out the window because you had just preface this whole thing if it's always want the softening in the data. That's the play. I don't think it will get that high. But again, you have to go into a sustained recession, so I think it's really important Mel to talk about that for a second. How do you know if you're going into a recession or not people come on TV all the time and say that the treasury bond market is telling you, we're going into a recession year two to three on the tenure will Tim pointed out the rest of credits rip it. You got high yield debt Rippin you got the elk. Which is investment grade debt at a high? You know, you've got an economic problem when high yield the yield on high yield paper is spiking because nobody wants it and they're selling it at the same time treasury yields are going down. That's what creates the gap. What's happening today is it's winding a little bit because treasury yields are going down faster than high yields. So there's no areas of credit mortgage credit agency credit corporate credit that I can find that show up. We got a problem here and you want to get really scared. All right. Tony great to see you as always. Guy. What do you think is fascinating? The bull case is that things get worse. And Tony's right. I mean think how preposterous that is. I mean, it goes to show you that to me, everything is predicated on what central banks do not only here, but globally, there's a man is to that. But then last night, I'm flipping around. I'm watching President Trump talk about the greatest economy in the history of our Republic. So something's, there's something askew there. I mean, I think I know what it is. But it doesn't really matter. But you can't have in my opinion, even considering rate cuts in the greatest economy in history of the United States, it's cloud nine after a dopey source all time, high today, and now shares of oracle are skyrocketing after its earnings report the conference. Call is underway. We're bringing the latest headlines plus shares about that stock enough paying right is the company faces shareholders at its annual meeting today. What is wrong with this stop? He's got the details and later slack, those direct seven billion dollar company. Getting ready to make its public debut tomorrow. We'll tell you what is at risk for this unicorn, we are live from. In New York City, much more money right after this. Fidelity, you get value. You won't find anywhere else decisions they're clear costs. They're lower than ever and account fees. There's zero so you can invest with zero trade offs. Open an account today at fidelity dot com slash trading zero account minimums in zero counties, apply to retail brokerage accounts, only expenses, charged by investments, such as funds managed accounts, NHTSA's commissions, interest, charges or other expenses for transactions may still apply. See fidelity dot com slash commissions for details. Padilla brokers services, LLC member. NYSE SIPC. Welcome back. We've got a news alert on slack ahead of its direct listing tomorrow. Let's get to Leslie picker at the new York Stock Exchange for the details less. Hey Melissa, the new York Stock Exchange revealing a reference price for slack will begin trading of twenty six dollars per share a direct listing of course, is not an IPO because it does not raise capital for the company so that twenty six dollars per share. Price is not the price by which they will be offering shares to investors. It's rather just a psychological, benchmark so that when the market making begins tomorrow, when buyers and sellers are matched right here on the floor of the new York Stock Exchange by the designated market maker, then they have a psychological benchmark by which to start that process. So twenty six dollars a share represents about double where they last raised a private fundraising in August twenty eighteen at about eleven ninety one per share. So quite a big jump up for those investors who participated in their series h round. Melissa. What are the com- slack, Leslie? A lot will they didn't have a roadshow direct listening. So they only had that investor day. Investors are looking at a bunch of staffs companies service companies workday is one dropbox is actually one because the potential total addressable market for slack could be this opportunity to be kind of an app for all needs of an enterprise. So there were looking at various companies, that participate in that kind of subscription model that can potentially move beyond messaging, which is what slack is currently known for to provide various services for the enterprise. Also people are looking at pager duty and zoom video communications, which are two recent IPO, which of course, are more than double there. What they IPO price at this point also subscription revenues with enterprise, as the target customer, right, Leslie. Thank you, Leslie picker, the new York Stock Exchange. Let's trade, this could this be the next uniform direct listening puts a little bit of a different spin on this and she mentioned the calm but in turn. Of how it trades tomorrow. Maybe a better com could be spot. I mean, I don't know structure here that this is an IPO that's not an IPO is very interesting. And this is a company that's Representative of the fire hose of money that's coming into the BBC community and how people are doing it very differently. We talked about lifting Uber. It's a company that's got almost nine hundred million dollars on its balance sheet right now. If you look at the perspectives, and it's burning a tenth of that year so they can do nothing for ten years at the current rate and actually still have a balance sheet. That's that surviving. I'm not to speak about the competitive threats from people like Microsoft or whatnot. But that makes this an interesting toy for Markovits look very different balance sheets. Yeah, I mean, in terms of direct listing Karen, you're usually you get underwriter support writing. So that that's going to be one sort of factor in how trades just wondering since, you know, they're doing it this way, which more efficient significantly cheaper, right? Do they maybe not get the coverage? I don't know. I think it's an interesting sort of egalitarian structure right to wind up buyers. And sellers this way, I I'm wondering, you know what does it mean? For valuation for Facebook for, you know, give us any sense of, of what's a plus not only do you not have the support. You don't have the lockup saying have people who want to sell stock converting be class years to eight clash shares, so you don't have the lockup you get a little more pressure on it. But I think you get a true picture of what the real market is versus having a normal processes more efficient reference port at twenty six and then we could gauge it from their second to riveted. Farther along to rid of this. By the way. I just wanted to know that we've been bullish on the exchanges now for a long time. Nasdaq has had a tremendous move, but look at where it's trading. Now, it's basically ninety six and a half, same level. We top that September two thousand eighteen I think he's starting to take profits in some of these aims year-over-year volumes have been up. Everything is great. But they've run too far too fast. Number one. Number two, egalitarian is not a great haiku word. So you could say it's -tarian. Second great. I told you I work area, not that's also works. Anyway, I'm Melissa Leo. You're watching fast, money and CNBC versus BusinessWorld worldwide. Here's what else is coming up on fast. I'm sorry, being. Slack is taking off with a direct listing tomorrow. But if history is any indication it might be dangerous sign for investors. We'd cut those details plus stocks are soaring back to all time highs with tech leading the way. And top technician says there's one beaten down group that can help you catch the rally. He'll be here to explain this much more fast money right after this. Brought to you by fidelity, where decisions are clear and costs are lower than ever. Learn more about our industry leading value and open an account today at fidelity dot com slash trading. Fidelity brokerage services, LLC member. NYSE SIPC. Welcome back to fast money while way CEO rendering Fe speaking to our very own Deirdre Bosa from the company's campus in Shenzhen China where he told her he isn't worried about a potential thirty billion dollar revenue miss after the White House is ban on the company. If billion is impacted we can reach around one hundred billion US dollars. The financial statement I saw that. We're still growing at around twenty percent. We expect to see some slowing. We haven't seen that yet. What we are making judgments in journal, Joel wash. So he project there might be a slowdown but still yesterday's report. I didn't see any slowdown. And we don't know what will be the growth, the end of the year. But we believe the thirty billion US dollars will be a very small thing. We can withstand that you're not a public company, we don't attach importance to high numbers refocus on the performance, the quality of the performance. This is a very different message than what we're hearing on the US side from the chip makers the supplier. So is always downplaying this fan. And what does the say about the trade war between the US and China Tim? Well, I, I don't expect them to say anything else, and yet, we listen to broadcom, and we've listened to a bunch of companies say that this is a big deal. US companies are scrambling component wise. Guys playing into while as a as an end buyer. So the interesting thing is has always fortunes, have fared worse than we've gotten headlines on where they are less profitable significantly on the top line. Also, you've actually seen CSI in Chinese stocks local exchanges have actually started rally. So there is some sense that this is an issue that, that ultimately is coming to ahead of some kind. But I don't think that, that interview tells me that things are, as you know, I don't take that at face value. Right. But you take the Shanghai's the CSI moving higher as markets are telling us something very different and markets are telling us progress. Yeah. For sure. Harrison trade. Karen, I couldn't believe a word of that. I mean I just found it so absurd on so many levels, if you listen to the whole interview to their other other portions, the Univer where you're like, really? He said, no, we don't talk to government. Why would we talk to government? Why are US companies talking to the Trump administration all the time we don't have time to do that? It's, it's hard for me to fathom that the government doesn't call them or they don't call the government at any point in time as much as the ones here. I don't know. Sorry, go. That's why you can't believe it. I mean, the whole thing is out the window to Tim's point, when you start to see these exchanges. And the stocks that are China US trade reliant start to rally it's telling you something, and that's again, the positioning and it's beta position because whatever was positioned in the market here is two or three times, X what it is in the trade related stocks. So you get up a larger ramp a larger bullish tailwind whenever you see things get more positive, right? Well, our next guest says despite all the trade, fears tech rally is brewing and chips. Stocks are going to lead the way higher. Let's go off the charts with Mark Newton of Newton advisors Mark when you're looking at. I'm muslim. So. Yeah, I think the demise in tech is very much premature, and if anything I'm betting on a rebound in this group in the next couple of months. It comes down to a trinity of really the three things. So first of all near term, oversold conditions combined with the, the recent stability in the sector along with the ongoing bear sentiment. You take a look at the equal way techy Tf. Right. This is the Invesco equal weight ETF for technology versus the broader market when I take a look at this. We've seen the ongoing trend this is not so shown any signs of deterioration. So we know about the anti trust regulation against tech while way of this being potentially hurting the tech sector. This is not really her technology. Oh, that substantially. We've seen this decline of ten to twenty percent and many tech stocks, but technology wrote of speaking is still very much in good shape the nets will look at the semiconductors. We heard Trump's reelection campaign getting kicked off about meeting with president. She what happened immediately. We see the SOX jumped to the highest level. We've seen in the last five days this sector. Has gotten beaten up very badly down really twelve percent from its highs about two hundred points in the us o x ever. It's up one hundred and fifty percent in just the last couple years since the two thousand sixteen lows. So I'm looking at this break of the downtrend since late, April, we rallied up into early June and pull back. And now we're starting to make another move. My thinking is we get up to right near fifteen hundred. It'd be about a seven percent gain in the socks really over the next two to three months. So I'm looking at the timeframe specifically in the middle part of August up to September. These are the ways I play it Micron Technology and you stock last year peaked out right around sixty four dollars in late maids, been literally cut in half. Now we're starting to see evidence of the stabilizing, just in the last few weeks, the stock jumped over the last couple of days. I think this is an excellent risk reward and way to play this. I'm projecting a move from right near thirty four up to thirty eight really in the next couple of months. Another one is linked. So another one where the stock had pullback literally about fifty percent of everything. It's done in the last couple years. Very. Important area of support near one zero two. Now you're seeing signs of it's starting to reignite yet again. So starting to lift a little bit. I'm also betting on a rebound in Zeilinger of between five and ten percent of the weeks ahead. So I do like this group. I think it's been beaten up on fairly, and if anything until we see more signs of broader, deterioration in the tech space. It makes perfect sense on the eve of what potentially could be an upcoming trade deal. Seven percent. Move in the socks in the next couple of months. Mark would be an enormous move, and I'm just curious what, what is the context in terms of the broader markets move for that to happen? Well, my thinking is S and P gets up to between thirty forty and thirty seventy between now and the fall. So I, I do think the recent movement is very constructive with regards to stocks heading into today's fed meeting, and really the resolution, and if anything we're still seeing decent breath. Good momentum ongoing structure, new healthcare and industrials and discretionary have moved to take technologies place recently. But now tech is star. Starting to show some evidence of stabilizing. So if we can all get those working in the same direction, and we could still see gains during a time when sentiment is understandably, subdued, given the ongoing threat of potential global cool down the economy, along with trade tension, that hasn't been resolved. So people seem to be on the sidelines is Tony Dwyer said betting potentially to bearish on the hedge fund side. So technically the markets still show signs that it can rally. So I'm betting on that in the months ahead. Thanks. Get to see you. Mark nieto. Guy. Yeah silence. Rings, a bell with me and me. And then we go over to the smart board. And we do the power-pitch member that hall last year last night last year junior. But last year we talked about how everybody would talk about Zeilinger this year two thousand nine hundred and five G AI the whole thing and Marcus. Right. You know, the stock has sold off, but quite frankly, I bitch is island is in the crosshairs, some of these bigger chipmakers, I wouldn't be surprised if it got gobbled up at some point, regardless, I think silence with without a trade deal go sire from here technology, and obviously, the semi's there at the epicenter of the entire trade issue. So if you if you think we're going to see positive headlines going forward. This is where you want to be. So I agree with Mark ninety nine ninety nine percent. But if you look at Micron it's dependent on D ram pricing. So if you get a pop of ten percent, take it sold. Get out of your position because derailed has done nothing, and I expect Micron to retrace move lower. I don't have an exposure here. I understand what he's saying about if the market it up seven percent of. Market goes up something like four is what he was saying. The flip side, though, to me would be that these go down significantly more than the market for the mortgage goes down. Let's say four percent there's no deal. I, I don't I don't love them. They're screaming cheap to me. Silence. We keep talking about macro, we keep, you know, blanketing trade war dynamics, SMH obviously center, the storm, but, but what we're hearing from the bottom up perspective company by company is tale of itself in terms of inventories, and in terms of the cycle. And so does that suddenly trade war is a panacea for the whole sector? I don't think so. And three days ago you could look at the semi's chart and said that was a terrible chart. That was a chart that was basically kicking down to the two hundred day and actually looked like it was in a lot of trouble. Meanwhile, the triple cues, and if you look in mega cap tech, it's actually outperformed and that's with all the headlines on the regulatory front. So to me, would you rather in here? I go doing this by myself rather on the trip accuse over the SMH to that he just. All right. Still ahead. War. All the stock is soaring after its earnings report, the conference. Call is underway. We'll bring you the latest mccaslin. Federal Reserve chair Jerome Powell weighing in on Facebook's new cryptocurrency, libra might be cello block our capital will be here to tell us a what it could mean. For the crypto space, much more fast still ahead. Welcome back, check out years of oracle jumping after reporting earnings and briefly hitting an all time high. Let's get to John Ford back at headquarters with more John or got a nice pop with the beat is you could just see on the chart beat on the top and bottom, but faded a bit into the earnings call. But when CEO Safran counts gave the guidance things started looking up. It's above analysts expectations. Here's a flavor. Packed here. We grew three percent and for fiscal year, twenty twenty I expect total revenue will grow faster than last year. Constant currency, of course, and that we will once again, report double digit EPS growth. They liked that the other CEO Mark heard oracle has to cited IDC's assessment that oracle gained more market share in cloud apps than its rivals. But analysts really wanted to talk about database which in a way was supply surprising. Oracle chairman, Larry Ellison said he seeing signals from cloud usage at the company's new autonomous database is getting strong interest, which he suggested will lead to accelerate in growth there. This appears to be another company that has dodged that rumored enterprise spending slowdown. Let's talking to Sean to Ryan this morning after their earnings outperformed an adobe increasingly is an enterprise company he too. Expected continue strong momentum throughout the year despite that kind of tepid guidance. They gave didn't raise their full year. Forecasts adobe never raises full year this early. So overall these two companies that report early in the cycle sounding pretty bullish Muslim. All right. John, thank you, John, Beckett headquarters guy when descending oracle. So to contend would you rather? So I wouldn't know quarter was fine. Listen revenue beat EPS, be thirteen times forward, earnings revenue growth is air EPS growth is the stock is cheap valuation. But if you want to play, would you rather? And I'm glad you talked about we thought last night now Toby is twice two and a half times evaluation. But you know what you might get two and a half more times to stock performance. We set a lot of analysts will raise their price targets a few of them did today. I think it will be goes much from here the license revenue for these guys at fifteen percent is annuity. Mean this is what people are paying for. This is what guys stock moving. That's, that's both. I'm going to go a little bit out of on the. Rather? They're not exactly in the same space, but SAP and oracle are always compared SAP is up thirty two percent year to date and oracles up sixteen percent. What I think the, the real interesting dynamic is that Salesforce, used to be the quote unquote cool kids in the room, and those were the established great hair gentlemen, in the room or ladies in the room. And now you have CRM up twelve percent. So you starting to get that change of the guard where you're going back to the more established companies. So I'd go either SAP or oracle SAP been the one that's been the leader. It's kind of interesting. I'm wondering just historical p it's cheap to itself by a fair amount. And, you know, if they've actually turned. Then it's not expensive at all. All right. Take a look at our Kramer, Cam Jim, is talking to the adobe CEO following the company's big earnings beat that is coming up on that money at the top of the hour. Plus, fed chair Powell revealing Facebook discussed the bre with the Federal Reserve ahead of the digital currencies unveiling blocked our capital. Cartner Michael Bucella. We'll be here to explain why this could be the beginning of the crypto renaissance. Facebook, I believe, has made quite broad rounds in around the world, really with regulators supervisors, and lots of people to discuss their plans, and that, that certainly includes us, and we're you know, it's something we're, we're looking at potential benefits here. There are also potential risks. Particularly of a currency that could could potentially have large application. I was fed chair Powell today. Addressing Facebook speak. Crypto currency unveiled this week. This is lawmakers already pushing back on the tech giant, calling her Facebook to put a halt on his Lieber launch plans. Our next guest says this is only the beginning of the crypto renaissance. Let's bring in Mike Chela partner at blocked our capital, Mike. It's good to see you again. Good. You, you actually think that libra is going to help the crypto community in general because small percentage of people who adopt libra actually diversify that could be a tailwind. I don't understand though. Why these people who usually who would use libra would be interested in diversifying into other coins short show. So I think a few things. At the store. This is more of a global payments announcement that a Facebook announcement. This is Facebook is one equal part of twenty eight members soon to be one hundred over the course of five years that will affect anything that touches transfer value. I think the things they've done. Right. Is obviously a lot of regulatory pushback since they've done right. Is for example, they registered with FinCEN already done. They have MSP licenses in fifty states. So they've taken the regulatory step forward. I they did focus on again. A lot of crypto currencies represents aggress roots efforts there. Now, taking one of the largest distribution forces in the world. Two point seven billion monthly active users and are creating what is hopefully a very valuable asset for the digital asset crypto asset industry, going forward and they provided a very clear and transparent, roadmap to doing so. Right. I mean I get all that. But I'm still trying to figure out why this is actually good for the crippled community. I mean, I feel like this embodies exactly what crypto was supposed to be and never became or hasn't become yet. Well, you, you have to separate the ideologies of both, so the reason they can they can coexist is because the folks you invest in bitcoin are hedging against trade wars are hedging against currency wars there. They don't trust. There initially back in the onset of crypto assets. They were the cipher pumpkin anarchist groups. The Austrian economy, the reason that this will eventually work is that if you onboard even one percent of those two point seven billion monthly active users, and they're using whatever it may be Khalib wallet at a Facebook or another competitive wallet. The, the potential for them to diversify their crypto assets into a I would consider this consortium its own sovereignty now and non-sovereign entity that could be something that's appealing Facebook users wanted to do that. If they haven't done it already. I guess, that's, that's what I'm trying to make a link between or a short, what that draw it'll many people who want to own crypto assets, but aren't comfortable with the UI the US Facebook is an expert and user, interface and user experience. They're going to make it almost seem seamless for you to transfer your dollars into libra tokens, and hopefully, then tend to support additional tokens but never was didn't have MasterCard MasterCard. L dollars behind it. Any problems to the extent ABC uses want to be in crypto currencies to the extent that those are speculators. This is not a speculation at all. This is the anti-speculation. This is pegged at, you know whatever the basket is. So. I don't get that part of it. So, again, shouldn't be viewed as speculation as a speculative asset. This is backed by USD euro yen, pound, the, the idea that it remains a stabile asset to those basket of currencies, but it's what it's going to do is open up a payments, ecosystem or Trent value transfer ecosystem that didn't exist before there's ninety million companies in the Facebook, ecosystem. If you include the ecosystem of the entire consortium of large tech companies venture capital firms, I think, eventually financial services firms, I was at Goldman Sachs macroconferences Toronto yesterday and the opening remarks from, from David Solomon were, you know, we're, we're about obviously, the macaroni Brawley, but they touched on potentially this disruptive factor infantile, I think what Karen is getting to his skepticism that a Facebook user of libra would be the kind of person even a percentage of them that would speculate on other digital assets. Right. So, again, I'll go back to many people who want to access the space, but are too nervous to it. It may be one percent. Maybe so piece that together, though, with, if a trade deal happens, and a lot of people in this space are saying, oh, you know, there's a almost exact negative correlation to win China, put tariffs on in may and, and the s&p five hundred and bitcoin. If we reached a deal, what other catalysts is there for further demand for non sovereign assets for, for crypto again, it represents digital value in a way that we've never had before this is the this is the, you know, if let's say, let's take bitcoin, for example, it's the largest of the mall and, and clearly the dominant player in the space that is that is a digital store value that cannot be inflated. It cannot be touched. A can't be confiscated. That is, that's what the real inherent value in the catalysts to go beyond nine thousand to go to fit ten alternate of acid that. So it's the same stuff that exists. Really so driver performance of bitcoin this year. This was well known the Facebook announced this a while ago. I it's, it's not a shock to anyone, they really drivers of what's happened in bitcoin. We're, we're all the other announcements thus far fidelity finally, in their custody product, you have whole foods AT and T, Nordstrom, other companies accepting crypto currency, you have hundreds of engineers, but then each of the exchanges that are developing faster and better trading trading. Engines, you have a robust options market. We're looking at variance swaps in crypto acids now, which is pretty exciting to have. Good to see. Good to see you. Thank you. What do you think? Well, I, I think Facebook is certainly had a huge benefit from this news. And, and the reality is that, when my talks about the, there's been interesting speculation. There's also been interested at a time when there's been uncertainty around the fed. It sounds like it's the new gold. That's not really the, the essence and, and the, the does for, for why people said they were coming forward with crypto. It's why we knew crypto is a very popular place for people to trade and be speculated because wildly volatile because the markets were in a fish. And so, ultimately when I hear that some of the biggest payments folks in the world, are developing this network together, that's peer to peer payments doesn't necessarily mean that it's all crypto. But again, I think the reason for crypto has been more about speculation getting Mike touched on this. But second derivative again, if you wonder why banks trading like utilities, I think this doesn't happen obviously next week or a month from now but banks are being disenfranchised by things that might continue just started talking about which is why in my opinion, there might be some upside banks. But to me, it sort of mitigated and probably quite limited in this environment. Epa slack announces its pricing for listing. Here's a Spotify have in stuck in no-man's land since its direct listening last year. But you won't believe what options traders are betting. We've got that next for live at NASDAQ in Times Square. More fast money still ahead. Welcome back to pass money. We found out moments ago slacks reference price will be twenty six bucks a share, head of its direct listening tomorrow and the only other heavy hitter to list shares directly with Spotify and the stock is right back where it started from more than a year ago, but options traders aren't betting on the stock seeing for long Mico is in Massachusetts today with the options action. Hey, mike. There are so yes, Spotify actually sees pretty good options volumes. We've seen average volume over forty three hundred contracts day and average put volume of over twenty three hundred contracts day. So calls have been outpacing, puts by roughly two to one and where we're seeing the highest open interest right now is actually, the August one sixty calls those were trading around five dollars last I looked so buyers of those calls are betting that Spotify could be above that one hundred and sixty dollars strike price by at least the five bucks that they paid which would be up about thirteen percent from where the stock closed today, and I think it's going to be interesting when we take a look at slack. Unlike some of the IPO's where the options markets really had very wide spreads and had very much lower forward prices due to the very high borrow costs essentially because of the high short interest, whether it's going to be more like Spotify, where we don't really see that not a very high short interest, very tight spreads, and no real discount in the Ford prices. And so it'll be interesting when we slack actually list. That's what we see something more like Spotify ends up being less like beyond over and lift. All right. I'm glad you're getting around town and wouldn't hitting another location. Lighthouse mico. For more options action, full shows Friday, five thirty PM eastern time up next final trade. The vinyl trades around the horn stock. We've forgotten this kind of decoupled from the trade war is, is apple in my view. And I think it gets back to the fundamentals that, that to me, still, make this a by if nothing else, the capital markets activity care woman. Yes. Talked about a couple months ago and it traded down. So sharply wasn't when the market was down. It was on fears of healthcare for all in April hit a little too twenty-seven now here at two ninety one you've got to take a little money up to sell. Samantha. Stephen Bausch health companies, the name, you don't talk about a lot. I'm still long. It take a look at it, technically it setting up. Well, you know what the chairwoman is saying, with anthem respected by, but I'll say crosshairs are now left it from the space UNH has been performing. Well, I think you stay with United health. Evacuate, Mark five more fast money. Meantime, don't going mad money which Kramer starts now. Since eighteen ninety six SNP Dow Jones indices has been the leading source for index inovation we've always been committed to leveling the playing field with solutions for all investors as well as the cutting edge research, and real time information, investors. Need to navigate the markets confidently our solution, spin, all major asset classes in developed and emerging markets globally. We leverage leading trends like ES G and factor strategies to intimidate these changing modern day dynamics. Get our latest insights by searching index allergy on the web.

Federal Reserve Facebook Steve Lieberman United States Tony Dwyer Tim Seymour China Jerome Powell Mark New York City Karen Melissa CEO Stephen Bausch technician IBM
Why Now Is a Good Time to Buy the Market, and the U.S. Cracks Down on China

CNBC's Fast Money

1:30:33 hr | 5 months ago

Why Now Is a Good Time to Buy the Market, and the U.S. Cracks Down on China

"Today every answer matters more than ever before because whether it's about health deliveries or finance, some things just can't wait. That's why IBM is helping businesses manage millions of calls, texts, and chats with Watson Assistant. It's conversational AI designed to help your customers find the answers they need faster no matter the industry. Let's put smart to work visit IBM DOT COM Slash Watson Assistant to learn more. I'm Dominic for Melissa Lee tonight in this fast money tonight's trader lineup for the Big Show we've got guy. Tim Seymour Pete Nigerian and Steve Grasso Tonight on fast markets and full on rally mode today. But is it too late to get in on the gains and the action friend of the show Tony Dwyer joins us to tell us why he thinks it's not a bad time to buy and later on investor snapping up shares of snap inc today as the social media platform, it gets a big upgrade. We'll find out what makes it stick out in that big. Social Media Space Plus. Pete's got a fast pitch on one medical device maker. He says could be a real home run. We'll tell you what it is as he lays out the big case in that medical miracle mystery charts and in a special bonus hour of fast money at six PM eastern time we're taking all your burning trading questions tweet us at CNBC fast money, and you might just get them answered live here on the show coming in the next hour. But. We start with that monster rally on Wall Street today the SNP up more than one and a half percent and the Dow jumping over four hundred points. As you can see there, the Nasdaq also up nearly two percent leading those markets, higher energy stocks, financials, and the small caps as well. Investors appearing hopeful a new deal for stimulus is coming down the Pike but markets are still down significantly for the month does today's action give you a reason to perhaps be more optimistic and for that perhaps I I will turn to you first. dominated. Welcome. It's always wonderful to have you on board got a bonus hour with you. So that's fantastic and you know I think the answer. Your question is yes but you can't say that in a vacuum something we talked about over the last couple of weeks was you probably see a short term market bottom on a day the market sells off and the volatility index sells off with it and you actually saw that. Over a few days, NOP can speak to this vicks topped out around thirty six, and as the market was selling off, the VIX was selling off down to the twenty five and a half level that gave you a pretty good indication that maybe we were going to bottom. I mentioned that because one of the things we said now for a while off that low that we made a week and a half or two. Weeks ago the obvious move at this point was probably a moved back to the prior all time high of thirty, three, ninety, three that we made back in February and Steve can speak to this because now does that make sense for that reason it also makes sense because it would be a text book, fifty percent correction of the recent, all time high and the low. We made a couple of weeks ago. So the. Answer is yes. But let's see what happens when we get there and when I say when because I do think we're GONNA rally another forty or so snp handles. All right. So Steve, let's bring you in because guy teed it up for you. There is this level is this a market right now the action you've seen that makes you feel as though you're comfortable being long comfortable putting new money to work right now. So I know everyone wants to have that gut instinct of being positive on the overall market and this market has shown you nothing. But positively, because that gap tom is closing from the corona bottom to when we finally actually restart the economy. But you talked about a couple of levels, fifty percents I'm sorry, the fifty day moving average I heard you talking about today on air thirty, three, fifty, three. So we closed right around that level that's why people are keying in on that level where did we bounce from the hundred day moving average which was thirty, two tech? So this is technically A great set up to play it for a bounce. But the problem is we still have what the problem was. We have an overbought market granted. We work that awful just a little bit. But what has been the most overbought the tech space the most bloated names, those six or ten names that we all focus on. Doesn't mean that. Have not. Rally doesn't mean that other sectors have doubt rally. But it's time to take a pause because the market and the economy or two totally different things. A lot of volatility going forward the biggest thing for me dumb month end quarter in this week. So I heard. I heard it was mentioned prior to us on closing bell I still think it's a big deal I. still think people were under weight energy. We had emanate today I still think people are underweight financials. We saw those rally today what sold off what rallied into month and I think that's what you have to keep an eye on. Let's see if it lasts a week or so Tim Seymour over the last week over the last five days of looking at our screens here it says that the big one of the bigger cloud computing. Is Up over three percent semiconductors that particular ETF the ticker SMH look at a lot is up over three percent right now for five trading days, we also saw financials and energy to Steve's point lead the rally today. So those are two different parts of the market both assuming some kind of leadership role does that then mean that there is this kind of all clear signal, the bad and the good are going up at the same time. Downgrade having you getting me to say you've got an all clear signal is something that's tough to do But I I hear where you are, and if you look at the triple cues and the Nasdaq one hundred, you've rallied almost six percent over three sessions. The semi's which they have multiple times over the last couple of years and certainly coming out of the worst dacoven to have have certainly been a leader and something to follow it. In fact, they've they've kind of lead the way. So both of these are now back over the fifty Todd Gordon will be your to talk some. Of the technicals and a bit, but you're talking about the broadening of the market and to the extent that maybe you're excited today about the move in retail and in small caps and along with that with the banks, and if you look at the European banks were up over three and a half percent. So these are the parts of the mark that I think people wanna see the good news for all investors. So back to at least where you've had an all clear and where I don't think anything has changed is the guys who talked about some oversold conditions I have to do that I. Think. The Nasdaq can contract can correct further down and I I mentioned kind of those late June early July levels but the Fed is still very much your I think the payroll numbers this weaker are going to give you some sense of where the labor market certainly is going to need a lot more fiscal health than just with monetary policy is but I think you've got a case where you've at least seen parts of the economy. Especially, the transports give you a lot of reason for confidence in terms of leadership and they lead you on the way down from two thousand, eighteen to. Twenty thousand nine hundred and transports have been outperforming the market for the last almost four months now. So many key bellwether esque type parts of the market that we're watching right now. So I'M GONNA turn now to Pete and Jerry, and I know that you're on the news line with us right now at CNBC let's talk a little bit about what you're seeing in terms of trading action there is there something that makes you feel as though this is a constructive environment or are we do for a little bit more consolidation perhaps even some more discount pricing in the coming weeks ahead of the election. Well I certainly could see the consolidation side of it. Tom. This. Also though in the derivatives world where I live I gotTA. Tell you something a lot of bullish activity over recent weeks and and it just continues to come come in now A. Lotta that short term today we are seeing a little bit longer term type offer. Options that we were seeing whether we're buying in major indices. So I'm not even just talking specific names or whatever. I'm just talking about indifferent indices across the board we're seeing some buying. So it felt like a bullish tone potentially, but not as much short-term as we had been seeing that makes it a little bit more interesting because it's very easy to sit there in the very short term in. This movement that we are seeing but to commit to buy those kind of premiums that you've got to to be able to go out to January and December that says a lot more about what the what, what they really are feeling those very large buyers out there in the marketplace. So volatility guy brought this up and I just have to address this real quick volatility was selling off all day. It was doing early then it started to sell off. We actually nearly closed on the absolute lows of the session, which was pretty interesting to see how that volatility index was coming down as market came down from being up five hundred down to four hundred yourself. A lot of different things going on right now. But certainly, there are sectors that I'm impressed with the do lead us a little bit. More so out where we have been recently light transports like material and a few other names I like seeing what we thought financial today. But that's one day. We haven't been able to see financial foot back to back to back days together for a very long period of time. So that nothing I think we got to watch very very closely. All right. We did get some back to back to. Back days with those financials this time round, we'll see if it sticks around. So that's our first pass at the broader market narrative now. So our next guest says, last week's lows may have been an even better time to buy than the march bottom. Believe you're not an investors might still have a chance to get in. Let's have them explain why this is Tony Dwyer chief market strategist at Canaccord. genuity he joins US now welcome Tony. Always great to have you here. Let's break down your thesis. How could it be at higher prices that it was a better time to buy over the last couple of weeks than those dead lows over there that we saw back in March that down they got the story wrong at it and say that. So I mean I hate to put it that blunt but I was terrific opportunity to buy those laws. We had an opinion in March where we also thought that the market is set for pretty sharp oversold bands but the I never said that I think that that low last week was better than the march laws that that's not accurate are. So let's go then figure out whether or not. This is a good time. To buy then I mean, this is an environment where we're in this kind of no man's Land We've bounced off some recent very near-term bottoms but we're kind of below the record highs that we've seen. There aren't a lot of positive catalysts yet. We still have the election looming. So why would you even want to get into this market having all of that uncertainty? extraordinarily. Positive catalysts extraordinary. We have never in the history of our country seen excess liquidity where it is today, we have never had a fair Federal Reserve chairperson literally say were printing money and we're keeping rates at zero for years, and even if the economy gets hot in inflation goes above our average, a two percent were still gonNA keep rates zero and in addition when you look at the global economy, you're seeing a synchronized pivot off in the low and growth. It's a really important point where you've got the combination of excess liquidity that can fund growth that is just beginning dumb going to problems in the market when you have. A lack of liquidity when you don't know what the economy looks like that's what was happening and I think what was referenced you know in the in the pre interview is what was happening hit? What's the difference between buying down ten percent now last week versus buying down ten percent in early March in the differences and why Don't we had downgraded the market in January. So we were not saying by the down ten percent back. Then the reason is you had no idea what code nineteen ones you had no idea what the Fed was going to do because you had no idea what the economy was going to do. We had made the decision to shut it down yet. Today we have excessive fed liquidity the feds unbelievable have a global synchronized recovery, and nearly every attack is thankfully working on a vaccine or treatment and I think that's really what the march references to what's the difference between the first down ten percent then and the first down ten percent now, and that's why we wanted to attack last week. Remember corrections are only natural normal and healthy until you actually go out. And then by definition, it feels like something different. So Tony it's Steve Grauso, look at it. You just you just mentioned it. We already had though excess liquidity. We've had rates zero have the ability to pop above the feds inflation target. So you just said it we sold off ten percent with all that. So are you talking about a Max down of ten percent? I mean that happened with all the scenario that you had you think that this market is insulated for if nothing else changes for a ten percent only sell off going forward. Given Algorithms I mean you're you're trader? You know it would be ridiculous for me to say that let me give you some stats my buddy. Michael my stats do Jason Gopher sentiment trader. I'll give you the exact stats that we came up with today's study. We did together since nineteen sixty two. This was only the ten time. The SNP. Is pivoted off a thirty day. Lau. While in an up trend and then had an eighty percents upside vitamin. UPSIDE, birthday. The worst case, six months later of those prior nine times was one time. Of minus point one percent and eleven percent meeting gained six months one year Europe each time with a median gain of sixteen percent. So I have no idea you know I've proven to the viewers I'm not the greatest trader in the world. The Intermediate Term Front. I stick with the data. Right in the data both on macroeconomic front. And a trading front subject by the way in this data, it also shows when we did this study, the next two weeks choppy this is going to be choppy it should be. Choppy is what we're going to get. I think all the way into the election and perhaps even beyond there as well. Tony. Thanks great to get your thoughts as always, Tony Dwyer over a candidate and he is back constructive on the markets here we appreciate your thoughts. Thanks down. All right. So guys, let's trade this and Pete will go to you first let's trade it. How is Tony's thesis playing in the way that you were attacking the markets these days? Well. You know it's primarily been for me. Obviously, I was talking earlier about the derivatives markets but I've been seeing so much interesting activity there dominant. That's really been something. First of all volumes have been off the charts. I mean, we've been talking about this all year all of twenty twenty volumes have been huge. So because of that is an incredible amount of liquidity in the markets right now in a lot. Of It had been very, very short term. So I like the fact we're seeing a little bit longer term but I don't mind trading and trading that short term and I do expect it to be bumpy as Tony was alluding to. So I think there's no doubt about it. You have to be very disciplined this market right now you have to have your hands partially in your pockets ready to to wait. But they're also ready to pounce and that's exactly the way. I feel right now it sounds very tactical to me. So let's get another take here. Just how much higher can the market run at this point? Let's go off the shorts with Todd Gordon Trading analysis, Dot com to find out what he's seeing. Todd I. Know that the traitors we've all been talking about this battle ground that's happening right now it's. that. Fifty Day moving average. Yes. I know the markets are more than just one simple number but when you have the Dow hovering right around there, the S. and P. Five, hundred and Nasdaq composite right on top of their fifty day moving averages. It seems as though this is a place where you say, Hey, it could go higher or this is resistance and we're due for a pause what the charts telling you. Yet Hey. Listen I bullish I'm continually bullets. I'm not so much of a moving average guys as much as grasso is and maybe that can give another stat on top of what Tony just brought in which I think is interesting. We're on the verge of losing a five-month consecutive gain in the Nasdaq we've only seen that one other time in history and that was heading into the cove and sell off right. So so that was the first time in the history of the Nasdaq that we actually saw this. So if we were to close down in, September, history would show with this momentum behind the market we should continue. So let's take a look at the last ten years. There's two situations. Sixteen in May two, thousand, seventeen. We had a bit of a pause but that we rally thirty seven percent before we saw a meaningful correction before that it was the march on lows we went for seven months ago, took a breather, and then we left for another twenty four percent. So again, covert, it was the first time that we saw a meaningful decline following a five-month rally now. Let's take a look at this. September. We noses seasonally bearish month over the last thirty years. The Nasdaq's down an average of only point one, three percent September. But here's the thing which falls on top of my last stat. October snaps back to be the biggest monthly gain of two point seven, four percent. So I continued to be overweight tech in my portfolio I've my biggest holdings excel cake uses apple in a netflix If, we take a look at the. vix I heard all the guys talked a lot about volatility. Super Interesting. Important, keep in mind here if we look at the chart of the people before we get into the vix in correction moat, the last two corrections from from the credit crisis low were consolidating patterns consolidating volatility higher like like coming to a point. This is opposite. We're expanding. We're seeing expansion vicks range expansion anwr, actually seeing higher highs and higher lows, which is why it's incredibly difficult scenario for for investors but good for for trade or so I don't actually think we're through resistance about. Thirty five hundred in the new trend and the SNP to follow it into close it down I. Y is sort of my catch up sector I love it air freight logistics acting really well, Fedex ups sorry. made the move railroad some of made the move watch CSX eighty box with a nice salad like one point three percent dividends don't do airlines yet you're still stuck on the tarmac but look for the y up to that tool five, I think that's your next ketchup level. Divergence in those transports developing their Todd Gordon trading analysis dot Com. Thanks very much for those charts. So let's trade this guy's Guy Adama. I will go to you first with this. A lot of stuff to soak in what we heard from Tony what we just heard from todd but with all of that in mind. Is it changing your calculus at all with how you approach what's happening with the markets? Appreciate their points I mean. I'M NOT GONNA I'M NOT GONNA over five seven minute conversation. It's hard for me to change what said five minutes prior to that. But what I will say something to. Tony. mentioned. I. Think Tim Probably Agree with this. There are names that are probably do well into the environment they're talking about and the Caterpillar. For example, the name we talked about. A few months ago. I think Pete was on that night. The stock was trading around one thirty four and we said it really sets up well to test that high on January, which was one, forty, eight. It did that actually traded north of one, fifty five and here we are at one forty eight again. So for trading opportunities off exactly what? Todd. And and and Tony said name like catapult for the risk ward to me really looks interesting. All right. So we've talked about Caterpillar perhaps some of the transportation stocks Fedex and ups, and maybe not so much the airlines just yet. All right thanks guys were coming back to you in just a moment here coming up on the show another twist seemingly. Nonstop emanate drama between lvmh and Tiffany. The bowl claim that the French luxury houses making me about the company wanted to buy just a few months ago and things could get pretty spicy for shares of McCormick. It spicy McCormick after its next earnings reports what options traders are expecting from those results, all of that coming up fast money returns after this break. Slack is a new way to communicate with your team replaces email the something faster better, organized and more secure in a world where people could be anywhere. It becomes your office try it for free at Slack Dot, com slack where work happens. We'll come back to fast money lvmh has filed a counter lawsuit against Tiffany. That's just the latest piece of drama going in that ongoing merger dispute between the two luxury brands. Robert Frank joins us now with the latest here, and this is getting to be a pretty bad divorce in a marriage that hasn't even happened yet. That's right dominance. The latest shot fired Mike. Call the battle of the here lvmh filing a counterclaim against tiffany in Delaware Chancery Court. Now, this is a response to Tiffany's lawsuit filed earlier. This month that sought to force lvmh to proceed with that deal to buy tiffany for sixteen billion dollars now lvmh complaining that here's how it starts out. This is the first line. The business lvmh proposed to acquire November of twenty, nine, thousand, nine, hundred, no longer exists. What remains is a mis manage business with no end to its problems insight and it just gets worse from there dom now. Alleges there was a material adverse effect here it says that the pandemic created extraordinary damage to tiffany and this is important. There was no carve out in the deal agreement for pandemic. Now, the core of the complaint is really that tiffany has been mismanaged. It says that tiffany paid dividends when it shouldn't have that it cut marketing and s GNA expenses that will actually cost future. Sales and said that luxury companies in the US have a bleak future saying that ninety percent of Tiffany's sales are brick and mortar stores. You don't WanNa be that kind of retail right now and eighty percent of those brick and mortar stores that typically has our shopping malls. Now lvmh also cites a letter from the French foreign minister that says, it is impossible to close that transaction. That's what Lvmh's saying and the trial for all of this set to begin on January fifth dom. So we'll see whether the judge gets to hear all this where they reached some kind of settlement. Before whether they reach a deal at a lower price, a lot's going to happen in the next couple of months before that trial. All Right Robert Frank thank you very much for. That latest update on Tiffany and what's happening with lvmh. So let's toss it out and traded guys Tim Seymour to you first does this change exactly how you feel about either lvmh or Tiffany I, mean a lot of folks bought it thinking it was going to happen and then Kovic Struck, and now here we are with a big corporate divorce for deal that hasn't even closed yet. I mean, we've got a big SACRA blue. For sure exclaim claim and I think. What this is really about as a discount. Because I I, don't think there's anything in the lvmh, claim that has validity certainly not around Kobe certainly, not around mismanagement we've gone through this Karen, Fireman Centigrade job we've talked about the agreement and restrictions upon in the binding nature of the agreement, and there's there's nothing and certainly going on about the business and mismanagement and Kobe is is these are not groundbreaking this up I. Think the Jan v Court date is a deadline that should get you some some decision and I think the only thing that hangs outstanding is whether The letter from the French government was binding or whether it was advice or whatever it was I. If you look at Tiffany shares, they've been inching up there up about seven percent from the the bottom of the announcement of this news and I think that's where you're going to get I. Don't think there are other likely. There's been other folks riche Ma other people thrown into the mix as possible takeover candidates but I think this deal is going to happen. It's going to very very difficult for lvmh to get out of it. So, Dom when you look at Tiffany's though had asked how it makes. You feel about it I agree with everything that Tim said I think lvmh is GonNa have a rough time backing out of the deal when you look at those numbers that Robert Frank just said Tiffany's ninety percent brick and mortar and eighty percent of those sales are in malls that makes me feel extremely negative on Tiffany tiffany's. But when you have to think about the Bra, broader macro picture. People are looking for premium brands to brought to by, and there's not that many that are stand alone and I power pitched Capri Holdings that's the owner of Jimmy Choo and versatility and throw in Michael. Kors that does over about four billion dollars in revenues normalized earnings. So that's the way I would play it but I do agree with him. That lvmh's is going to have a tough road to hoe to back out of this deal battle of the blink. So says, Robert Frank. All Right, guys thank you very much for those thoughts there, and we're just getting that momentum going here on the show. Here's what's coming up next. The US putting the squeeze on China's biggest chipmaker. But what will the crackdown mean for the US tech sector plus shares of snap catching bid today but at these gains here to stay or our investors about to get go state, we'll bring you the call and a lot more when fast bunny returns. Slack is a new way to communicate with your team. It replaces email was something faster better, organized and more secure. Every conversation has its own channel that's easy to joined search or create, and it's all integrated. You can attach info from thousands of APPS. Make calls everything you need to get your work done. Welcome to your new headquarters try it for free at Slack Dot Com slack where work happens. Welcome back to FAST MONTE THE US cracking down on China's biggest chipmaker S.. M.. A. Eunice Yoon has all of those details. Chinese chip giant SMS's faces an uncertain future with the US tightening export restrictions on Friday the Commerce Department warned suppliers in a letter that shipping to smi I see posed an unacceptable risk of being diverted for military and use suppliers of certain equipment will now have to apply for individual expert licenses. SMS's statement that it had not received official notice from the US insisted it has no ties to. The Chinese military investors in Hong Kong and Shanghai are rattled about what the move means for the chipmaker. It's key customer telecoms, Titan Weiwei and Beijing's ambitions to build up its homegrown chip industry official paper. The Global Times is calling for China to embark on a long tech march to counter what it sees as a uses attempt to hold China back units. You seem. You see this is news Beijing. All right. Thank you very much for that. So let's trade guy will go to you for this one here. This is perhaps one of the biggest stories in the marketplace right now and not just because of. But what it means for the chip industry and US China relations at large, how do you feel about that kind of tension that we're seeing right now? It's interesting. You say that you're happen to be right in your assertion. It's a huge story and I thought you know this escalation that's been going on with the United States and China basically since last fall was going to continue to escalate. About that, what I've been incorrect about is that would have an adverse effect on the broader market. Your points are absolutely spot on the market doesn't care because here we are you know five, six, seven percent from an all-time high in the S. and P. Five hundred. I'm not really sure why the market hasn't taken notice maybe they're bigger forces at work maybe Tim's point and Tony's point liquidity trumps everything but this escalate not going away. It's GONNA continue to ramp up and maybe at a certain point, we hit that diminishing marginal returns and the market sorts to see it and moves from it but up until now there have. Been Not one headline that's come out that it's really affected the market in any meaningful way. Yeah. Guy And it's been that way for arguably five or six years at this point now that the market just keeps shaking everything off here. Let's get more on this story though because it is big with Dwarf McNeil, he's managing director at Longview Global. He previously worked for the Department of Defense in the Obama Administration. He's also CNBC contributor. Welcome back to the show war, Drik let's talk about just how important from a geopolitical and market perspective it is for this next salvo, this increasing tension between the US and China on the technology front. Thanks. For having the dumb listen I. said last week and I say again welcome to the Tech War even though semi's have been doing well I think you would be wise to pay attention to increasing geopolitical risk in the sector. This latest move dom wasn't quite as bad as it could have been. In fact, the fence department wanted a snake be put on the Commerce Department, Bureau, Industry Securities, entities list that did not happen, but there will still be restrictions placed on export of items to China items that the Pentagon years will ultimately end up in the hands of the Police People's Liberation Army or the L. Lay. As for China China's already announced that it will take quote unquote countermeasures, which is a signal that they will retaliate at some point. In the future I suspect that they will keep their powder dry for now but dom, you'll recall that last week. The Chinese announced conditions for something that they call the unpaid friendly entities list. So they could use this list as a way to strike back at at the US but those suspected it will happen in a symmetrical way. Dumb I. Don't think that. China. Wants strike at the semiconductor industry which they need so much down they. Rely on about three hundred, billion dollars and foreign. Tech for semiconductors space. This is an extreme vulnerability for Beijing. They have announced that they will do everything possible to have what they call indigenous production and manufacturing in space, and I suspect dominant October when the Chinese meet forcing you level meeting at the end of the month to prepare for their fourteen five year plan, there will be huge announcements about. The amount of money that China is prepared to spin to become self reliant as much as they can in this space dom just one note is about ten thousand or so companies have decided that they're gonNa do something in this space to try and take advantage of the money that Beijing is spending to become indigenously independent in the spits we're talking to wardrobe. Biggest economies in the world by far and they're battling it out with each other on big fronts like technology artificial intelligence five, G. nexgen wireless is this. The next Cold War is this the next Russia versus us from like the nineteen seventies and eighties? Is this going to carry on for the next twenty thirty forty years? Well Dhamma hope at some point cooler has prevailed but I can tell you The Tech War I think is with us. At least in the near term I, don't see this ending a neither one of these giants will back down and I think both of them are big enough that they can can withstand the punch from one another. So short of a hot war which no one hopes to see I think we can expect to see more respect to tech war more respect, the tree and a number of other sectors dom. This is with us for a while also, companies should be prepared for the geopolitical risk. Alright Dwar Drake. Great to have you on the show. Always Great. Your thoughts. We appreciate it. Our trade, this guy's, and maybe tim, we'll go to you not because I'm trying to type cast you but but you do have a good amount of experience in these emerging markets not that China as the second biggest economy in the world should be really characterized as emerging market anymore but is this something the investor should be fearful about this increasing tension guys point and it's valid. It hasn't derailed anything over the last five, six, seven years. Without question and I've said this before that the chips and data are effectively the new oil I mean we're we're we're we fifteen years ago we were fighting over self sufficiency and essentially resources were the global strategic assets that the world was fighting over. It's absolutely technology. So the question is who who benefits from this, who and who loses I mean if you look at US companies in roughly fifty percent of the input to smick are coming from American companies. So aamodt is one of them and then on the beneficiary side. Taiwan semi TSM is not only the largest company in the EM index or it's become one of the top ones really not even being in the top ten but the move in this company to be the white label provider for much of the world continues and they are fine and right now they'll have the edge here and I think they will continue to press ahead and I would own the stock. All right chips still in full force here guys. Thank you very much up on the show. We've got a special hour fast money. Coming your way at the top of this up at this hour, send us your burning trading questions. We will get you some answers we're going to try anyway live tweet us at CNBC fast money. We might just answer your questions live on air, but first Pete's winding up for a fast pitch theory is the cap on with the bowl there it's a medical device maker. He says, is about to break out of a months long Rut. We'll see if the other traders are buying what he's selling fast money is back in two minutes. Welcome back to fast money. One medical device stock has been stuck in a Rut as of late but pete and Jerry, and says, a breakout is on the horizon. So he's giving us another fast pitch. So Pete, we showed him the mystery chart. What's the name? Well I'm GonNa give you medtronic and I liked this name a lot dom as a matter of fact, not too long ago just in the last two weeks or so I bought this company in terms of the shares. But I really like it for a lot of different reasons I'll start off with the leadership when you look at Jeff Martha who was running the operation and he was he's been at the company a long time, but he was the integration officer when they were going. Through the covidien acquisition forty, three, billion dollar acquisition that actually has worked out very very well for the company. Obviously, they have the confidence in him. Now he's running the show there and I liked the Moxie I liked the strength that this guy brings to the company on the fundamental side. This is a company that has incredible free cash flow I like that, but it's not just a one time thing. This is a company that for decades has had incredible cash flows their margins continue. To be very, very strong. When I look at the fundamental side of this company, they are fundamentally strong. So their their position. So well, right now dom that I think there really are from that side of things there. Great. Now, what about growth? Well, when you look at the growth look at the revenue growth over the last five years, they've consistently had about eight percent on the revenue growth side and then on the net income side twelve percent growth over the last five years so. There's a lot of reasons the like this company. This is one of those covert companies as well because a lot of what was going on from surgery standpoint surgeries that were elective well, that did hurt the company for a while and now they're coming out of that. So some similar to many other names that you don't always think about this name in terms of coming out of the covert. But certainly right now I, think they're positioned well, I like where they are in terms of. I think it's a fair P and they've got the growth. So because of that, I think this is a company that could very easily retest those higher levels they were back in January near one hundred, twenty dollars a share. All right. So pitas made his case. Let's open it up to questions from our traitor panel. WE'LL GO TO USE Steve Grasso I you have a question for Pete. Do. So if I'm right along with you, I liked this stock as well. What happens if the Kovin environment we have a relapse again since that a major head win, you just mentioned it is one of your bullets as a as a catalyst to the buy side that people were not having the elective surgeries or quite frankly not even getting into see their doctors. It wasn't Kobe related if we get another level of the Kovic virus or second round, does that make you negative on this bullish call? It doesn't make me negative Steve, but it does have some concern and I'm hoping what I'm thinking forward right now would be I think they're better stocked now than they once were in the hospital area. So because of that, I think that does play into an advantage for the surgery is not to be put off as as they were before because as you know what the reason was for the cancellation was they just didn't have enough in the hospitals to be able to combat this whole thing. So I do think that even going forward with the return of covid potential I think the hospitals are much better prepared right now. Alright. Pencils down no more questions, it's time to vote. So are you buying pizza pitch on Medtronic Ghia Dom to you I? Well use the word Moxie the last time I heard. Moxie. was when kid twist said you have moxie era get yourself a suit from the sting I know Pete knows that I'm with Pete Forty three percent EPS growth stock is too cheap. Prior all-time highs. All right. We got a Yay from. Tim, Seymour, what do you say? Resolve exciting first day with my new whiteboard, my home whiteboard. But I'm a buyer of everything pitas selling on MEDTRONIC's bottom line. Here's Pasco. Generation for this company is been a hallmark, the diversity of their end essentially their end customers and client base is extraordinarily I think coming out of Kobe or in the middle of Kobe. Is actually very well prepared. Nice job. Would you mind just putting up that portrait of Pete Nigerian up again? Would you would you mind? cause. It's pretty good right I mean. I'm just saying. It's not one of my best draw Pete whenever I can't the first time I've seen him with a whiteboard. So Pete I've done better. You're better looking than this. All Right, Steve, Grasso you. To, my to my buddy, I'm GONNA go by as well and there's about fourteen analysts that came out as positive on the stock. Recently, average average price target is one sixteen that gives you a quick ten percent of the upside. If it works alright, I clean sweep one positive pitch in three agreements either traders have spoken. Now it's your turn head over to. Our twitter handle at CNBC fast money and tell us if you're buying Pete's fast pitch on medtronic will reveal the results later on in the show plus snapping up some gains shares of snapping higher. Thanks to an analyst upgrade, we will break down what's got one analyst. So bullish on this social media stock stick around more fast money is coming up after this. Mark Your calendars for this Wednesday September thirtieth when delivering Alpha returns for its ten year back with US Treasury, Secretary Steven Mnuchin. Also Steven Schwartzman Mark Lasri Mary heiress and more head over to delivering Alpha Dot Com to learn more and to register a huge event will be covering it extensively, I know I myself will be as well. Well. Welcome back to fast money checkout shares of snap surging on an upgrade to buy endless over a Guggenheim. Those analysts saying the social stock could jump another thirteen percent from here as advertising becomes more profitable on their platform Pete Nigerian, you're tracking some of the interesting activity in the. Market related to snap. Yeah there's been multiple hits dumb. Since the very start of September as a matter of fact, some huge call buying. Them. That's when the stock was back at twenty three. Now it's actually pushing twenty five there. Out To November November twenty seven as a matter of fact being bought. So it's been very, very consistent. They were buying last Wednesday some very large buyers, Thursday even more large buyers today, even more large by yourself a lot of activity right now, dom saying exactly what this analyst is talking about, which is, Hey, this stock has room to the upside and they are finally showing a lot more profitability than they had in the past. So for that reason, I've been in this I, continue to roll. And I'm going to continue to hold onto my calls, but the option activity has certainly been right for a long time. In this name Guy Dominic, an attorney you here I if it's not snap bank is at somebody else and social media is somebody in that industry that you you tend to favor if it's not snap twitter without question twitter's one of the names you know, Kudos Sedan Nathan has been on that in terms of snap I know Steve Grasso was talking about it very early this year. And then you go back to me and I know we had this conversation on with Melissa we said there's a very good chance. It's going to take that prior all-time prior high of eighteen and a half and ratchet up into the mid twenties and here we are. I. Agree I think the Stock Gosar listen Guggenheim is probably late to this dance in terms of the run the stock and said, but I think it prints thirty probably into their earnings release I believe mid to late October, right funny to hear that not one. person. decided to bring up facebook in that discussion in this whole thing. So twitter and snap the bulk points right now in our social discussion will come up on the show McCormack gearing up to report earnings tomorrow and traders in the options market are betting on a spicy spicy hot rally for this stock, we will explain what's happening there plus there is still time to vote in our fast pitch. Pole does Pete Nigerians pitch on medtronic check out or strikeout those results coming up straight ahead fast money coming up after this break. Welcome back to fast money checkout McCormick shares spicing things up today ahead of tomorrow's big earnings release over in the options market traders are betting that there could be a party in the pantry when those results across the wires MICO has the action for Options Action Mike. So. Yeah. Take a look at McCormick. This is an interesting one because we don't usually see tremendous amount of options volume in McCormick, but it did basically pick up considerably today we saw about twenty times the average daily call volume. Now, right now, the options market is implying a move of about four point one percent when they report earnings that's in line with the four percent or so that they've averaged over the last eight quarters the most active options we saw today where the October ten calls about two thousand of those were trading for about a dollar thirty, five buyers of those calls. Ravi, obviously betting that the stock is GonNa Rally through that two hundred and ten dollars strike price by. At least the dollar and thirty five cents premium that they paid. That would represent a boost of more than eight percent to the stock price where close around one, ninety, five, twenty or so today by October expiration. So obviously, there are some who think that earnings are going to provide a positive for the stock. All right. Mike. Don't go far because we will see you at the top of the hour for more now options action get more content there. Be sure to tune into the full show. Fridays five thirty PM eastern time right here on CNBC before we get to our final trade. So it's time to reveal the results of are fast pitch. Pole is America Buying Pizza Pitch on medtronic. The people have spoken Pete and the answer here is. Yes, they are. Dirty dancing music never seems to disappoint people anyway. All right. Good job there peoper, medtronic it's time now boys for the final trade. Let's go around the Horn Tim Seymour to you I. Tim Seymour. He. Let's go to you next. I'll give you a draft kings I saw a lot of buying their today Dom I. Think it's GonNa. Go that much higher. All right really quickly Steve. Urging Galactic time to get on board up over twenty four percent by by by. Tiffany. All right. Let's go with desert for us here. Thanks for watching fast money but don't go anywhere. A special edition of total request FM is coming next. Keep it right here. A big hearty. Welcome to the mad money fans out there Jim. Cramer is off tonight but you are in luck with a very special bonus hour fast money coming your way I'm dominic shoo-in from Melissa lead today alongside Guy Me Tim Seymour and Mike. Co over the next hour we are taking your questions. That's right. We are answering them live on air. So tweet at us at CNBC fast money we just might answer you live on the air. So get those tweets coming in there. Let's kick things off with today's market rally. You can see there a lot of green on the screen stocks pushing higher kick off the week, the Dow gaining four hundred and ten points while the tech heavier. Nasdaq jumped more than one point eight percent. Also check out that Russell two thousand, the small cap index of big standout today surging nearly two and a half percent. So Guy, let's kick things off with you. What's your take on today's market action? Does it make you feel as though we're due for more green in the coming days and weeks Dominant again, thanks for being there for the second hour. It was definitely encouraging. Obviously, the last week has been encouraging. In so much obviously as the volatility index vix is going from thirty six down to twenty-six, which historically has been an encouraging sign and we've seen record. We've seen the move in the S. and P. Five hundred back that up I said it at five o'clock, I'll say it now I'm not a raging bull I'm not a I'm not a raging bear but I do think we're going to test that thirty, three, ninety, three level, which was the prior all time high. It makes sense for number of different reasons not of which would be a spot on fifty percent retracement of the prior all time high. We made a month or so ago and this recent low. All Right Mike Co let's over to you here. We're talking about some of the action that we're seeing from the trading perspective how things shaped up in terms of the market narrative for you maybe not just in the options market but overall do feel as though things are still constructive given the levels that we're at right now. Well evaluations obviously get us to a place where it's a little bit challenging but one of the things I think we need to focus on is number one. We have that same role we should stick with it. We don't fight the Fed. The Fed is obviously keeping some support to the market no matter what we do regardless of the valuations, and of course, there's investment alternatives that you have to consider. So valuations are going to be supported by the fact that rates are low. Everywhere else in the yield starved environment. So that obviously is supportive. Of course, we have had signs that there's GonNa be some volatility coming up, and we do see that although the vix the spot vicks has declined the future still remain relatively elevated. We look at the October, vix futures, November, December and January still at thirty or above for all four of those vix futures contracts and I think that basically stems from investor concern speculation that there might be considerable volatility around the election. At, considerable volatility is expected but if it really is all about the Fed, then why is it matter even at all and maybe guile turned you here because in the last hour we heard Tony Dwyer canaccord say that it's very liquidity driven if it really is so liquidity driven, then there should be no volatility heading into this election, right? You would think right and I'm glad you brought that up because the last time we made an all time high and the S&P five hundred back in February the vix had a fourteen handle. Now, after today's close, we have twenty six handles almost double the vall in terms of the move, and yet we have a fed that's been. Doing things at an unprecedented level. So that has to be somewhat concerning and also just quickly just to push back a little bit. The Fed open a window. I think it was a week or so ago I'm getting my days confused but call the big down couple of days that came after the Fed basically made a comment that they were looking to or the perception was looking to pass the baton from monetary side of things to. The fiscal side of things i. think the market got a bit caught off guard by that. So as much as the Fed is clearly in play, there's some things around the edges that make you have to wonder just a bit. All right. The wondering is still happening right now, and that's why we're going to dive right into the viewer questions. Our first question comes from a recent college graduate looking for some guidance on the latest market volatility. Everyone this guy from Washington DC like questions about the S. and P. Five hundred since the early crash September we've seen a lot volatility, the Marcus. Five hundred. With the election coming up and the two debates. Volatility could come down at all or are we going to see maybe Oh, boosts with stimulus or vaccine play towards the three sixty highs we saw around September fingers Michael. That just begs the question about options and volatility. So Mike Co will go to you first you know her thing or two about volatility and that options market. What's your take? Is the market do for that volatility with the debates and the election coming up. I think his question really had two parts. One was really about the levels that you might be targeting for the S. and P. Five hundred he was talking about spy I think when he mentioned three sixty but really thinking thirty, six hundred on the S. and P. Five hundred is sort of the level that he's talking about think we could reapproach those highs and I think the answer was given. By Guy just a second ago, which is I think that's clearly in play, but with respective volatility right now, the market is pricing in considerable volatility and I just want to give people a little bit to think about here when you take a look at the October and November December vix futures pricing anywhere from thirty to thirty two or so what kind of volatility are we talking about that would? Mean that on average, the market is bouncing around about one hundred and fifty basis points about one and a half percent per day, and that actually is showing that it's going to persist not just up until the election and not just immediately following the election because you'll remember in two thousand sixteen we saw a big spike in the s and p after that election, but actually considerable volatility almost all. The way through the inauguration. So I don't think necessarily that the worst is behind us in terms of the volatility that we've seen, we could still have quite a lot of it coming up in the weeks and months ahead. All right. So let's take a look at now what else is happening here are next up for our question and we're going to drill into the energy markets with another viewer. Hi I'm Patty have a question for you about Chevron. I have a lot of stock right now and I'm diversified but I would really like to get more stock a Chevron and it's a great company and I love. Chevron it's good dividends. What do you think? All right that's a big question here, and maybe guy will turn to you this one. For this one, I the oil majors especially companies like Chevron and Exxon. They could be considered some of those stocks that you want to be in. If you want the energy explosion exposure without as much of the kind of volatility that we've seen. Yes. I know that Chevron and Exxon been hit extremely hard but are they the right place to be if you do feel though energies the place you want to be A tough question and I hope this works out and Tim can speak to this is well, Chevron has out performed Exxon on the way down I mean you talk about at Chevron which going? To down current loves seventy five and we're nowhere near the lows we put in back in March whereas Exxon Mobil is actually tested the march lows and seemingly held I think out of the two of them out of the big cap integrated names Chevron has probably the better company but there headwinds for both are significant not least of which the ESPN investing, which is really been a tremendous headwind for the entire space. If given the game we play rather I would rather Chevron but don't sleep on Exxon here having traded down to that March low and seemingly bound. So keep your eyes open I would be concerned if you're looking for benchmark effects on what a close below thirty one and a half I think you have problems in the entire sector Tim Seymour. We've got you on the NBC News. Line Right. Now, let's talk a little bit about the big deal that we saw today. It was Devon Energy W PX getting together. We know that it's not exactly a strength play. It's a consolidation play. But when you look at a company like Chevron, they bought assets, they bought noble right those assets earlier on this year does that then mean that Chevron is in a position of relative strength when it comes to those larger cap oil and gas exploration and production company type names well I think you just nailed it. Relative strength is the story in for for Patio in North Dakota who's got a lot of stock she owns argue be the best integrated oil and gas name. I think in the world when you think about how Chevron Management Team has at least been forward looking in the last five years to to maintain free cash flow. For example, this dividend that I think is very much intact. Is it about you know about seven seven point two percent not the reason to go out and buy the stock and the stock that's underperformed the the S. and P. BY Significant amount over the last you know we talked about since May fifteenth where you know banks have been Platt transports outperform a lot of these integrated. Williams of underperformed the SNP by thirty percent I think Chevron is best of breed and relative to the peer. Group unlike a Devon they are dealing from strength. I'm looking at my data right now over in CNBC DOT com because of the big drop in Chevron shares, this is a stock that's now lost thirty nine percent of its value on a year to basis it now yields close to seven percent a seven percent dividend yield for of mega cap oil and gas mega name out there might go is there anything that you see in the options market or elsewhere that suggests that there's a souring on some of these names because they feel as though those dividend payments as hefty as they are in terms of yield are impossible danger because of were oil prices are right now. So I think we have seen that in Exxon but of course, Exxon unlike Chevron actually is probably going to see negative free cash flow for the year and that's one of the issues. When you see dividends that large I would encourage people who are screening for investment opportunities not to do so exclusively because you see outside dividend yields but Tim's point it does seem chevrons case that their dividend is fairly well covered. The other thing is on a valuation basis they're better one than on but. They're also trading cheaper. The company is probably about six and a half times enterprise value to Ebitda that's a full turn cheaper than Exxon is and they did a very good job basically managing their expenditures earlier this year that actually poised them for the noble acquisition that you were just alluding to. But at the end of the day oil prices, and that's what the oil integrates really are. You can think about them as basically a play on their proven reserves. The fact is that oil prices are. Going to be driven at the margins and when demand falls as much as it has done that obviously is going to keep pressure on oil prices for a relatively extended period and I expect that to continue, and of course, it's not really a long term play to get involved with the petroleum business at all. Yeah. I mean and just to kind of put a little bit more of a point on this, we mentioned that seven percent dividend yield for Chevron I'm also seeing right now what's close? To a ten percent dividend yield for Exxon at these current prices on a trailing twelve months basis certainly something to watch for their in that trade for the energy sector. Well, it's time to take a tweet. Now, this is from Joshua and he asked, should I invest in G. for a chance of a rebound guy we will go to you here for this one what do you think General Electric Ge can come and get back a sliver of that Golden Age that had twenty thirty years ago. It's not going to be a golden age stock at all I. Think what you're hoping for if you're buying G, here's your hope it gets back to ten dollars and then say nice trade and move onto the next thing. There are a lot of issues here they zig when they should've zagged. got into businesses at the top got out of G. Capital. For example, at the bottom, it's been a rough decade. A decade where a company like Honeywell has been absolutely crushing it legacy issues I mean, there's so many things to mention with that. said I mean, it's held this sort of six dollar level now for quite some time. So maybe it's putting in a long-term bottom. I'm not looking for anything more quite frankly in seven and a half eight, and if you get it up to ten, that's a bonus. But to me, this is sort of been dead money for. No compelling reason for the change anytime soon, all right Joshua thank you very much for that tweet in there for that show and that question on Ge we hope you've got your answer at a Guy Dominy well coming up on the show shares of Nike on a run this year. So should you just sell it? Just do it just sell it. Our traders will dive into that name coming up next and later on millennials have put down the avocado toast and are buying and selling stocks in addition. We'll bring you a list of their hottest trades. Stick around much more on this bonus edition of fast money's coming up after this break. Welcome back to a special edition of fast money. We are all we all know that retail is really been on the rocks lately but Nike is one of those names that's making huge strides despite the struggles the stock of the sportswear giant has soared over the course of the last week on earnings. Our next question comes from jared in Utah who's weighing what to do next with his Nike investments. High Fast Team. Thanks for taking my call. I just wanted to find out I've heavy in Nike and it had a good rally but it seems to Peter out and I'm just not sure if I should take. Earnings and trim it or sell it or stick with it. Thanks for your time. All right. So Tim Seymour I seem to recall that you've been a trafficker and owner of Nike shares. So let's talk a little bit about what you think about Nike even after the run that we've seen post earnings report. Yeah I have traffic and I am long in the Nike and it's a great question because this is a stock that's been on really such a heroic run. You could have made an argument that you wanted to sell into earnings on ordinary expectations especially out of the recovery out of their China business in the fact that. North America was coming back online. Well, what we heard in this quarter is that not only is China up significantly into mid double digits, but they also have North America that came in effectively flat down very small and that the business around innovation and some of the APP leisure trends that they're seeing frankly their crushing it s GNA was down eleven percent digital sales up eighty two in constant currency terms. This was a great. Quarter. So what's the multiple you want to put on the stock I think around these levels, I can just tell you that after that heroic run I trimmed about ten percent of the position only because I felt like I needed to I am a long term investor in this company they continue to reinvent themselves and ultimately trading around thirty times is where I think there's multiple could be and at thirty times the stock can go. At least twenty to thirty percent higher, Mike tend to seven to ten years ago. I remember covering the stock and having to look at those futures orders all the time. It's not so much about futures orders today doesn't matter as much. They don't really report them but those digital sales eighty, two percent like Tim said I mean is the new thing that we should all be watching with Nike how much they're selling online and how fast that growth is You know look it's always a positive when you have management of a company, make a forecast for big things that they're going to be doing with their business and then subsequently actually advance the ball still further, and that's exactly what we've seen them doing and digital. They've definitely moved targets further out because they've seen such impressive growth in those areas as Tim pointed out, we saw only a year on year decline of about point six percent overall on the revenue side, he did allude to the. And I think part of that obviously is the current conditions that we're finding ourselves in. I would expect to see those s GNA. Go up just a little bit. But one thing I would point out is that the valuations are definitely towards the upper end of the range that we've seen over the past decade. That's the first thing. The second thing is after those blockbuster results that we saw earnings, how is the stock behave technically not so great. Seems to be hitting a little bit of the pause button, and that's why I've actually suggested options action that people who hold the stock could think about selling some covered calls against her position. All right. So jared, if you're still listening out in Utah some covered calls and selling, those might be the way that you play. Nike shares will gentle that we have some breaking news out of Washington DC. Let's let's get straight along for the details you lawn. Don House Democrats are planning to release the details of their new corona virus relief package. Tonight I'm told that the top line number is now at about two point, two trillion dollars that's down slightly from the number Democrats had previously flirted of two point, four, trillion dollars. All of that is according to a source familiar. Now, this of course also comes as the Treasury Secretary and House Speaker Nancy Pelosi or. Also slated to speak over the phone at about six thirty PM eastern time to discuss whether or not zeal is even possible between the White House and Democrats anymore I'm told that if it doesn't look like a deal is likely, the Democrats could vote on their new package of Corona virus relief on Thursday before the House officially recesses on Friday, Pelosi want to make sure that members have a chance to. Vote on something before they go back to the constituents ahead of the election. But again, House Democrats I'm told are planning to release their new corona virus relief package tonight, and that top line figure is now a two point two trillion dollars back over to yield or along the negotiations continued. Thank you very much for the latest on that deadlock in Washington DC with Cova Relief let's take a look. At how this has more implication guide dummy I will go to you for this one here. I it used to be that trillions talked about with the Fed balance sheet size. Now, it's with fiscal relief packages. There have been multi trillions already doled out. It's possibly more than that. Coming up is this added boost the additional trillions of dollars in addition to fed trillions of dollars that can't keep this market Clearly doesn't hurt trying to game around what's going on in Washington DC. Especially, this close to election I think is difficult but just playing the game forward. Were to get through I. Think on the margins it's absolutely bullish for the market, and then you know quite frankly that's maybe why we've seen the rally. We've seen over the last week. We can half was sort of in in in hopes that something like this would get through. So it's clearly not bearish. Let's put it that way. All Right Mike Cody you hear. A. Situation where we should actively look at the election as a potential catalyst for markets and how exactly are you seeing traders positioning for it? I think the election could potentially pose a catalyst for some volatility in the markets. I think seeing some meaningful fiscal action could obviously be supportive of the markets and that's really what we're looking at is probably the most consumer oriented quarter of the year that we're entering right now and. Consumers were supported by what we've previously seen. If we see something strong on the fiscal side in conjunction with obviously very you know liberal loose monetary policy. I think we have something that could support the Marcus fairly considerably despite the risk that the election itself might pose. All right Tim Seymour, how important is the fiscal resolution to covid nineteen aid to the overall market narrative? I think for the market over the next three to six weeks it's very important. Remember market start rallying when policymakers starts scrambling We we've had this debate on the show. The Brian Kelly was one of the guys that early said, I don't think you're going to get it clearly the market's pullback function of overbought conditions and a lot of stuff that was really beyond stratospheric. But some of it was about a need for more fiscal yet the feds Powell out there basically clamoring for some type of fiscal policy to compliment monetary policy so. It's it's critical I think for Democrats to have something to hand constituents to go back ahead of elections they're going to give them something and and I think that was part of the handicapping that those that thought that there would be stimulus were saying there's no way that they can't come to some agreement although we've said that about Washington before I think this is market bullish I still believe in the Beyond this period this isn't really going to address the labor issues in some of the I think the structural issues in the economy, but it's politically important in a market that loves liquidity is GonNa take this as a rallying point. All right rallying point for sure there the trillions coming up in the Fed and Washington DC as well. Coming up next millennials are charging into the stock market in this particular stock. Yes one stock. Yep It was a clue charge. We'll uncover this mystery name and other picks. This generation is scooping up plus we'll the bullish cycle continue for shares of Peleton or is there resistance ahead tightening up that wheel? The full trade on that red hot fitness trend coming up after this quick break. Welcome back to this special edition of fast money and millennials have been jumping into the market since the lows of March, what are they buying? Exactly our own Kate Rooney is out on the west coast. She has the details there. So Kate, they've got to be going thematic here for some of these, right? There are a couple of themes year millennials we're buying up electric vehicle stocks specs a big theme we've been talking about and some of those state home stocks during the third quarter. This is according to a new study out today from apex clearing younger investors made with the firm calls aggressive moves into the electric vehicle space tesla dethroned apple as the top stock among younger investors and Chinese stock neo moved up thirty four spots in the list of millennials. Top One hundred picks were course also got a boost to moving up twenty eight spots. millennials got in on the BUZZER around specs. Or special purpose acquisition companies to electric vehicles. Backs went from unranked to the top fifty. The outlier here was Nikola which still made the list but dropped significantly in the quarter moving down forty spots to number eighty, nine stocks have benefit from the ongoing pandemic were especially popular in Q. Three, Peleton jumped forty one spots. Docu sign went from being unranked to making the top half of the list and tell doc also rising made vaccine manufacturers, visor Johnson, Johnson, and MODERNA. All made the top one, hundred they approach or they begin those phase three trials chip stocks nvidia amd also joined the party. Multiple spots across Gen Z. Millennial and baby boomers top holdings across generations though it's still all about big tech, the report which analyzed more than one point three, million investment accounts showed Apple Amazon Tesla, and Microsoft, and the top five for every generation Dombak to you. All right. Thank you very much Kate Rooney for that, let's dig a little deeper into now some of the stocks catching the attention of those younger investors that Kate just mentioned. Our next question comes from a college student. Benjamin from Georgia on question about Tom Tom I was wondering if we think that the fundamentals of the company can support a breakout of this ascending triangle pattern in the coming weeks. All Right Piton Peleton those bikes high end guy what's your take? Are you a buyer or a seller of those big fancy bikes? Though I appreciate the question. Benjamin listen. If you watch money, we've been pretty steadfast in our bullishness and Palatine and that's paid off rather significantly I. Think it actually traded a little north of one hundred today pulled back late. Still think you have to stay with the name if you're at barons over the weekend, Barron said competition in this space is actually good thing for Peleton given their lead on technology front. And I would agree with that you're GONNA get a little concerned about valuation at a certain point if you're not now but the trajectory still seems to be higher in this name. So I think you gotta stay with it on the long side. All right. So He's long guy is there on Peleton. Tim Seymour what do you think is this a stock that's overrun has gone to the to of the upside fast. Ben Nice job with the dogs over the RAZORBACKS I. DO think you've got a case where the valuation is very difficult to explain here I think you know this fitness as a service of vertically integrated. These guys are top of the heap guys pointed out the leadership position may make new entrance at least have some difficulty. Ultimately I do think this is a margin story and it's just a question of really how far they can take these subscriptions. I think a lot has been priced in but I think if you if you own the stock, you hold the stock. And hold it. There you go. For Peleton let's keep the viewer questions rolling. In next step we've got Jacob speaking of the dogs in Georgia. What's going on Fast Money Jacob Georgia here in beautiful. Athens Georgia Sanford. Stadium with this Saturday the dogs will defeat the Auburn Tigers my question for you guys. It's draftkings its position I've been in for a long time had a really big run outs on just wondering if it's worth still holding onto or if trimming position a little bit thanks a lot. All Right Decay N. G. draft kings, my coal, toss us one to you. What do you think you hear about this particular stock? Well. It was interesting in his question that he talked about holding it for a long time I, guess we're showing our age a little bit if we have to say what? What considered a long time for stock that hasn't been around a long time. This is basically going straight up right now and I think the company itself is in the right space obviously, and of course, what you're doing is you're buying the growth story because there isn't much of a story otherwise and right now the valuations getting a little bit heavy if you had stock and you've obviously seen some great return on your investment, I think you should probably be thinking about pairing at least some of that position right here are pairing that guy dom what do we think about draftkings? Is there a secular tailwind longer term when it comes to online betting and sports gambling? No question about a tim has talked about it. We've been talking about this seemingly for the last six months on the show and one thing we've said on fast money is that they could cancel professional sports tomorrow and draft kings still by because the secular shifted, you just discussed the Mike said there's nothing wrong with taking money off the table. He's one hundred percent right? I mean trimming this move is there's nothing wrong with taking ten fifteen, twenty percent off but I, think you stay with this in terms of the secular move and given the fact the headline is such that. Week or two from now, they could announce another Michael Jordan type. And MSN. Ambassador whatever they're calling Michael Jordan and that would give the stock another five percent run so. Tell wins here. Lots of like about draftkings. What happens if hypothetically you bring in Charles? Barkley is another special adviser to the board, right? Whatever whatever company it is here Tim Seymour I'm curious about your thoughts here we've heard a lot of bullish commentary on draft kings and elsewhere I, know you guys have done it a lot on this show. Is there something that we should be wary of though with regard to the moves that some of these kinds of stocks have already made? Barclay, of course who went to Auburn it's all coming full circle and outright I like draftkings long draft kings what guy and micro bowl talking about are these secular transient online sports betting. So if you. Where you start to throw multiple around this is you start to look forward when state budgets have no choice but to cave in to to gambling much in the way, they're gonNA cave to cannabis and other things that we thought were since you have a case where the addressable market is booming and it's GonNa, continue to grow. So you have to value this as a function of what will draft kings have of the overall addressable market by. Two Thousand and twenty, four, twenty five. That's what analysts are doing and if you put it thirty times even target on it you can throw a dart, you can get to a seventy dollars share price, but the valuation is very, very challenging right here for a stock that's up four and fifty percent year to date since March I should say, so I think I stayed long because I stay long the secular transient I don't see other ways. To play outside of Caesar's and a couple of the other casinos. But this is certainly a dominant way in the public markets in I of the only ways that you can have a pure play in that right now at least on the larger ish side of things in terms of market capital all thank you guys very much are still more to come on this extra hour fast money coming up next to big transportation needs on the move today. Those trades and more they are coming up ahead plus you've got questions and yes, we've got answers keep your tweets coming in. We're going to try to answer them ahead. Stick with us. We will be right back after this commercial break. Right, the countdown is on this Wednesday delivering Alpha Da is back for its tenth year. We have another all star lineup including Steven Mnuchin, the Treasury Secretary Timothy Paul Yeah Potassium Steven. SCHWARTZMAN MARY AIR TO US and more head over to delivering Alpha Dot Com to learn more about this huge event and register as well. Well, let's get back to our viewer questions. We've got a tweet on the transports. Viewer asks how high can Fedex ups an ex peo- logistics go according to your next guest. He says Fedex is headed for three hundred eighteen bucks a share here to make the case Deutsche Bank analyst, Omit Tra. He just upgraded Fedex to a by and I gotta say amid this whole idea here the transportation stocks has been massive as a Kovin trend I know that I get more boxes than I can break down and recycle every day of the week. Does that mean that this is a trend that's here to stay. Well her for having me. I think absolutely, it's here to stay. By any expert estimates ECOMMERCE demand E-commerce, market? Demand for that e commerce services is in full forward by at least three years if not for five years Fedex last quarter reported over thirty percent increase in their ground volumes to get this twelve million packages per day. Costa eight hundred million packages in the quarter and that was up like I said over thirty percent year over year both Fedex and ups are seeing. Incredible pricing opportunities we thing is, is that demand is surging and both companies are exhibiting extremely positive capacity disciplined. So you know economics one says when demand GOES UP TO COMES DOWN, price must go up and I think that's what's happening. That's the crux of the upgrade prophetic city and we've been obviously positive on ups for several months, and that's also worked out quite well. Yeah. Absolutely I was going to say great job ups but just the the other side of that obviously maybe a little late to the dance and Fedex, which is fine. I mean I totally understand that but are you concerned we're talking about a stock confetti has gone from a trough of eighty nine dollars. I think in March to the recent two, six to three level, which as you know, happen to be a prior high from about two years ago. Is there a concern that you've seen the run already obviously I know you have a three eighteen price target, but you know the way these things work. Yeah I think You know our our view is better late than never. I think if you look at our whereabouts sixteen percent above consensus expectations for the next fiscal year, the crux of the Fedex call and the reason the stock has legs and we've been quite critical of this company in the past I. Think I was on. Your show a year ago talking about the disappointments of this company when we downgraded it. But the crux of the call is this is that the free cash low going from negative over the last decade to a sustainably positive castle model and when you have accelerating growth expectations, low interest rates and accelerating for casual from negative to seasonably positive toward seventy percent free casual conversion. The multiple can go a lot higher I mean if you look at the multiple charts. His trading dramatic discount a ups double digit discount I. Think that discount is warranted given the track record of last decade plus on the free cash side. But that's the real opportunity and that's why you're seeing. More, lever, company in the former Fedex, a lower multiple, very low free cash flow, less less high quality than ups, and so that last quality is is seeing a a bigger outperformance as as the fundamentals of the business turn. I admit you know that's my co here. One of the questions I have as we go into the last quarter of the year here some of these companies have struggled as we've seen the holiday shopping season and shipping season come along, and obviously this is going to be a situation whereas compounded obviously by everything else that's going on, do you anticipate that the capacity constraints you were talking about are going to have some of the logistical bottlenecks that we've seen in the industry in years past? The Nice thing about it is, is that the problem with free transportation is demand is highly seasonal and the demand the busiest days with the last three months of the year and the nine months out of the year. Significantly lower capacity utilization which leads to pricing and discipline. The nice thing about ups and Fedex is doing they're implementing very stringent surcharges on surge volumes and we're actually seeing that start to change chipper behavior. So companies like Walmart, Home Depot or actually maybe even Amazon Day for example, there pre owning their promotions to smooth out peak and what that will allow Fedex and ups better absorb their costs know Fedex is putting in seventy thousand seasonal workers. That's twenty seven percent year over year it'll smooth out. And be able to. Absorb the structural costs associated capacity so We're quite optimistic about PT's and particularly this behavioral change we're having on chipper side with respect to pre phoning promotions to smooth out the peak season. Yeah. It's GonNa be a peak peak season this time round for sure omit Morocco, thank you very much over at Deutsche. Bank who covers Fedex and the shipping stocks we appreciate your views have a great night. Sir. Thank you are it's a case of planes, trains, automobiles. Let's shift our focus now to the airline side of things with our next viewer question. Question for you. From Connecticut, I'm used in your take in American Airlines short term long term I'm holding call positions that are up two hundred percent, and we learned on Friday that they top the five billion dollar. Loan from Treasury there's speculation there's an airline this week. and. Typically environment where stunks only up expect to help me that's diluted their shares unable to to buy back stock issued ends that it'd be going down. However, there's a lot of catalysts on the horizon you're playing it. Thanks so much. Bye. All right American Airlines part of a very controversial and hot industry right now given the evolvement of Washington DC and tax payer money and bailouts. Guy Adama, what's the trade here? Is it American Airlines or is it one of the other ones out there by the way South West. I think is the most valuable market cap airline in America at this point. Yeah I think Tim would agree with this I. Think Delta's probably I'm not saying Delta the best stock but I think Delta's the best airline in terms of how they're running in balance sheets. With American Airlines you mentioned you're up two hundred percent and your options I I'd say this and I'm not seeing after go out and do this but if you're up two hundred. percent anything if you still have to position your in the rest of it for free, that's just math and it makes a lot of sense and I think it gives you a lot of flexibility than to stay with the underlying equity I don't necessarily love American Airlines, but I love what you've done in terms of a trade and if you were to do that type of. Paring down I could give you a lot of flexibility over the next couple months. All right. That's the trade for American Airlines Guy Dom. Thank you very much for that. Coming up on this special bonus hour fast money shares of Virgin Galactic taking off to the moon. Is it time to bet on the new space race tourism style that trade coming up ahead plus Coca Cola falling flat this year on intended rally bubble up unintended or should you just can this name unintended all that and more when we come back after this? Hello this is from wrong. Thank you for taking my question I would like to know about Virgin Galactic. Purchase their share when they were trading at twenty six dollars since then it went down to fourteen and today finally bounceback who all the way up to twenty dollars what I would like to know. What do you see start going? Should I hold onto it or should I buy more whatever down or what is the forecast? Thank you. All, right thank for your question soul in Toronto. You are right checkout shares of Virgin, Galactic, rallying more than twenty five percent just today alone to, to wall, street firms initiating coverage with this particular name with what else by Ratings Bank of America's Ron Epstein one of them he was on Squawk box this morning here's why he's so bullish on the future of space. With, Virgin Galactic Yeah for sure they're gonNA watch their. Their commercial business officially opened up for you know commercial service early next year with that first customer will be Sir Richard Branson. were. Expecting that either q one q two of next year, and then away we go. So, are those shares of Virgin Galactic going to the moon here Tim Seymour you're on the news line. Ce. Is it a buy. Back, I feel like I've gone to space and come back here. So you have a case of the book as here is first of all all around just quitting and Marcus, and this is the kind of names frankly without valuation people don't care about and the market throws a a lot of capital. To us the the fundamental analysis on. This is just that there's a commercial spacecraft opportunity and there's a pep opportunity commercial spacecraft opportunity probably you know does a billion or so by twenty thirty and then according to different rose about sixty percent kager these guys are far out but again, that's far out in the future I. I recognize that the excitement around the upgrades on a day like today something that would ask people wanting to chase it but I'm not going to be one of them, and again I, think this is one of these stocks and maybe you can make the same argument about drafting other stocking, talking about tonight that are difficult valuations but this is one. That I can't chase I think is the function liquidity environment. That's not a all right. So so let's bring you in here on the near term, the average trading volume of this particular Stock Virgin Galactic about sixteen million shares today, it traded around fifty four million shares in the regular session. A lot of that is because of what's happening in the markets overall specifically ones that you watch is virgin galactic. One that we should be trying to play on the long side given a twenty five percent run today. Look I mean this is one of those speculative plays I mean there's a couple of ways you could sort of think about this. I mean one of the ways to think about it is that five billion dollar enterprise value or thereabouts, which is probably where we are and you're just going to try to discount what the business is going to be ten years from now you could say well, I mean if you're GonNa, put your money down five billion is good. It's four billion. So I don't know that it's GonNa make that much of a difference if you're inclined to play the momentum, the momentum continues. You'll still be a winter that said you are playing for something that is still some time out in the in the future you had a situation here in the stock also did have a meaningful move off those lows at this viewer was actually talking about that could actually create some profit taking and that might actually slow down that growth. Alright. So Watch out for that move after twenty five percents upside today coming up next, we are talking more about the tweets that you have. Don't go anywhere remember at CNBC, fast money send them in. We'll try to answer them live on the air coming up after this. Welcome back to this very special edition of fast. Money. Kramer is off tonight but he's back tomorrow in a very big way the CEOS of four Polaris and McCormick all sitting down with our own Jim Cramer be sure to catch an all new mad money tomorrow six PM eastern time right here on CNBC. Well, we've got time for a few more tweets. So here, take a look at this one true Ben Fourteen asks at and T. Cell or whole tim you own it at and t. what's your take? Yeah, and this has been a real underperformer in the postcode rally for the market I think be wireless business, the overall kind of mercenary. Often major players is alleviated some of the margin pressure there, and I actually think that you've seen some some upgrades and their wireless business the entertainment group and Warner media segments are a case where again it depends on how you evaluate some of the parts here and that's One of the ways in which people back. On a excited about eighteen and I think the oppose payphone has and some of the discontents are subsiding and. The the core business is very much intact. People worry about town cheaper in an environment with these guys. he's been very creative to them. So I stayed on and only. Nine percent dividend you'll all right. That's a big dividend yield for sure Mike. How do you feel by seller hold at and T.? I'd be a buyer here. I mean, I think first of all that dividend has proven to be covered I hold the stock myself and actually we're at a right now where I think that the risk reward is a lot more favourable so. By Ciller hold by it. All right. There you go by. Two Times around our next week comes was from John Out on Long Island. Thoughts on Coca Cola at this level down about nine percent from here, strong company that has reorganized recently happy with a three and a quarter percent dividend yield while I. Wait for it to go back up. Do you see a closer to fifty or sixty bucks a share by the end of the Year Guy Odometer to you? James Quincy was on. I. Think it was on this time last week with Jim Cramer and he talked about hard sellers helps hard sell tsars the growth there, and if you go back to March municipal the stock that's made a series of highs and higher lows. So technically, it's been pretty constructive I. Think you could see the stock continue to write up the fifty nine level where we broke down significantly from the the winner into their earnings release. So yeah, I think you can stay with Ko here for sure. All right stick with coca-cola Mike how about you? How do you feel about coca-cola? We've got about thirty forty seconds here for you. Yeah this one's a grinder and I think obviously the dividend is supportive of it and the stock has has got it was just talking about been reasonably constructive so not a growth stock but probably a safe one. All right that does it there for Coca Cola a couple of good look shared the buy side at least for Coca Cola will thank you guys very much for joining us for this very special bonus hour fast money remember tomorrow, Jim Cramer mad money is back CEOS. Galore some very big coming up there and thank you for sticking with us here and fast money where we took your questions keep them coming in at CNBC fast money on twitter. We love getting those questions and we love answering them live on air for you here and keep it right here because our primetime lineup is coming up and shark tank is coming up next. CNBC'S WORKFORCE Executive Council is the Premier Group C. Suite human resources executives from leading companies across the country. It offers a members only portal and chat plus exclusive industry contact with access to breaking news calls and digital networking experiences the networking resources HR leaders need now applied to the workforce Executive Council at CNBC COUNCILS DOT com slash WNYC.

Tim Seymour Pete Nigerian CNBC US Tony Tim Seymour Fed lvmh Tony Dwyer Steve Grasso Tim China Steve Tiffany tiffany Melissa Lee Mike Co Todd Gordon Tiffany
Fast Money 03/04/19

CNBC's Fast Money

45:05 min | 2 years ago

Fast Money 03/04/19

"Is your fixed income truly fixed income? Does it provide diversification income and risk management for your clients at MFS? We help advisors deliver these essentials. We call it essential fixed income, find out more at MFS dot com slash fixed income. That's my desire to right now. Live from the NASDAQ, Marcus, I'd overlooked New York City's time swear, I'm Melissa Lear traded from the desk for Tennessee or Mark Tepper. Karen, feinerman and Brian Kelly tonight on fast the market selling off today, but top strategist Tony Dwyer says don't stop buying socks. He will explain why he thinks this bull run still has legs plus FANG by bags the group holding up. Well in today's carnage into Wall Street is betting. This trade still has a lot of fight left in it. We've got the details, but I don't on today's market sell off. The Dow down four hundred points of the lows of the session having one of its worst sessions of the year, despite the US and China reportedly inching closer to a deal in a looks like bears are striking back the S and P five hundred sill up eleven percent. This year surging back through December lows of failing at the key twenty eight hundred level for the fourth time since the market high. So this is one of the few so all seen this year. Should you be buying the dip is more pain ahead to well? You gotta give the bear some food. Mel I mean, let's face it. I to say this is eight worrisome. For me is a toll overstatement. I realize though, if you wanna believe that you're selling the fact on a trade deal, and you see a market struggling at twenty eight hundred it's easy to say. Hey, you know, what maybe this is all we got. If you look at volatility today. The actually the biggest vol move intraday, then you've had since January fourth really when we didn't think this was going to go a lot higher. My view is people at that construction spending number that was out this morning on a week. When we've got we've got a ton of macro out this week. We've got the Thursday in policy mean, we've got the fed on Friday talking about Monte in a monetary normalization, and I know we've gotten everything we can out of the fed. I think markets are worried about growth, I think that's what today is it's Monday. I'm not losing any sleep right now. Does this give us any sort of belief that trade is either going to be an upside catalysts or sell the news event? I think it's a so I think today is told you it's a sell the news event. Right. It doesn't mean that we have to go all the way down to Lowes. But I think we've twice in a lot of good news. Right. SNP up eleven and a half percent roughly year to date we've seen economic data actually declining a bit coming in the surpr-. Houses, but the city economic surprise index that's now negative meaning the surprises of to the downside. So I think the market got ahead of itself with it. We priced in trade we priced in the fed not raising rates anymore this week. And so it's time to take a break. It's probably going to take a little bit time. We've had two months of a rally it's probably gonna take a month. Or so maybe it sideways action to down to feed the bears as China's upward. You're still in your both medium. Turnberry rights. Macgyver bulls. Yeah. I mean, I think what you're saying. I think a lot of it is already priced in. I thought that we came back off for the lows. I mean that was a pretty big rally off of the lows. I think you know, I'm long I do think we'll get a trade deal. But I don't know if you saw my performance on the closing bell of myth. I was saying the market is pricing in by rumor sell the news, but it isn't pricing in a hiccup in this deal. And they keep saying we're on track. We're more on track even more on-track. It wouldn't be surprising to see how the Trump administration negotiates. If we did see a hiccup in this deal in the Margaret will be lower than it is now. Mar-a-lago at the end of March. Right. I mean, I don't know. I don't know what the market considers a hiccup or dealer was. I mean at this point. I think you know, a, obviously a trade deals being priced in. But the question becomes is it going to be a good deal or just in okay deal? And quite frankly, it's it's okay for the market to take a breather. I mean, this has been a V-shaped recovery. It's been very very fast recovery over the course of the last two months yet. We're up eleven and a half percent year to date, but we're also up twenty percent off the Christmas Eve lows. And when we look at the different indicators that we watch nothing is signaling to us that there's a recession until at least the second half of twenty twenty maybe even twenty twenty one as long as the fed stays on pause. So, you know, we think the market definitely has plenty of upside from here, the quandary though for a lot of investors is no recession doesn't necessarily mean equity performance. Right. We not we saw last year. Right. Very difficult year. No recession it does. Although if you want to look at where the s&p was going even into obviously, the highs. We hit in September before the market really started to to get concerned about the trade deal. It was happening with at least slower spending slower cap ex some expectation that actually the world was slowing down yet echoes moving higher. I think I think we have an entirely re calibrate our expectations on earnings growth. But the reality is I don't think people are expecting earnings growth anywhere near the seven percent. We started the year. I think that's bullish for the market. But more importantly, I think this is where you go after sectors right now that have continued to defy either. What people think are fundamentals defy logic or defy basically, gravity in the case of energy, you keep buying look at those numbers you had to OPEC in terms of production looks like OPEC for. So those are four and a half year lows in terms of OPEC production last month. I think it's still the most shorted sector out there. It's not going to be something that necessarily you hang your hat of the market on. But this place is to invest, I also think that the industrials continue to get a reprieve, and I would be buying Europe, which is massively under tip brought up energy, which I think is a great point because the dip you wanna buy is when oil. Ios hire people start worrying about wait a second. The feds got to come back in because we've got inflation because energy prices are rising. And maybe the economic news, isn't that good? And the trade deal isn't as good as we thought that's the dip. You wanna buy not this particular dip? And the reason why is all those things will ultimately get fixed. The fed will be on the sidelines. The trade deal will get something done there and OPEC it's fine to have high oil prices. But at some point they price their customers out of the market, and they'll lay off. So I agree. I think you can buy energy here. But nothing else until you get that real negative dip. Are you buying right here? Well, acid be puts that would be the only thing. I like what I own. I think there is some risk if we don't see a deal. But I do think we'll see the thing is even if we see inflation. I don't think the Fed's going to do anything, you know, they talked with being patient, which is different than being dated dependent. Data dependent is will react to the data patient in my view is we won't react to the data. So I'm not afraid of inflation. Right. What? What's? Software companies that have pulled back. So we saw you know, Salesforce ahead of earnings pullback and these software companies in particular, they really help businesses to become more efficient more profitable. And at this stage of the game, you know, late cycle. That's what businesses wanna do. They wanna be more efficient. They wanna be more profitable in. These software companies. Most of them are generating recurring revenues, and there's no revenue better than a recurring revenue. Are you concerned about their guidance for the first quarter, which is what's taking the stock down? You have a guidance has been low pretty much across the board. I mean, you look at just about every single company in the s&p five hundred. I mean, all of guidance has been pretty conservative this quarter marker, you worry, though, that that some of these higher multiple stocks like software companies have been the ones that have been most in the kind of the target of the market that has been comfortable buying value, frankly, and I think that to me is safer spot. Yes. So I mean, the the multiples are high, right? So but not all companies are valued the same. It's not always about a P E multiple as an example. There's there's space. Value drivers that can help accompany to command a premium multiple, whether it is recurring revenues or stickiness of their customers. Those are all justifications for a higher multiple. Let me just push back as a value oriented. So one of the metrics is growth, right and accelerating growth or not not flat growth or not declining delta on right? And so sales force which is what a great numbers, and the guidance is really good also. But if you don't see an acceleration of growth, it seems to be priced for that is, you know, getting to really push back on that. So mommy, look at companies in general when a recession hits us a lot of those companies are going to watch their revenues fall, in my opinion, Salesforce. I mean, that's going to be one of the last expenses a business is going to cut because it helps them to run the engine of their business. It helps them to be efficient. It helps them to be more profitable. So I think there's an element there that really helps them to get that higher valuation because they're recession or their revenues are essentially. Opinion, close to being recession. How much do you want soul to you? I mean, I think these are going to get killed. If you have an I'm calling it inflation scare want to be careful that I'm not saying there's going to be massive flation. I'm saying we get oil going higher. You get a fed. That's going to be worried about inflation market. That's worried about inflation high multiple stocks will get killed in that environment. All right. Let's our next guest says don't fear the sell up keep buying stock. Let's bring in Tony Dwyer chief market strategist at Canaccord Genuity. Tony welcome to you. Thanks for having me. Mom. We were just showing this charter the S and P five hundred in trouble. It's had around twenty eight hundred why are you so confident that it's time to buy stocks to keep stocks. You know, I I also agree that there's a possibility that you could have a little bit of a pullback, but really what you have to do is put it in historical perspective when you have the kind of breadth thrust that we've had so about two weeks ago, you registered ninety two percent of stocks in the SNP above the fifty day moving average, and it sounds real technical, and it is. But when that's happened in the past. You've always had a gain over the next six to twelve months with a minimum of nine percent at some point between six and twelve. Months, but that I don't think is the biggest point mall. I think the biggest point is what's the pullback after it happens. Because obviously to have that kind of an extreme you've had a hell of a run. So what's the initial? Oh my goodness. What boom it's a median one percent drop, even the two bigger ones in two thousand and ten in two thousand thirteen of seven and four percent, respectively came back within the next two months and made money. So it's not that you just going to go straight up you want to know what to like, we covered on the last show when I came back to the set you want to know that the pullback can be minimal. So that you can actually buy instead of fear it, so basically the risk reward. Is there given the average performance we have this breath up versus a median downside seen. Let's throw a little fundamental stuff into a to like every the biggest fair here from institutional investors is well earnings. Estimates are coming down. And the economy's slowing how can the market go up or you pay more for the market when you have such decelerating earnings growth and estimates are coming down. Well, two thousand sixteen you started in the year on January first two thousand sixteen with that's NPR's rating profit expectations of seven point six percent. By the end of the year was zero point six percent. And obviously the market went up. And then it went up twenty percent the year after that. So I think we have to be careful to be, you know, people get negative because the economy's too hot and the feds going to be tight, and then they get negative because the economy's too soft and earnings coming down. It's all about the fat you like sectors, financials industrials and information technology. We were having a debate here on the desk. And I think people are having this debate every day growth versus valley, and you can find growth, and you can find value in each of these sectors, basically, Tony. That's right. So what's your tilt, well market view? I mean is it is it is it obviously grow offense versus defense. Okay. I think we play offense for I actually I think you could have traded upside trade and some of the materials in energy names to Timmy's point earlier. And here's why ever if you look at any purchasing manager index globally. There are a disaster. They're all. All coming down. However, if you look at the success, you'll data they're getting a live the bouncer inflicting off the low. It's almost the opposite of what happened in November two thousand seventeen when you were a huge peak. You were surprising to the upside. And the city group economics price index that was the time to be a seller of those deep cyclicals kind of the reverse is happening here Korea. Taiwan pm is last night three and a half year lows. So I talked about the massive week for for macro. Whether it's Feddie CB payrolls Friday to your credit, your guy that comes on this show and his very consistent. I I love that. What could happen this week to change your view with so much macrumors or anything that would change that the only thing would be if you get some kind of sign that the fed is going to be super hawkish what scared me in October. And we did a show on the correction in very early October. It's not gonna come out and cheaper hawkish after being super dovish. Correct. Like, I get the permeable mantra, and I have been for ten years. I've been horrifically wrong three times with three declines of over fifteen percent. But they've proven to be very temporary like the two month when we just had because the fed is okay. Because credit is okay. The Barclays total. High yield total return index is at a record high. You know, it it changed that fast. You're getting a slightly steepening of the two ten yield curve and banks are lending. So you don't need to see me from the EC or what are you expecting? And if the big Karen of the game any kind of indication that they're getting tighter versus easier with a PM is you would wonder if it's two thousand eleven again. Were soft seriously seriously? It's like bananas if they get any kind of tightening. I really the only thing that investors truly have to worry about from a time perspective that I'm involved with intermediate term is if you get what you got the end of September and early October a fed policy mistake and a communications air on the back of it. Right. Tony good to see you. Great trip. Thank you very much. Yeah. Canaccord with Tonio fed driven market, which we've had for the last ten years, you have to be long and bullish until they decide that they're going to be hawkish. And so we what we saw a massive reversal in the fed. I do think there in the midst of a policy change trying to describe how they're going to change that policy and that could create some scared could create some concern. They haven't done a great job communicating yet. But short of that until they actually have to raise rates until we get some reason for them to really have to go on a rate tightening cycle. I think you buy the really scary dips. It was amazing. President Trump is criticizing drone pal. Even after this. You could go after the guy now dental. All about being patient patient patient patient now. Now. Excuse folks at home drinking orange, yet, the trades that I think continue to we talked about energy member China over the weekend. Also said they're gonna have a ninety billion VAT. So basically a tax cut another one. I think the rest of the world the data points for now have actually you're seeing some basing. And I think we have a lot of data out this week as I talked about. But I think the EM trade continues to work the energy trade continues to work the ad commodities trade contingent. Remember, if we get a little inflation. That's good for these equities, not bad. All right. Still ahead healthcare under attack. It is the worst performing sector today. And so far this year is everything from regulation to the upcoming election hits the stocks is this sector becoming a no touch. Plus, check out chairs Salesforce thinking after hours how giant reporting earnings moments ago with how you at the CEO Jess told Jim Cramer and later FANG bites back the softer holding up to fight today. Sell off, we'll tell you why Wall Street thinks this trade still has a lot of fight left of it. We're live from time spare in New York City much more fast money right after this. Hey, I'm John Harwood host of CNBC Speakeasy podcast. Listen into my in depth conversations with political decision-makers, folks. Like, John Delaney, the first declared democratic presidential candidate for election twenty twenty along with Senator Sherrod Brown. Senator Elizabeth Warren and Stephanie shrieks of Emily's list. Those interviews and more on the Speakeasy podcast. Subscribe today. Welcome back to pass my healthcare. The worst performing sector today. And so far this year as a number of headlines rock the space stroke provider. Eli Lilly and all time high this morning after announcing a half price version of its most popular insulin drug Huma log. But that's the end of the day down a percent. Remember back in February two senators had sent a letter to ally lily as they began an investigation into insulin prices in specifically, they singled out Huma, log in the price increases. They're also dialysis providers in the spotlight today on reports that the Trump administration is looking at cut down on costs by turning away from Moore clinic based treatments for kidney disease. Patients patients to home dialysis in all this is Washington debates a Medicare for all plan house. Democrats veiled it last week. And despite the cost of the program undermining its initial popularity it's been weighing on a number of managed care stocks like United health and Cigna. So are all of these unknowns turning this sector healthcare into a no touch. It is an ad in there that proof armor. Over the report that they're going to possibly file for bankruptcy to protect themselves from the Oxycontin lawsuits that hit Mallon Qrat that hit Endo pharma today. So from every single angle these stocks are getting hit I think it'd be very difficult for many pharmaceutical companies to raise prices, given the political environment, and then adding onto that the only thing they can really do to grow is probably by some of these more speculative biotech company, so for me until the dust settles here, I is absolute no touch. It's obviously was a haven a safe safe place last year this year, not so much. Yes. So I would be I would be sticking with the companies that have a more diverse revenue base like Merck. So take Merck as an example, seventy five percent of their revenues are coming from classic bio pharma, but twenty five percent comes from vaccines and animal health beyond that, they're they've you know, they've got a great pipeline. They're number one in face three right now. Face three trials in Keach fruita is one of the the biggest baddest. Immuno oncology drugs out there, and it's expanding right now. So I think you have to be selective. Well, I think if you look at the sector also there's there's names like lately, which which has been a monster. I mean lillies move seventy five percent off the lows, basically all we back the last summer. So it's not as you know, these stocks happened had a good run in many cases, relative to themselves trade somewhat expensive. I think healthcare is continued to be if it was twenty sixteen like that market that Tony was talking about. I'm not good by the guests, by the way, not bringing back. He's literally. Joe put with the point is that in two thousand sixteen what were the places that outperform healthcare out-perform because he had EPS growth twenty to twenty five percent across the sector. I actually think that people have discounted a lot of that. And there's been a major run, I think you can pause. I'm a little afraid of any of the pharmacy benefits managers just think that is just coming under such scrutiny and anything that's been that not transparent. Right. Is you can't go to the street and ask somebody what a pharmacy benefit manager is. And they probably say the guy who Jack up the causes jacked up needs to become that mainstream. Is this point, you know, that would be a name like CVS, which also I think the double whammy of of Amazon is going into more stores. Duda. Beauty care and skin. You know, that's not good for CBS. You know, Express Scripts merging with Cigna, those I'm afraid of that business don't wanna own that business. So it's not. I mean, you're also in the hospital providers right anthem anthem for awhile. I mixed feelings about it. I think I've just sort of fallen in love with it because it's worked and. That's a terrible terrible. It's PSA. That's terrible reason don't account don't fall in love. Now, you're still, but you're still in it. I'm still hearing. I'm still hearing. Making the same mistake that you're currently making. Yeah, it's like someone's really has drug promises. Don't start taking drugs. It's terrible for you. Rwandan healthcare. Biotech stocks head on over to ETF, edge dot CNBC dot com. I'm Melissa you're watching fast money and CNBC. I and business world live. Here's what else who's coming up on fast. Running up. The Bank bulls mo- street is going full bull on the beloved thing stocks. We'll tell you why some of the top analysts on the street think this day does more bite. Plus, where's your car, dude? Wish my car. Well, a lot more people might be asking that question. Dude. We'll tell you why the auto stocks could be facing a major roadblock. And it's not for the reason you think as much more fast money right after this. Can your fixed income stand the test of time markets change, but the role of fixed income, and that's why for more than forty years? MFS? Stay true to our traditional approach. We call it. Essential fixed income, find out more at MFS dot com slash fixed income. Welcome back to pass when the Amazon on the rise hauling big upgrade upgrade from every today. This is the majority of the names also holding strong amid the sell off in the broader markets for more. Let's go to bop Asahi down at the new York Stock Exchange. Hey, bob. Hello, melissa. Good to see you as always Amazon had another strong day up more than one percent on heavy volume as ever called ISI up its price target to nine thousand nine hundred sixty five dollars from eighteen hundred dollars. Also, helping today Wall Street Journal report that the company was planning to open grocery stores that would be distinct from its whole foods brand to Amazon is now back above apple in second place for the largest US companies by market capitalization with the value of eight hundred and thirty two billion dollars there Bank. Stocks are having a great year, by the way. But by Netflix up thirty one percent, huge move in January Facebook twenty-seven percent Amazon up thirteen percent and apple and alphabet both about. Eleven percent. But many strategists think there's even more upside and that FANG will continue to outperform the rest of the market now analysts have an average price target for Facebook of one hundred ninety five dollars. That's almost nineteen percent higher than its current price. Twenty one hundred and twenty two dollars for Amazon that's about twenty six percent higher than the current price. Four hundred dollars for net. Flicks. That's fourteen percent above its current price and thirteen hundred and forty one dollars for alphabet. That's seventeen percent above its current price. These estimates are well above the average analyst price target of about three thousand for the S and P five hundred twenty nineteen. That's only seven percent above its current prices. See the FANG stocks way above the market average is so why all this bullishness for FANG growth is still very tough to come by on a global level. And the one thing most of the FANG stocks do have is growth when growth is very hard to come by investors will pay up for growth eve. Even if the price is drive companies into bizarre valuation levels, like the sixty times earnings multiple for Amazon or even worse. Eighty seven times twenty one thousand nine hundred multiples for net flicks back to you, Melissa. All right. Thank you. Bob Bassani from the new York Stock Exchange about was mentioning the high multiple stocks. Karen, you're into stocks that could be argued are actually values stocks in thing. Facebook and alphabet, right, right. Well, Facebook as we know has had its idiot syncretic, not totally just to them, actually. But I think it's still attractive at a very nice bounce from the bottom. I think alphabet is actually even more attractive. I don't know why it hasn't gotten more of a lift from from lift from Waymo from all the focus on autonomous driving and their rest of their business is fantastic. What I mean? It's it's an extraordinary cash flow generator. Only my only beef with them is the lack of any significant buyback what happens though when the markets up. You're just scorching high multiple star. I was behind multiple stocks without growth. That's the problem that you have. So that's why I would like something like Amazon where we're seeing a lot of growth Google's kind of interesting. They got multiple levers to pull lever yet leaving. Colts bridge. That's what that's what the British sag nonetheless, Amazon, I think is the play here. It's got growth, I understand that the very high multiple and people don't like that. But nobody's really cared about Amazon's PE for the last ten years. There's a couple incidents here. And there where we get worried about it. But they can they have levers that they can pull as well. Yeah. I'm gonna take Amazon as well. So I'll agree with sales the levers. Yeah, I'm gonna take Amazon we'll talk multiples of the four FANG stocks. They actually have the lowest price to sales though. And really the the part of Amazon's business. I'm most interested in is the cloud right now. It's only eleven percent of revenues, but it's growing it forty to fifty percent per year in what we expect is the cloud usage is going to double over the course of the next two to three years, there's more and more data. And in fact, ninety percent of the world's data has actually come from the last two years. So that's how like high growth is industry is so I love Amazon here, but we're getting psyched on FANG right now, we shouldn't everyone at the start of this. Show should have been pounded the table on the market because if this has all been happening without the participation of FANG largely outside of Facebook. And and and the maga- bottom on his people should be loving this. Let me let me pound the table with Karen on Google to me. This is the best combination of valuation. Look the top line growth is still absolutely fine. Youtube is growing I think it definitely mitigates the margin pressure. And I think there are by backs coming. I think actually this is a stock with more levers to pull than any one else in the markets in the best way to plane play the space. Let's go out to charts with Ari walls of Oppenheimer over at the plasma area. What are you looking at? I'm melissa. Well, let's start with the market here. We the downtick today. I wouldn't read too much into it. Now, what is interesting about the move in the five hundred current at an important resistance level at about twenty eight fifteen that was the November peak? However, we think the emphasis should be on the big picture recovery. That's taking place because of the very str-. Wrong internal breadth readings that we're seeing for instance, the percentage socks on the NYSE above their ten week moving average that's about equivalent to a fifty day moving average recently topped above eighty five percent for really the first time since March of twenty sixteen and I think you can see similar behavior as we saw in that 2016 period where after the strong run off the low the market move sideways for a few weeks to a few months ahead of that strong uptrend. I think that's what's at play history would support that as well. Let's look at the Ford returns based on that indicator. Looking six months out on the S and P five hundred first off for any six month, period. The average gains is six percent, excuse me. Four percent. That's the horizontal line right here. Now, it is good to buy oversold when you're buying when there's very few stocks below the fifty day moving average, it tend to have above average return. But look at this returns or even stronger, six months out when you're buying very strong overbought readings when you get get to that eighty five percent level so history going back to nineteen sixty seven would suggest that the breadth readings were seeing historically followed by above average returns and the upcycle. I like Tim's point here. Not only are we see in this strength. We're seeing it without some of the biggest stocks in the market for us Amazon and apple as well really haven't participated. Here's the Amazon's a chart more or less underperformed over the last five months, and now we're starting to see this decline, become less bad. It's building a base VN created it reversed its downtrend. We're recently. It's also moved above. It's one hundred moving average. That's the most latest data point. I think as long as you're sixteen hundred the place for a breakout to the upside you still haven't completed the space. I think you get it above seventeen seventy Amazon after that big run finally tactical play again. He was also asked to chart net flicks. Here's one that's a little bit more extended off it's one hundred day average. But nonetheless has reversed its downtrend has made higher highs. We like it for the long term. We think these high growth companies do indeed lead the market higher in this low growth world, and I think net flicks become attractive as you start getting down to three twenty five say spoke about half of FANG being in a good spot area. I mean, how the other half of hanging of and if they continue to stall, and then you can throw in you know, hearts of Dan's mega-trade, really the Ag of the Makah Akron. Crosstalk? Saw. Did create that acronym in particular. But I mean, if we see this sickly if we see the stall of these stocks outside of the two that you've highlighted or good spots. Chart wise. Can we see the markets actually go higher? It's more than just these two. I heard Cairns fundamental pitch on alphabet. Yeah. Arts are aligned eleven fifty get a break out there. That's a clear shocked at thirteen hundred Facebook is the one I'm a little bit. I think needs more work to be done. I think it is in the process the basing. But for the most part, it's FANG it's the entire market very strong breath in the market here. All right airy. Thank you airy walled off and Heimer who likes what areas selling here. I liked growing with me that part. Oh, yeah. I think we all agree. He through which is smart. I tell you what on Netflix. This is a company that actually hit their all time highs in June of twenty eighteen is actually underperformed the s&p by fifteen percent. So, you know, you hear me talk negatively about Netflix because you know, I've been wrong the stock a long time. But I tell you what I think the valuation at some point people started to understand there's only so much growth you can price in there and all of them that's the chart again under performing the SNP by fifteen percent since last year. That's I don't think people know that Facebook's the one that concerns me, so, you know, on a valuation evaluation standpoint, it does look cheap. But my issue with Facebook is that they've really diluted their advertising platform. So they got rid of demographics. And it just makes it more difficult for businesses to get to the right consumer thank growth doesn't the growth doesn't substantiate. What you're saying? Right. I mean, there's been that was massive quarter sharp you get to come. And you think it's not priced in enough. She'll from a digital advertising standpoint. I like Google much much better than Facebook. I think their platforms better. Yes. So if I had to pick one or the other. Yeah. But one thing I would say the market Ken, go sideways to down and thank rally. I mean, we've seen that we've seen that already just pointed out that we've had this kind of sideways action here yet the market has ripped. So I think you could see rotation we've seen multiple rotations. You see rotations out of some of the higher the stocks like the materials healthcare that we saw today those type of things getting out of that. And maybe getting into these higher growth areas, you see the SNP go sideways down, and these stocks FILA had here's the fans. Here's the fans force their thinking after reporting earnings today CEO market, Betty off just both to mad money. Jim Cramer will bring you the comments plus car. Trouble is monthly auto payments. Hit record highs interest rates on Car Loans are soaring is this the beginning of the auto apocalypse malicious, Wayne when fast money return. Welcome back to pass one. And we've got an earnings alert on Salesforce Asakusa lower on the after our session. Let's get to DD ROY for all the details. Hey Di hi there. Melissa shares are sliding on a weaker than expected earnings and revenue forecast Salesforce guided for Q one revenue of three point six seven to three point six eight billion dollars. Analysts were looking for three point seven billion. The company's Q one PS forecast was sixty to sixty one cents three estimate sixty three cents chills. Four full year guidance was in line with expectations in an exclusive interview with mad money chairman and CEO Mark benef- telling Jim Cramer his outlook remains sunny. Here. We are coming up on a year that we're going to do sixteen billion in revenue that far exceeds my expectation, I still have never been more excited about Salesforce than I am right now. And when I look at the short term, you know, I see twenty billion right around the quarter. I see thirty billion right around the quarter. In fact, we initiated a four year guidance today Jim of twenty six to twenty eight billion. During the call co-ceo Keith block also talked about the meal, soft acquisitions something analysts had been looking for. He said that the deal is creating value for customers like SunTrust and Unilever adding that Salesforce forces also hired an additional four hundred and fifty meals soft employees in fiscal year two thousand nineteen and nearly triple the mule soft architects driving customers digital transformations Melissa bacteria, a DD. Thank you, a ROY. So Q one fall short a little bit full year. They're sticking by. So they could make it up in the next three quarters or so, Tim, what do you think? I am not surprised to see this move. The comp was ridiculous. I mean, that's the biggest issue, but you know, everything you read in a couple of the houses, actually, deep dive in terms of challenge checks with their core partners, and people are very very appreciative of the service and actually the demand fulfill the underlying services, I think they're barely able to fill. And that's a good thing. So demand to me for the product continues to be very strong its valuation story to comp story. And I think there's you know, the stock you said. This before but not you. But I could have someone could have said I don't see the stop doing a lot in the short run. I I don't see a catalyst for but far from broken you like it. So who is Salesforce winning at the expense of in your view? They're winning at the expense of I guess just high other pie expenses within a business because the entire gist of sales forces just to increase the efficiency of a business. I don't know if that is employee's or what it might be. But I mean, they are increasing the efficiency of businesses by just making datum works outside necessarily an oracle or right there without a doubt the leader in CRM services right now. So the problem you have a Salesforce is this the growth of the growth, which is a little kind of crazy, Wall Street thing. But it's the slowest year on year growth since twenty ten Wall Street was expecting just kind of going just going hockey stick style. And you're up sixteen percent year dates with the stock that got ahead of itself. If you get some sort of a correction, you're going to get a chance to buy the stock. It's probably going to be closer to a one forty lev. Than the one fifty something. That's trading. Now software are you are you in Microsoft? I'm not in Microsoft, and I regret it terribly. It's been an action plan to be. I mean, look at something like, Salesforce what a great business. They have. I just can't get comfortable with those metrics. It's just for somebody else's certainly wouldn't short it. But I can't get long, of course, don't want. You. Don't wanna miss Jim Cramer's full interview with the CF Salesforce. Mark fanny off that's at the top of the hour. Coming up new cars, breaking the Bank for consumers as interest rates on loans sore to decade highs. We'll tell you what it means for the auto SOX, plus retail reeling today made another busy week of earnings for the group and there's one name. Traders are betting clicked plunge even more you've got the details. Invest money return. Welcome back to bass money and auto apocalypse could be on the horizon is interest rates on Car Loans, hit the highest level in a decade FILA bows in Chicago with the details fill Melissa vision comes a huge surprise given. What we've seen with really all interest rates in a variety of areas. Take a look at the data in terms of what's happened over the last five years with auto interest rates right now the last month, February was six point two six percent compare that with last year and compare that with five years ago, there has been a dramatic increase in auto loan interest rates as a result. People are looking at end will auto sales in they're saying is it possible that we will not see a fifth straight year with auto sales topping seventeen million by the way. Most on Wall Street have forecasted the rate to come in between sixteen point five and sixteen point eight million vehicles. And that's the reason why when you look at let's just look at the Detroit three automakers with the exception of Jeff. Motors over the last year of these stocks really haven't done anything and GM, by the way, it's only getting benefit because of its collaboration or its subsidiary. I should say with cruise automation people are saying, look, we think there's something to grow on their. They're not getting much credit for the fact that they plan to improve profitability later this year. And when you look at the auto dealer, stocks they are also suffering from the perception that we're at peak auto, and therefore people are not going to be buying as many new vehicles. They totally discount. The fact that these guys make the bulk of their profits either through service or through the sale of used vehicles. Oh, and by the way, when we're talking about used vehicles, even those stocks are under pressure carmax Ravana. There's no love it. All right now in the auto sector, guys. The general feeling is that you have to see these guys manage profitability during a recession and until that happens. I'm not sure these guys are going to get much credit. Really General Motors is only getting credit because of its subsidiary cruise in the. Essential there, Melissa, otherwise, nobody has much love for these guys. But in terms Philo of why these rates are going higher for mortgage. For instance, we haven't seen a huge rise at all interest rates seem to be very very contained. So is part of what's going on with auto rates that delinquencies are jumping. I mean, what are there other factors involved? Well, there's a couple of things here. One of the big factors is that automakers and auto dealers used to offer a lot more zero percent financing. Let's say two or three years ago, then they offer. Now far fewer offers for zero percent. So as a result when you look at the averages, they're moving higher, that's one of the factors. That's there. Got it. Phil. Thank you. Phil abo- joining us from Chicago here, you two are in auto socks. Are you concerned my concern? No, I made when he said they're not getting a lot of love that is certainly true. And we've been talking about for a while. And even though autos have I believe peak GM still is really running the business. Very very profitably note. Seems to carry traits under six times earnings which to be is not a peak multiple for. Sure. Right. And it has I don't know three babyish dividend yield maybe a little under that. No love, but I'm sticking with it. I think she marry bars. Doing outstanding job. I I don't think you could find an auto stock anywhere other than tesla which traits in its own stratosphere. That's not been trading a peak auto. I mean, look at the Europeans look at the Americans GM's got nothing for five years. So and frankly, we've been hearing about peak auto for two or three. So to the extent that people might have been starting to price set in GM for a few years broken record agree with Karen five point eight times. Freshly updated twenty nine hundred numbers are gonna make six seventy five share North America's kicking China's absolutely fine. GM financial is gonna make forty million dollars last last quarter Europe is a mess, but they're getting out of that business and filters talked about how can you navigate in a downward cycle. I think GM's giving you everything you need where are you in the auto trade hub so far as autos Gill as vehicles, become less. Affordable more people are going to opt to fix their own car. So we like the. Auto parts retailers. So you look at a Riley, autozone. Advance auto parts you've seen great earnings out of these companies lately. And if you look back to July two thousand seven until July two thousand nine the s&p was down about thirty eight percent over the course of that timeframe O'Reilly was up four percent over that same span the problem with the big automakers they can't get out of their own way. I think that has to do with the fact that this is an industry that is also being disrupted. We know that mobility is changing people aren't buying the Tobia habits millennials are very different than they were in the past. Oh, it's it's not to say you go in short GM and anything like that. They're at great valuations. It's just the what's the catalyst going forward in terms of the interest rates going higher. We did see a slight slight uptick in junk yields over bonds in the December period when we had that stock market selloff with consumer credit at all time highs at the margin, you're gonna go see some delinquencies. I don't think it's anything to worry about with autos. I'd be much more concerned about the fact that people don't want to buy three. And I'm sitting in the garage anymore. All right coming up target shares of double digits this year one traders betting, the rally could unravel when a reports earnings tomorrow. We've got all the details. We're live at the NASDAQ in Times Square much more fast money still ahead. Welcome back to pass tick chairs of target pretty much dead. Even with the extra t in the five hundred so far this year. But some traders think the company could miss the Mark when it reporting smart, let's get out to my co intend Francisco the options action. Hey, mike. There. Yeah. So about halfway through the day today. We'd already seen about double the average daily options volume by the end of the day. We saw actually over three times the average daily options him, the high volume that we saw in the call some people might take that as being bullish including some able seventy eight calls that we saw, but it wasn't necessarily a lot of those calls were sold in one of the traits that I was looking at that basically is technical options. Traitors thinking about for earnings was a purchase of the weekly seventy puts. We saw thirteen hundred of those trading for about a dollar ten buyers of those puts are betting the target is gonna fall below that seventy dollars strike price by the amount that they paid that indicates that the six percent implied move that we're seeing the stock is going to be to the downside, and it's understandable. When you take a look at the last quarter's earnings for target. It has moved about six percent and five of those eight quarters we've seen significant declines averaging about four and a half percent move to the downside. So that probably explains some of that activity that we're seeing today carrying on the stock. I do on the stock. I mean member last quarter this traded off sharply. And I thought it was very much over done it's cheaper than that. Now. I think the valuations attracted the the big question morning. We'll see his is is the evolution in their business with ship is the Lucien their business really going to hurt margin. Are they going to be able to skim the right? Yeah. Yeah. We seen that time and time again. Yes. This is the metric people will focus on most for them to my one, and you know, just purely from trading it is at risk right because back in January tenth, they reaffirm. Their guiding said comp sales were good for the holiday season. So now the question is is that as good as get a lot of it priced in. So I think it's smart move buying puts on this. Target doesn't excite me. There's just not enough growth in the company target, then one I'd rather be in Dollar General at this stage of the cycle. They're going to see an increase in store traffic right now, they're in a lot of rural areas where there's not much competition. So I like Dollar General stage. I guess to me the entire space is not a place. I wanna be I'm worried about. Yeah. Well, no, all of either broadly. Well, I mean again, target WalMart, even Dollar General. I think if we were we've been talking about the consumer tonight implicitly, and every conversation, if anything I think there's a lot of headwinds here that if anything would be in those stocks, but more importantly, there's so much competition. We're so over stored Amazon is competing every day in the core. Businesses of every one of these guys because of that trillion dollar consumables market that that I think that they really have the driver seat for. So I I like target relative the WalMart. But I really don't need to be any of these names if I'm going to be in kind of big box. I'll be invest by being Home Depot being lows. Those to me are differentiated business evaluations valuations about labor costs Mark when it comes to Dollar General, which is soon has very very thin margins the price point that. Absolutely. But I mean, they're doing such a good job managing their stores there there when you look at them versus like dollar tree. I mean, the amount of revenue they're getting for storage is so much more significant. So yes. I think you know, industry-wide it's an issue but them more insulated. Walmart's one for me that I would sell sell it once and then when I'm done with it. I'd sell it again. It looks to me that got very extended the good news out on that one. And I think you get out of all right? Thanks for the action. Mike Cohen fan Francisco from rock action. Check the show Friday thirty PM eastern time up next final traits. Quick programming note here. Tomorrow closing bell will have three big airline execs on from south west delta and United all kicks off three PM eastern time right here on CNBC time. Now for the final trailer go around the horn, Tim seeing what he say she'll tonight on peak auto, which I think is really again a question more of where's the consumer? But but in terms of the that, I think are in the best decision execute and do have upside in terms of Thomas, also, I think GM has levers to pull as relate capital allocation, back to investors actually gonna be raising their dividend free cash flow GM, I like it. Mark Tipper the cost conscious. Consumer means good stuff for the off price retailer. So I like TJ Maxx chairwoman. Yes, we talked about today. We talk about paying value its biggest position alphabet. I think doesn't get beloved deserves. Poor. Sure. So many great businesses hopefully with autos, we get some of that unlocked. But even without that, this is per business levers. Levers is the metric term, and that's what people don't understand. System. You say levers if you want leverage in the market here checkout gearing, you can check out Teo T S P Y that ratio hit levels that we haven't seen until December. All right that does don't move. Matt money starts right now.

Amazon fed Salesforce Melissa Lear Tony Dwyer Facebook GM China Jim Cramer Karen Tim MFS New York City CNBC Netflix Google Europe US
Fast Money 03/20/19

CNBC's Fast Money

45:23 min | 2 years ago

Fast Money 03/20/19

"What if when interest rates rose your portfolio rose to the occasion, active income investing from Franklin Templeton reach for better? All investments involve risks Franklin Templeton distributors, inC. A right now why the NASDAQ market sign. Overlooking New York City's Times Square, I'm Melissa Leo. Traders on the desk or pizza, Jerry and Tim Seymour. Brian Kelly died Dommie checkout. Shares of Micron. That's Acas volatile after reporting earnings moments ago that conference call is underway. We'll bring you all the latest details. Plus top strategist, Tony Dwyer says almost nothing will bring this rally to a screeching halt. You will explain why he is so bullish as stocks reach for all time highs, but we start off with the market stocks sinking. As the Federal Reserve saying that rate hikes are off the table for the rest of the year after a bit of whiplash. Ultimately, ending the day down nearly one hundred and fifty points. Take a look at some of the big movers. This is what really what we want to focus on the dollar. Got crushed. Choose five spreads taken a dive at checkout. Also, some of these sectors here tech stocks real bright spot than financials the big losers down more than two percents. So it's kind of like a game of choose your own adventure. Look at these charts and tell us what they are telling us about the markets. About the fed decision. What the fed is saying about the markets. Susan new game. Like your team. Like, your T leaves read them interpret them as you will give me today launch exciting adventure tea leaves. I'm gonna go escape in my lane. You know before this whole fast money thing. I actually had a real job and I used to make money. So I said what's going on here? And I said, wait a second. You know, the fed is gonna festively torture US dollar. They're going to continue. Rachel continue to go down to dollars. From your continues selloff central banks will probably continue to buy gold. I think the market probably stabilizes here. What works Newmont Mining? So I'll go right to the gold miners and say in this environment with the fed just said for the foreseeable future. I think gold's gonna get that second bit of the year. And I think that's going to take off on the gold trade. But when I I mean, obviously, see a lower dollar going to be good for multinationals. A lower yields are going to be good should be good for stocks. What I thought was really interesting today is the market when? Right back to the old playbook. If you look at what happened to triple cues versus the S and P five hundred you really saw an outpacing in performance today, which tells me the market is saying, you gotta buy growth, you've gotta by FANG and all those stocks where you're getting this idiosyncratic growth because globally. We're not getting. So you have that chart there? You can see right when the fed announced what they're doing very dovish, boom. All of a sudden, NASDAQ takes off verse S and P five. I mean, this is really been a playbook for a lot of the bull market run. Right. No doubt about it on the sidelines. Easy money. Go ahead by growth, and the fed gave you easier money today to be clear, I think we I didn't expect we could take another poll up of this same trade if I may and we actually did. In fact, the fed got more dovish today. So we talked about those charts and another chart, I would probably look at. It would be the US leveraged loan index or the high yield charge or credit spreads which continued to tighten away which is that on top of equity conditions being actually financial conditions are getting looser and looser which is great what's now back to August. Twenty eighteen levels. Emerging-markets they continue. They broke actually through what had been resistance around forty three fifty on the EM. If that's how you're tracking it. That's I think that's how you trade it. I also agree in the commodity spaces. I said yesterday we have policy that's giving you one thing. But ultimately, I would tell you and so the bond market which to fifty five and the ten year tells you one thing I would tell you. We have replacement and commodity and energy prices guy talked about gold kina. Jaren your adventure tonight. You know? You know, what I'm looking for is growth. But also they've got the fundamental side of it on top of that. Then it's everything you're looking for right? And I think basically so many of the techniques really fall into that category along with some of the semiconductors and the rest of it. I think when you look a lot there's there are opportunities out there. Whether it's an Intel I think there are names out there that I think can actually fight through a lot of what we're hearing on the outside. And if there's any relief in the trade wars, then all of a sudden, I think you really off to the racist with some of these names. But I think the other thing is energies really been on this great run. Right. I mean oil's been pushing towards sixty and if you go across and look at some of these equities right now, they're absolutely on fire. There's some great movement out there. Whether it's Exxon Mobil, I just took a look right for we went on. I've got ten different positions in energy right now out of probably call it sixty positions. Ten of them are in energy, which is a pretty big over waiting, but I like all of them. And I have no reason to get rid of any of them kind of energy. I mean, if you were everything. I literally have everything from pipelines to the big conglomerates the ExxonMobil's of the world. And then I've gotten a lot of the small beta names that I think if we get a run if we break through sixty I think they take off. So you look at some of the stuff probably the bidding to talk about like a rig offshore g that thing has been ripping Marymount. The only thing I will say just a word of caution out here this possible. The fed made another mistake today they want. Yes. So let's let's think about it this way, we get a weak dollar. We've already got strong oil. What happens if the weak dollar starts to light a fire under that oil trade and all sudden, we got eighty dollars oil. That's no longer a tax cut to people. That's a tax on Brian has. I'd say I'd be worried about that a bit. I think that's fair. And I think it's something the White House will pay attention to. But I don't think we've seen energy prices be a stimulus on the way down. I don't think they've really been proven for the consumer to be a head went on the way up. But what I hear you guys saying though, is that the energy trade which badly lagged with heavy short interest with very little conviction that these companies are run differently. I think they're run differently. And I think the big names are one thing. But I I would go into oil services here because they've been absolutely bludgeoned. And they have not kept pace with this rally back. How 'bout financials, and that wasn't very curious intraday chart on Angels' markets reach per session. Highs financials reach per session lows guy we had a further in version of the yield curve today. And we got. Information from the fed that economic growth wasn't going to be as good they downgraded their outlook for the economy. So what do what do financials have going for them at this? You know, the only in my opinion real thing they have for them. They have pristine balance-sheets in their well-capitalised. Now. That's great. But I don't think it necessarily gives you the multiple they probably deserve or had maybe even a couple of weeks ago p now we're talking before. Goldman Sachs has had a tremendous run off the lows we saw four or five months ago. But I think that's gotten a bit ahead of itself as well. So for a lot of these banks, I think they should be trading around tangible book. So maybe a couple of ahead of themselves number one number two if I had known, I mean, look at that outfit on Tim's all missing there. I spray. Hateful. I mean. I mean. Mccall. Monocle and maybe a visor to count as Bill. Look it's clear and all I can do is try to come back with that tomorrow. Thank you on financials, even bullish. With guys matter of fact, I bought some calls today in Bank of America. I saw some paper out there, obviously, they're not working great right now. Because of what happened with the fed later in the day. We saw the financial tipped over. But I still think if you look back over the last week two weeks, and you take a look at Goldman Sachs got over two hundred gone all the way over to oh five yesterday. And you look at J P Morgan on the move up to one zero seven one eight move into the upside, I think there are reasons why the financials when you look at the pristine balance sheets when you look at some of the margin, and some of the cost controls that they've got there are reasons why I think they've gotten to cheap. And I think that I don't know that they take off because we've been waiting for that for three years. It's like waiting for good though. But I think at some point in time we started to move to the upside Cadeau orange vest, by the way, I man he ever showed up. We. Here's here's what I also think if you think about banks, and you think about which different about banks even now versus two or three years ago is that banks as as as a sector actually paying pretty decent dividends. And at this point. If you think about the balance sheet, you'd think about the valuations, which we talk about trough balance valuations and SNP ten year, which is at two fifty four with an earnings yield on the SNP of two point one. But financials with about a two percent earnings yield. That's kind of impressive. So I I don't think you run out of banks. I'm not surprised we saw this move today. Banks it outperformed the SNP up on the market for the last week. Why should you be surprised by today's move on disappointed the backs to that? I mean, you know, I it was my final trade last night to by the banks into the fed. So our g has guy would say, but what I was betting on was a yield curve steepening, and the fed gave you a bit of a hint that they might actually the not gonna little want the curve to artificially invert. Right. And so they're going to probably do some things that are caused that curve to steepen. But not today, and that was the disappointing part. And that's why you have to reevaluate the financial financial trade. It's probably a second half of the year trait. Interesting many things Melissa things in this world are interesting. But when it comes to the spent discussion in the markets yesterday, we are focused on FedEx, right? And the signal it sent about global economic growth in the slowdown that could be materializing there, or that is materializing there what the fed said was basically confirmation of of maybe some of some fears on Wall Street about growth in general. Why isn't that all bad news? It's fascinating you say that I think it should be bad news. But I think people looked to the fence. So you know, what the fed has our back bad news is good news. But today for the first time now, we talked about this last night could the fed be too dovish and could that make the market so off now again, I said to Peter earlier twenty four hours a day make, but you know, six months ago, these same fed conversations Dow was up to fifty three hundred today, we closed down one hundred. So maybe the. Warm has turned just a bit ward defend gets too dovish. We see the old trades back on paying stocks. Go Hong industrials, go whatever. And then the fed comes back into play. It becomes a risk again. Look, let's be clear again, how extrordinary today was we went to zero rate hikes in two thousand nine hundred and we went to one in twenty twenty maybe somewhere out there in the far in you know, we talked about the balance sheet. We also say we're going to get that out of the way in a hurry. So this is a fed that right now really could surprise people. They even showed a ten GE of hawkish nece. I, and I think the US dollar is the ultimate example of that is now on at the risk of break in the two hundred day and remember fed differentials, relative to other central banks of really what's been driving the dollars moving at this point that the fed has come back in line with the and the B O J. All right. Our next guest says there's almost nothing that can stop house rally. Kissing. Tony. Here's here, chief market, strategist, origin nudity thing. I know. Had glasses like this. It'd be fast money south. Characterize your bullishness. If you say they were in like nineteen ninety-five scenario. So we ever had. Ever had. Oh dramatically that the fed went from tightening bias and within six months east yet nine thousand nine hundred five Marco was up twenty percent by the time. They did that mid nineteen ninety-five GDP growth in the US was zero point five percent per quarter for the first two quarters annualized growth. So you were almost in a recession and everybody was saying the market was ahead of itself. I I know this because I went back and I- microfiche barons and business weeks. Mike biotech. It's a library tool. When you when you I did. And I read it everybody thought that the fed had gone bonkers by tied into much ninety four and within six months, they eased market kept going higher even with that slow growth. And by the way Clinton was fighting off a presidential special counsel, Janet Reno hit appointed Ken Starr to investigate the whitewater. Paula Jones was suing him, and he threaten Japan, the number two largest world's largest economy with one hundred percent tariff on the top thirteen cars does any of this sound familiar. So that is our playbook. In addition, you have what we call the breath, thrust indicator, which the reason that we had changed our re-test call early in the year where you had such a powerful move in stocks. As a matter of fact, there was one time where you had ninety two percent of stocks above the fifty day moving average when we look back of when that's happened. It happened on February fifteenth your maximum median draw down in other words. How much do you lose in the first month? Obviously, your overbought how much you lose one point one seven percent. How much did we lose this time one point one percent two weeks ago? And you're and then you're median gained six and twelve months later or nine and sixteen percent respectively. So there's a great question and the question the answer today about could this be nine hundred ninety eight you gave out ninety four ninety five. But what if the fed east like they did ninety eight and we are just blowing a massive bubble here. And it's going to end as badly as the internet. What rash became they ease in ninety eight right? When you had almost a failure, a long term capital, and you blew up the bond market again. It was another situation with the feds. Actually, we're bailing out the banks they weren't easing because economic activity easing because liquidity and the whole thing was going to zero very quickly because the leverage long-term capital, very different than one thousand nine hundred five where you eat because economic activity was so poor. You actually got imagine this and the next three months, we get at least one negative payroll out bay. We get a negative payroll number in the next three months. How could you ever buy stocks up fifteen or twenty percent with a negative payroll number near recession growth special counsel on the prosecutor or prosecutor on the president? Well, that's what was the right thing to do. The fed is the driver this game. It is always the driver of the game. And rather than I don't like to evaluate whether they're good or bad. I'm not a politician the dude's making the money and gals making the money told you they're going to keep doing it. That's my analysis for the day. I don't I'm not that bright. Nor mine. So you've said, you know, you said the stop watch starts once the yield curve sort of flattens, correct? And you got about sixteen months giving give or take stop watch seems to be going now, but there's a world move a lot faster now or is it still sixteen to eighteen month of decent returns in the stock market. Well, let's let's think about what that does. It shuts down landing shuts down credit. So the market starts to kind of slow down and credited takes a little bit of time. If you no longer have access to the public credit markets where you're gonna do you're going to draw your Bank lines. So you still have money availability. That's the way it works with a lag. It takes some time to work through the system. So the clock starts to countdown at its twenty one percent upside and that's impede to peak. Median over eighteen and a half months. What I love to do is ask the people that are on the other side of trade because I've been his Armageddon Berisha's is. I am bullish before. Okay. What would change your view have your bearish? What would change your view? I know exactly what would change my view credit shuts down. If I come on the show a year from now after the curve is inverted on initial day, which it's not yet done. And I tell you all yeah. Everything's great. It's not it's different than don't have me back, right? At the end of the day when credit shuts down to levered system in a lever to Konami, we're still in the bubble building side of credit some of the credit deals that happened this week or bananas. You know? Triple C paper so five times oversubscribed. So Tony sounds to me like not only are you consistent with where you've been in good for you on that. So does that mean that the same trades are going to work too? So the rest of the world does it continued outperform because let's look outside of the us for a second. Because you know, really, you you've taken the pressure off in the form of the fed the dollar higher interest rates, and those are markets that have been outperforming Germany went through the two hundred eight for the first time in God knows when is that the trade you like, Tim, I'm glad yes, I question. I wanted to bring this up the emerging economies the commodity. He plays the weaker dollar plays jeopardy notice that when there's a rate of change. It's only a negative. It's only when growth is great. But it's turning over and everybody talks about it. How about one the rate of change is positive the global growth rate of change on many indicators like the always OCD sequential leading index quench really the CitiGroup economic surprise indices in Europe, you're starting to see some of these things go, which means you do get that trait semi you get you get the cyclical trade that works again. What shuts that down is when the credit market show said and just interesting on the financials, I think it's really important to remember. They went parabolic and descent November December January last year not so much now. Tony great to see you. Thanks for having me. Any painting a dairy and a to you. I what do you what Tony said, oh, I tend to lean towards what Tony's talking about it. And I think there are different reasons why I think we see different areas of the marketplace that actually can make bring us to the upside doesn't mean I don't see some sell offs. I absolutely do we've made a incredible run in a very short period of time. But I see some industrials out there that look very tasty right now because the fact that when I look, and I see stopped trading single digits and maybe being punished for the wrong reasons and have plenty of upside they've been cut down. I think there's paternity anyone ninety four. Going to break one. Well, I think of all the names out there if I'm going to stick with industrials. I still think caterpillars to ten it's coming up as we mentioned big tech the big winner today. Check out the socks all jumping one technician things. This is just the beginning of a bigger break. We've got the details. Plus check out shares a Micron jumping Beth two percent after hours. We'll tell you what the CEO's telling Wall Street about this quarter, plus oil surging to its highest level of the European here says there is one stock you should be buying to catch the energy rally. He'll give us his fast pitch for your life from Times Square, New York City, much more money right after this. Is your fixed income truly fixed income? Does it provide diversification income and risk management for your clients at I'm f s we help advisors deliver these essentials. We call it essential fixed income, find out more at MFS dot com slash fixed income. Welcome back to we've gone earnings alert on chipmaker Micron the socks up about three percent of the highs. The after our session Sima Modi's back at headquarters where the conference call is wrapping up Sima. Hey, Melissa Micron jumping higher despite weak revenue guidance CEO Sunjay Molo on the conference. Call acknowledge the short-term challenges the company is facing but remained optimistic about longer term growth specifically in the auto sector referencing the adoption of autonomous vehicles over the next decade and five G reigniting smartphone unit sales in twenty twenty though wolf at Melissa did site the challenging macro economic environment. Here's what he said. We believe Medwick Nommik uncertainty also contributing to hesitation in buying behavior at some customers. However, enemy discussed our last starting skull. These silly expect deed Embiid shipments to begin with ING in our fifth accuser. Three been demand growth sensing in the second half of get into two thousand nineteen as most smut inventories are likely to normalize by mid-year. Shares of Micron have had a strong year up over thirty percent in two thousand nineteen outperforming most of its peers in the semiconductor index Melissa back to you. Thanks, Matthew Modine headquarters by down. He wasn't on my MU. Few told me last you told me this. This is what they're going to say they're going to say revenue down eighteen percents to quench for nand. Pricing revenue down thirty percents sequentially for de ram margins are light that guide for the fourth quarter for guide for the third quarter is four point eight billion was five point two billion. They guided down APS you told me all those things I said the socks and be down five percent. And here's the stocking up three percent. So I don't know what to make of this. I guess they're buying into some of the five G commentary that he made. But if you just look at the numbers in the guidance to me, this is the stock should be lower not higher. Well, I just think that the bar is so low the d-ram ram crashes so obvious that we're not even possibly at the bottom. In fact, if you listen to a lot of the analysts out there, they say second half of the year, they get eighty five percent of their operating profit from ram. So so Micron, which is absurdly cheap on a trailing basis. It's it's it's probably three point eight times trailing twelve months is still stop that could go lower. Look, it's up thirty five percent off the bottom. A lot of this short covering. I think some of that is even the reaction you got a few positive things where the call was the fact that they shutting down a bit of capacity. Right. So now, there's going to be inventory reductions out there in video came out and said, they're working through some of their inventory. That's bloated out there CEO here saying maybe second half of the year, you're going to work through some of that inventory. So I think the markets kind of looking through this, obviously, you can see what derailing prices have done prior to the call. And they're saying wait a second at some point in time. You we've worked through all the inventory glut. And this is going to start to turn around a good read through to the rest of the sector in that. It is so leverage to one commodity part of the sector, which is obviously, which is d ram. I mean, especially when you take a look at the sector many. Quarter right years. Yup. But if you look across that whole sector, we talked about the financials earlier, and we talk about balance sheets, and where they're trading some of that these phone similar category. Right. I think what's happening here is this is a stock the sixty four dollars last night. And here we are treating it forty hit a low, I think of thirty two, but when you when they gave the delivery guy outlined, a very, well, I think what they're really saying. Hey, look, this is terrible. But it's not as bad as we even thought we thought it'd be even worse. And so I think that's part of it as well. Melanie, just yesterday they were buying calls or buying upside. Micron just looking for this calls at expire Friday. So this was literally just called buying just based upon the idea that hey, these guys are going to go higher almost regardless of what what is set on the earnings call because of where the stock is trading right now. And you talked about the where trading be I really your watching fast money on CNBC, I and business relied. Here's what else is coming up on. Orange Mogo Pratt Pacino grab that bent teacup because chairs Starbucks are heating up. The stock is trading at all time highs, and we'll tell you why one trader says he's not sure he'll ever sell this doc, plus Pete nut Jerry stepping up to the plate as oil jumps to its highest level of the year. He says it could Beulah a major rally in one stock. He'll give us the name and the trade this much more past bunny right after this. What if when interest rates rose your portfolio rose to the occasion, active income investing from Franklin Templeton reach for better? All investments involve risks Franklin Templeton distributors, inC. Welcome back to pass money. Big tech is on notice I face making some major changes to the way delivers advertisements to users. As part of a settlement with advocacy groups. It will remove age gender and zip codes, which would eliminate micro targeting for certain businesses loop ventures, gene Munster was on squawk box earlier today discussing why the shift will alter the platforms business model. The government ways in in terms of how data can be used for selecting. This newest today from Facebook is a big deal because what advertisers love about Facebook is two things reach it. Still is unprecedented and separately as the ability to target that reach. And if that gets somehow deluded that potentially could weigh on the profitability of some of these companies this on the same day, Google gets laughed with its third antitrust fine by the EU to the tune of one point seven billion dollars JP Morgan Jamie diamond also speaking on the network today saying that when it comes to big tech. They haven't even seen the full Monty yet in terms of congressional congressional hearings visual and legislation. It's is that something bad. Anyway, he said they've seen only the tip of the iceberg. All right. Let's shift here could be it is worth noting that all names closed higher today. Outperforming the broader markets as it looks like even the increased regulation risk couldn't stop investors diving for growth, but should investors really be concerned about this overhang? Became so I don't think so yet a lot of the sell off in these names in two thousand eighteen was intimidation that there's going to be these problems that there's going to be the so called full Monty coming out, and what you may want to talk. You may want to take that actually from Jamie Dimon because the financial industry went through something very similar after the crisis. Right. So he's coming from a place of experience. I understand that Facebook of all those names is the first one to really start making some changes their new privacy push. They're going to have go to a messaging system, they might even have some kind of Facebook coin that to me is the most interesting they're taking a proactive stance. And if you look at the way Facebook traded today bounced right off support closed at the higher the day. That's the one I like in the sector if you can't go to Tower Records anymore blockbuster. But you can't go to Amazon and actually buy that move use about steelworkers were out of work. But I digress. You would enjoy the movie they'll my going with this. Traded remarkably. Well, and you look today on a day that FedEx got taken out to the woodshed Amazon's big means Amazon's probably never bodies launched which means it probably makes a run to its all time high before the report earnings, I believe on April twenty fourth. Well, I mean, Monte or Google and Facebook is GDP are in Europe and the Europeans are so far ahead of us. So anyone's getting the full something that is probably what's going to happen. Meanwhile, though, if you look at what's been trading at least in some part of the FANG Google for sure last month is outperformed triple cues or their entire sector by almost six percent. If you actually look at what sold off hardest. It was a bunch of these names, but they do appear to be riding back into the leadership, especially in a lower growth environment. What do you want to own Google is growing north at twenty percent at a multiple twenty times full Monty? According to the dictionary online says the full amount expected desired or possible just FYI guy where were you going with? He was a perfectly acceptable term. Our next guest says there's two names in the trade that are heading for a bigger break. Let's go off the charts at Todd Gordon, treating analysis dot com. Todd, please take it away. True, melissa. So we've certainly seen a relative relative shift into technology will start off with the lower part of the chart. I so this is N D X that NASDAQ one hundred hundred biggest tech stocks in the land relatively SMP you've seen the end the X outperform. So there's your empirical evidence that in fact tech we're rotating back in now so far since September high we've been in correction mode gonna tell you a little bit of a story based on here. And if we could go back, then as they could possible that'd be great. But that's okay. If not basically what's happened is we've hit the lashed retracement. Okay. If we're not real thanks guys this last retracement right here. He's not the sixty one percent. Those of you who were used to retrace might have been used to the sixty one point eight. Here's a little. Math tip technical. Now says KiKi stuff if you square root that that puts you at the retracement of last resort. Seventy eight point six if you don't hold that. There is a very strong implicate implication to break to new highs. In fact, what you would do is say old highs are expected. Then what you'd expect to do is go up to the one two seven two more geeky mass stuff Beka? No, you're in fifth. Please back me up when the guys hammering me on the desk after this. If you take the square root of your Naci, multiple one point six one eight it puts you right there that right there is eighty two hundred and the NASDAQ all that together means we break this line, you go to eighty two hundred that's expected relationship, and it's pretty reliable when that happens could be this year could be next year. But that's the upside target. So the stocks that I'm looking at here. We're seeing the rotation back in Amazon beautiful shelf here, we're trying to break this, inverse and shoulder. I don't have the trade on I'm going to try to chase. As probably many people are as we get up to the old highs. Again, Amazon into the NASDAQ were showing some relative strength just recently Amazon starting to come on the other one no surprise is net. Flicks. Get I don't have this trait. Aunt I want to get it. It looks like we're well contained in a nice parallel channel here. We should be able to go up and test this upper level here. When you're on a log scale over here that changes the upside targets that actually gives you a target of around six hundred again that doesn't need to be this year could be next year. But that's where resistance comes in. I'll be looking to add same thing. Netflix into the NASDAQ Q certainly a lot of relative strength here. So we're seeing a rotation back into tech. And these guys I think are gonna play the ketchup trade higher here. All right Todd, Gordon, a trading announces dot com with them Matt Naci skills there. Thanks Todd of you know, what's interesting about the two names Todd had highlighted, and they are ones. I one could argue are more insulated from these regulatory Rick your. Yeah. I think that's right. And part of Netflix valuation is is defended by their know. They were a conduit. They've imagine leadership advantage over the peers, they also have a lot of your data, by the way. So I think that they could be in a position where at some point people will scrutinize this to me the issue on net. Flicks is competition and valuation, not are the executing. Because they are. They are executing. I think the competition is coming. We all know that obviously apple and everybody else is gonna come for them like we expect. But I still think that there is still very very difficult for people to try to get across. And because of that I pitched this stock here not that long ago pitch power-pitch this stock and a lot of voter gets. But I'll tell you what. Mel it's been one of my favorite traits that I've had on and I continue to have it on. And I'm still looking at other names in that sector, where it's names that I don't really necessarily kit my arms around when I look at valuations, but if I can buy those stocks, and I can buy unearth sell incredible volatility against them Boeing's one of those names around looking for some of the opportunity like that makes it a lot easier. This is a name. We're literally I think. For the last five months since I've owned we've collected over one hundred dollars in premium. I mean, so that gives you a price entry point that's incredible versus where you actually bought that stock, and I continue to think that that's a perfect way to play Netflix while Todd mentioned, a dead Italian mathematician. I'm a big fan is that as anybody. I would use them though as more of a roadmap. Right. A sign along the road. Here's a point where you might get some weakness if you wanna take a little bit off you wanna sell some calls against something like that. When it comes to the tech trade today told you everything you need to to say that chart the chart showed of tech outperforming, the S and P five hundred you saw over the last couple of months you saw today you by growth in this market. Everything is awesome. Again. Here. Everything is or wherever there as that. What's his name, John Lennon gonna give me a trade? Would fit Benach. She was making these numbers up in twelve twenty or so he said, you know, those cats on fast money, did you ever ask him that actually? It's old. L Starbucks rally the coffee giant surging to all-time. Highs of twenty percent from the December lows. We'll tell you what investors so excited about the stock plus paint. Here has made his way over to the plasma. He's feeling that good energy with oil on the rise. He'll tell us the one Sakis bind to catch that. What is that much more fast money right after this? Welcome back to pass. The oil Ron continues topping sixty bucks a barrel for the first time since November crude rallying more than thirty percent. This year alone pizzas. There's one energy soccer as riding the wave. He's over at the plasma with the fast, bitch, happy or your Mel show. This is this is going to be a lot of fun because this is the name by like a lot. I've owned it since February of last year, and it's kinder- Morgan. Here's some of the interesting parts about this Richard kinder-. He's the founder, obviously. And he's still the chairman, but he's got a CEO and places doing an unbelievable job. But Richard kinder-. How about the commitment he has to his own company? He not only already owned incredible size in terms of how much shares the own. But in the last since November September rather he's bought another four billion shares into this four million shares on the stock so very aggressively positioning himself, you gotta like the fact that he's willing to put his money there between seventeen and a half at about eighteen and a half is where he bought the majority of that. And that's all him. He's committed very. Much like, Jamie diamond very much like Steve Wynn was back to their stocks. It's just amazing. And I love seeing something like that. I think this the fact that they are the largest oil and gas pipelines. That's amazing and what the all the other areas that they've got they got the terminals down south. They've got all the different positions along the way as well. As Ellen g there's a lot of things going on in the right way that I think positions them going forward not just up to now but going forward because the stock hit a fifty two week high today, the interesting thing is this dividend. Now, if you go back, let me just show you the chart if you go back to two thousand fifteen this is a company that because they had to make sure that they had everything in place. They actually cut the dividend. They were very uncomfortable. We all know why we saw gas prices and where they were but they cut the dividend. This stock dropped dramatically here. And then over the last couple of years after that cut now that's actually doubled. So it went from fifty cents. Now, it's gone to a dollar. It's almost recovering back to where they were and where they were paying the dividend before I think, this is a very creative company, and I think. Richard kinder- is the reason why probably the biggest reason why I own this dock, and I will continue to own this stock patriots just to play devil's advocate because that's what we do on this show fast. You, you know, as well as anyone the socks from basically fifteen to twenty and change the course of a month and a half, two months. Does that concern you at all it doesn't concern me? Because if you go back, and you looked at that chart. This was a stock that was trading in the forties guy. I think this stock has potential not maybe get back to those levels unless we see the rest of the environment change. But I certainly think that we could see it back towards the thirty. So it has made a move in the last year. But I think that move actually can extend a lot higher than it is right now they have a question or we're gonna vote vote. Cool. Let's vote P. I got it man. I'm this is this was tough for me. I'm a seller. I like the energy space. I certainly agree. Everything. You just said is why this company is trading at the top of the range in thirty times. Multiple. I think there's other places to go in the space, but it's a reluctant sell. It's all good Toni Braxton in the air PK. What do you say? Well, you know I've liked toilet bit. And I like what pizza got a high dividend in a high growth area now. So I crossed KM. I, nope. Nope. It's a KM by oh, how e- nifty Russell better than that. What I did there. Mel I said fun side because Peden no, no let me by. It's not a bad, right? Wait, really inside. It's a pipeline. We brought in heightened earlier in the show referred to a suicide. Wow. Then the no not clear guy. Qazi this say the pipeline where people surfing the Philippine, right? The more you now rainbow. All right. That's spoken. It is your turn at home. Or are you buying pizza pitch for Kim or Morgan vote? Now, there's a Twitter poll. CNBC fast money will reveal the results later in the show close Pete looks right. Plus shares. Starbucks seeing green going green as the company continues to use less. Plastic can the copy giant continue to percolate anes? We'll hear the latest from their shareholder meeting today. Much more fast Freda. Welcome back to fast money. Check out. Here's a Starbucks jolting higher now up more than forty percent off its fifty two week low. The stock had a fresh all-time high today during a shareholder meeting as a company continues to go green use less plastic. Also, accelerated stock buyback program Courtney Reagan joins us with all the details court. I've Elissa so today. Starbucks did hold. It's more shareholder meeting today about four thousand people in attendance at the theatre in Seattle, Washington. Now, shares were flat most of the session you saw move higher. But that coincided with the market on the Federal Reserve meeting during the course of the shareholder meeting as well, the coffee giant and didn't update any financial forecasts other than an accelerated two billion dollar share repurchase program to be completed by June. But it did announce a one hundred million dollar investment in valor, siren ventures. So this is the fund that's intended to invest in technology products or other solutions to improve food or retail. So that would give Starbucks early access to these types of innovations, but the cheap offering officer Roslyn brewer told. Shareholders of Starbucks that they plan to modernize the consumer experience through technology product innovation and even some new store formats, this is the Starbucks reimagined third place, meaning it's not home. It's not work. But the third place that reference that they've been using since Howard Schultz was there the modernization will start this summer in New York City. No financial details today, given about the what that will cost and Leslie Starbucks gave updates to its programs to hit those sustainability goals is going to try some new greener cups and straw lids. At least in some geographies, adding a feature also on the app to show the coffee beans journey to your exact Cup and interesting stuff back over to you. Thanks court cordy Reagan. I don't even know how to react the journey trace being like watching them on the truck and ride down sort of the show. We appreciate the journey. Oh, nicely. She's paying it's Abou. It's the bow on on all right here. All right. I appreciate the cops are up four percent in the last quarter globally, and that the US actually outperforms and that these guys are continuing to get prices higher in the US as their costs go higher. So as we talked about the company that the challenges are the fact that's up thirty percent over the last six months also though it did nothing for two years. So it's broken out into a new range arranged that I think you can probably pause at twenty three times next year. It's not that expensive here. And again, I repeat this company's been able to raise prices in a in a world where I don't think a lot of other people can that's impressive, so interesting. So I would say the story for Starbucks to me is it's a ninety billion dollar market cap company. And they're going return. I think close to twenty five billion dollars of which they've already did fourteen in buybacks and dividends to their investors. That's the story that's a significant amount of money, so valuation. They're not that expensive the nut that cheap either. But if they're going to get to to buy back stock, I think the stock continues to go higher, and the fact they are buying back stock is important to me because that's just shows you the. Commitment. I think from the company of where they are at these levels. I think the other thing is coffee prices go up they raise prices for coffee prices, go down. They don't touch them. That's the thing of beauty. That's one of the greatest mechanisms I've ever seen at Starbucks has gotten away with that forever. And it seems as if nobody really cares. But it's been great. I I mean, we chocolate the sustainability thing, but I actually think it's a brilliant move. Not just not just for PR purposes. And you say, oh, B K. You went to UVA and your crunchy whatever go cats, by the way. But anyway, when it comes to Starbucks, and this this whole new sector investors, coming ES G environment. Social governs investors. It's a whole new amount of money coming in that potentially represents new buyers for Starbucks if they can get this right, by the way, that's not Wildcats. Mel that's catamounts out amounts. We're talking ornaments. Even mass was a wild. Catamounts very well done. I do remember some things. By the way, not that anybody cares. Except maybe Brian and myself for Mont the university of they're very live dog up against Florida state bribers run to the tour strat. What does that mean? The basketball thrown into all live dog. All right. Look it up coming up and now stock trading at all time. Highs Nike and that is gearing up for tomorrow. We'll tell you why traders are betting this socks run isn't over yet. Plus, let's get a check on our Kramer Cam. And there's Jim chatting with sage therapeutic CEO its stock is up. A whopping sixty percent this year cats interview and much more at the top of the hour on that we are live at the NASDAQ in Times Square much more best Sylla head. Welcome back to bass. When he shares Nike having a big run this year trading its all-time highs options traders are betting the stock is about to pick up speed. When reports earnings tomorrow, let's get out to my co and San Francisco with the action he might. Hi there. Yes. So Nike saw a well over double its average daily call volume today and the options markets, implying a move of about five point one percent for earnings when they report tomorrow that's about average where we saw most of the activity that was in the weekly ninety three strike calls over three thousand of those ultimately ended up trading for about a quarter. So buyers of those calls are betting that Nike could trade higher by about eight percent by the end of the week. And that's larger than the implied move. You might wonder why they would be looking to do that one of the reasons could be that out of the last eight quarters four times like he has moved more than seven percent on earnings. We've seen moves of up to eleven percent. So even though these are low probability bet we can see that the stock has been known to move that much and it may yet again eight when you think low probability bet, but you just gotta like the risk reward. Because this is somebody who's absolutely just spending on one thing. What are these earnings gonna tell us because they're just buying almost no time whatsoever. Expires friday. Right. So because of that this is a very gutsy play very similar to what we saw. Yesterday in a couple of the other names of actually reported as well. And they've worked out and Mike grant being one of them today. Couple things digital transformation you heard that last quarter here it again, great China. Last quarter was remarkably strong, given what's been going on over there. That's now the naysayers say twenty seven times stored earnings the stock is expensive. That's true. But you didn't have margin expansion they seem to run into business better. So I think Mike Koby wear by the way, great wrestler, probably going to be right on the upside. Tomorrow, I own it, and I'm not terribly discouraged by the multiple and there's two things that are going on one innovation at Nike again. At least is is is acknowledged to be happening which equals full price, which means pricing power. Also, the channel that they control on distribution is clean. And I think these guys are well positioned for twenty twenty Mike. Thank you. Good to see you. We'll see you on Friday Friday is when of course, the full show airs off action five PM eastern time up next final trades and the result hole. Ooh. Welcome back to pass when we've got breaking news, Levi's IPO pricing. Look into Leslie picker for the details. Leslie, he Melissa Levi Strauss pricing its initial public offering at seventeen dollars per share that as above the range, the company had been marketing to investors. A majority of the thirty seven million shares being sold in this IPO stem from the relatives of Levi Strauss who founded the denim company. But died one hundred sixteen years ago the remainder are being issued by the company itself, which plans to use the cash toward cap ex and possibly for acquisitions and strategic investments at that seventeen dollars per share Levi's offering is about six hundred and twenty three million dollars evaluation of six point six billion dollars. Sources told me earlier today that demand had been better than expected so called indications of interest where investors put a non-binding orders for shares are more than ten times the amount that's being offered in the deal that gave Levi's executives bankers confidence. It could price that IPO above the range. It had been marketing to investors, and I spoke with some of those investors who were optimistic. About the company's performance, the predictability of its business model ones that he saw this deal is a call option on nice growth. Goldman Sachs J P Morgan or leading this steal. The shares will be listed on the NYSE under the symbol L E, Melissa. All right. Leslie, thank you, Leslie picker, so above the range oversubscribed. What you seems pretty good. You know, it's interesting. They they're known for making sturdy warfare. That's where it working workflows. That's what they got their start in the gold rush. But the women sectors actually been the big winner here. Thirty eight percent growth in the women in sector, both tops and jeans. And so I think this one does. Well, right, by the way, he lost on the Twitter poll for his fast pitch. The final trades. Let me tell you on my that's the one because everybody's against. And let me tell you. It's going higher, Gideon and Starbucks. Look, I I think this is the name that continues to charge higher as they talk about the carved out their market share. They carved up pricing power student. Talking about carving things out. Look at Judy x J gold sector junior junior. Mellon the Ivy leagues harvest out there, but yell we'll beat LSU right down. All right. Berget comes out S L be. All right. That doesn't press you back here. Tomorrow for more fast money. Meantime, don't go anywhere. Big addition mad money with you Kramer, starch right now. At fidelity, you get value. You won't find anywhere else decisions. They're clear costs they're lower than ever and account fees. There's zero so you can invest with zero trade offs open an account today at fidelity dot com slash trading zero account minimums in zero counties apply to retail brokerage accounts. Only expenses charged by investments such as funds managed accounts and HSA's commissions interest charges or other expenses for transactions may still apply. See fidelity dot com slash commissions for details. Padilla broker services LLC member NYSE SIPC.

Federal Reserve Starbucks US Melissa New York City Brian Kelly Tim Seymour Franklin Templeton CEO Pete nut Jerry Micron Nike Tony Dwyer FedEx Richard kinder Todd Gordon
Fast Money 11/05/19

CNBC's Fast Money

45:32 min | 1 year ago

Fast Money 11/05/19

"What is decision tech by fidelity? It's technology that can help you find a stock based on what's trending or investing goal. It's real time insights and information formation delivered in your own customized view of the market. It's smarter trading technology for smarter trading decisions and it's only from fidelity pretty open an account today at fidelity dot com slash trading fidelity brokerage services. LLC member NYSE SIPC the life of the Nasdaq market site overlooking New York. City's Times Square. This is fast money. I'm Melissa leaders on the desk. Repeat Nigerian Tim CR. Karen Fireman and Steve Achieve Crossover tonight on fast. Walgreens reportedly in talks to go private. So could these be other Dow Shakeups in the works of Walgreen's boots plus Lawson Space Virgin Galactic guesses first analyst call but how do you value as space tourism company when there's no one else to compare it to our trade is a man's real answers and later reality check for the real real what a new CNBC investigation uncovered that sank back stock tumbling today. But I come on in the water's fine. The Dow and Nasdaq soaring to new all-time all time highs as treasuries France at the highest level since July so is the bond market signaling. It is time to take off the life jackets. Jump back into this record rally. You mentioned the yield curve but actually look at the ten year yield one point eight six percent German bonds or back to July highs. We're getting Auckland on fire J. P. Morgan win over one thirty ready today. All across the financials UC's great gains and also it's basically we talked about yesterday but I'll say it again. Earning earning seasons a little bit better than expected and volatility is just getting sucked out of this market right now. I mean we were talking about eighteenth nineteenth just a couple of weeks ago here we are in the twelve and a half thirteen and a half call at fourteen. I mean this is amazing. Oh how quick people have digested. What's going on in the options market? The one area that I keep seeing more and more and more energy people are going after some of these areas and energy. If you're looking at Beta and you're looking volatile volatile different names in there that's where we're seeing it we've had over forty different stocks hit over the last two weeks in the energy space along all with unusual activity. Look up and they're already getting and it's happening in days not weeks and they're going very very short term is that is that a product of worst is I now that we the laggers being bought just for that Beta play cello. How'd you start off your segment right there? You said earnings not as bad right China. Not as bad the Fed better than expected you have a host of things impeachment kind of rolling off the market back right now. Everything is not as bad. So that's why people are but does that equal record highs. Well if you look at industrials are breaking out. Director ties and people aren't talking about that they're talking about the the more exciting and the banks. Maybe should be more exciting. We've been waiting eight for the banks so back to bond. There's a couple of things that are going on in the bond market. First of all we do have record supplied coming also so there is a supply issue which would put some heaviness on yields. If you don't I don't think that actually you can digest all of this in the past environment over the summer when yields were hitting lows. There was no question we were going to digest it so when you think about the dynamics and we had an IFM services is today so we've been watching this part of the economy to see if it's been at least falling back and a couple of times over the last three or four months that's been a trigger for the market to be very cautious. The numbers they they weren't great but there are better than expected to China. PM My last night was slightly better. I think you're getting stabilizing. PM is most importantly. I think you've got cinnamon for the equity market that we haven't seen seen in a long time and I'm not going to tell you we're at January twenty eighteen but it does feel at work and what's your measure the CNN greed index. There's an AI coming out tomorrow you you should watch that because the sentiment is part of where we have come from which was so bad That I think that's playing into stocks. Yeah how do you feel about the markets right now. We've we've come a long way in a really long way in a short amount of time and Kudos to you. I know you were positive when when trade was looking terrible and I was far for more concerned however all that having been said that was six percent to go in the SNP. It was awesome only about three weeks ago or so eight percent. twenty-three sessions doc. Three lows okay. So that is extraordinary. Talking about okay. Great the you know. The yield curve is shifted or Stephen and that's really good for banks J. P. Morgan up eighteen dollars dollars in the last three weeks. That was the time to own war J. P. Morgan. I think here you know yesterday. I sold one thirty calls against my a position. I I love JP Morgan I think it's an outstanding Just two months I. I think that it's a really nice run and I don't think it's crazy expensive here but I also think eighteen dollar move in stock like J. P.. Morgan is really a pretty extraordinary. Move so I mean to me you know. Any protection has gone undesirables right. The volatility is pizza crashed right or wrong so when the market's up that's great and when it's not that's not so fun but I'd be inclined to just I agree with last week. I said the market was very close to being over bought an RSI. I said ten handles away. I catch thirty eighty as an overshoot you level so we're battling with that level. IV It's time to lock in profits. But I do believe that there's going to be a reassessment and people will ultimately by back right red alert one more united rental I think one hundred eight hundred and fifty today right in in a very short time. I love United Rental. It's not expensive here but that is an extraordinary run. Okay so so. If there's three of pullback I mean do you you're gonNA time because you're sure you're you're I'm I am Wasser money trader and it's faster than ever met we got. I gave you just a small synopsis of what we saw in the last couple of days. We're seeing more and more paper that's coming in. That's expiring Friday. I mean I'm talking about. They are ultra short term. But they've been so successful with these trades. It's been scary. They've been right right right week after week. You guys talk about. This is big move. How about the guys who are buying on Monday? That are expiring that Friday and then the next month expire Wednesday last week and then expiring on Friday two days later. That's the kind of market that we're in right now and I think it's partially because people really trust it especially at the can and what you see that kind kind of either put call skew or something. That's wildly Bush in terms of the positioning right now. Do you sake say this is dangerous. That's that's what my spider senses tangling with. What I really like about it though Tim is? It's not so much about could put call ratio because those never mean anything to me. It's all about buys and sells. So are they selling thereby yeah and the very short term. But they've been right and they continue to be right so I'm gonNA keep writing this thing along. I mean I'm trimming like you were talking about Karen. You sold some calls and J. P. Morgan. The only the problem with that trade is obviously apply. Volatility has gone like this right. So you're not getting paid as much as you would like to for those options. But I've been trimming a lot of these options. Mel Today was was wells. Fargo was Morgan. Stanley love those names. I still love those names. I think they're going higher but it's a great opportunity to take some off. So can I ask the question now pushing doing that. You think that there's a chance that we see pullback. At this point witnesses analogy kick in in. Are you better off trying to trade that pullback or just just say long ride that pullback knowing that seasonally we'll take you back to record high your time horizon is five years just stay the course if your time horizon around this desk ask is pretty quick than I think. Trim in November get long again December. And that's the way you play it to Pete's Point Alta Roku snap all all up twenty thirty percent in six days. Wow so you can make your year in these individual events really quick so you have to be able to buy them Salaam quick and don't fall in love. You can lose your years in a short amount of time with a quick pullback was sox record highs some titans of the industry are taking a cautious town heading into the end of the year as well we heard from a bunch of them throughout the day here on. CNBC here's what they said. We've been at a peak for a while and I just don't know how much longer this can continue radio but we've been saying it's at a peak for a couple years now we've been wrong because it keeps going higher. A lot of valuable companies rates are very low. You know it looks like these. Stock markets are forecast into pretty eighty bosie outcome and the bond market. And it's hard to say what is forecast and because it's a lot of bugs me book by Central Banks are very flush with money and and as a result they're taking very low returns and then also on Arctic buying dreams rather than earnings in stocks. Our next guest is also on alert. Predicting a pullback will rattle the market between now and December but he views it as a significant buying opportunity Tony Dwyer's chief market strategist. They're just canaccord genuity. Tony Welcome back. Thanks for a pullback of two to five percents this month. That's expecting me to come on at a new record high being the ball all and I'd like to do is pull put data to what everybody on the desk is saying. How do you know when a pullback is coming so we found that when the S. and P. Five hundred is up more than twenty percent for year to date through the end of October? It's always up through the end of the year by a median. Five percent greater than five percent sent but five out of the seven occurrences you could buy cheaper than the October thirty first print. So if the market's up a percent and a half or two percent from there and you're worse I have a two to five percent poor back over the next few weeks. You add to that. That my buddy Jason Gopher that sentiment traitor found that one the S. and P.. The Dow and the Nasdaq make like a record for altogether on the same day for the first time in over three months. You typically get seventy five percent odds of a pullback over two weeks by just under one percents percents. I'm not calling for any kind of monster. Pullback and people are going to say two percent widespread who cares down to percents. Everybody's freaking out we're doing WANNA. CNBC special graph strangely. I'm on your ah no seriously I mean everybody down two percent thanks. It's GONNA become seven to ten percent right and they don't buy it so my message wouldn't be trim my message would be of your about to get in because you're making a new. You don't have to chase the next tick. He can just wait. Okay all right but down. Two percent is a lot of some flat and then some down you know big big leisure percent sure so when when you see a down two percent would you say all right time to start buying those ones that really got hit the down ten percent I would I would care and you know when you're institutional fund manager you can't buy the low tech anybody that comes on here and says they're going to buy the right. Exact percentage I think is delusional. I know why can't do it what I can do. Though is no Y.. On buying and that way when it does go down. It's hard but at least I'm able to add into the weakness if I'm not convicted before comes down and expect a pullback. There's no way I'm buying down two to five percent because it could be ten to fifteen and that's why I'm so fundamentally convicted. If you're waiting to buy what do you buy when you're down two to five percent. Are you buying the sectors that got that got hit the most in that pullback down to five percent by an offense and I've been buying offense is printing the money I can't yell at loud enough The guys printing the money gave us the game. Plan globally. I can't can't say it in the last week. Powell said an amazing thing that people didn't I don't believe pay enough attention to he said the only thing that would make him raise rates is meaningful meaningful increase in inflation above. Everybody knows that part but he also said early next year. He's coming out. The Fed is coming out with a way to get inflation expectation higher. Are you going to tightening. That's adding liquidity somehow. We're making asset prices. Go up or some way of creating more spending you. Couple that with the comment mouth that he said that earlier this year they thought low inflation transitory. And it wasn't. He just announced a generational change in Fed thinking thinking on inflation that we talked about in July where they're more worried about deflation and inflation. It's a generational change. So what does that mean. Fed input one. Oh one higher valuations and even now given the turn in the global data that Timmy outlined and the manufacturing PM is not that they're good. They're less bad. Let's say you actually turn global data and stabilize and make it a little bit better consumer in the US is benefiting from the low rates and easier fed. You could have what we've talked about the whole year Late mid nineties kind of Environment Post Ninety five environment where you get big drops but twenty percent kind of years. Didn't he come on. Here is bearish everything just heard was was not buying and so my my. I don't convince you ahead of time to me you. Yeah no that. We're not buying the weakness if I'm not convincing you ahead of time. You're not buying the weakness weakness so fundamentally because you you said I'm looking at this fundamentally only and you're talking about a couple of triggers. What is that downward trigger? Is this a trade. Is it a trade headline. I mean what's going to move this because what I'm hearing is sentiment. What I'm hearing is positioning what? I'm hearing is tactical founder and a history. But what's what's the fundamental trigger down seven percent October second with the market collapsing. There's no trigger for the downside. Were in it could be it could be a trade headline. It could be a fed- comment. It could be earning statement. It could be really anything. There's no identifiable position for it. Meaning were set up. UH news item out of nowhere. Tony Thank you. Thank you dwyer. Here's a bowl with little barriers on difficulty and non largely right with his bowl. Call so you can understand why he wants to dance with the bullet Bronco so so you don't do. The most important thing you said was about the Fed and when you look at interpret the festival more worries about whether it's hawkish cut a dovish cut it seems like the dove is leaving the fomc and that's the way it's GonNa stay and once market participants get it. It's off to the racist for this market again. Coming up match group reporting earnings just moments ago. We've got the lowdown on what's moving the stock lower after hours. Plus the chairman of Boeing sitting down exclusively with CNBC seep. We'll tell you what he said. That gave the stock a list today. We're live in Times Square in New York City. Much more fast money right after this. What is decision tech by fidelity? It's technology that can help you find a stock based on what's trending or an investing goal. It's real time insights and information delivered in your own customized view of the market. It's smarter trading technology for smarter trading decisions. It's and it's only from fidelity open an account today at fidelity dot com slash trading fidelity brokerage services LLC member NY SC SC SIPC. Welcome back to pass on earnings alert on match group. You can see. The stock is down fifteen percents in the after our session. Let's Eric Chemmy back at headquarters at the latest hair. Hey Melissa that's right. Investor Swiping left on Tinder parent match shears. Giving hit after hours is trading down more than sixteen percent earnings and user numbers beat estimates match posted a nineteen percent jumping average subscribers but a key metric average average revenue per user that came in weaker-than-expected growing only four percent since last year and guidance for the current quarter that missed forecasts in part due to long term investments and heavy legal costs matches also under pressure amid growing competition from rival online dating services remember. FACEBOOK launched its own. US dating right from earlier this year and bumble bumble expanded its global presence by launching an indio last year match is relying on tinder and okay cupid to boost its presence presence in emerging markets that seems to be paying off subscribers jumped twenty nine percent internationally and revenue growth emerging markets was nearly eighty percent the company still has work to do and no surprise shares of IAC also down sharply in the after hours session but still matches been a stock to buy thirty four percent so so far this year even with the steep losses after the earnings back to you Melissa Arab. Thank you Eric Chimney at headquarters across I feel like you mentioned mash recent. Say I feel feel like you have exactly the issue would manage. This is something I bought a way lower than where it's at now and I wrote it all the way up. facebook was he's never going to be the real competition there. I think people wanted to separate dating APP other than being facebook and seeing the friends and whatnot so I never thought that was the head. The head headwind is that the FTC is saying that those headlines in the last couple months that twenty five to thirty percent are not really real people. That's the headwind for these dating insights. That's why I think it's a no touch admits. He doesn't know idea all right from a match to going private adventures of the drugstore. Chain getting a boost today on reports of its exploring plans to go private people familiar with the situation telling CNBC the drugstore giant that walgreens has reached doubt to p firms about a deal. If it happened it could be the largest in history Karen. What's your take Kind of surprised actually very surprised I mean a lot of reasons. One the size of the deal right. That's so a deal that big. That's that alone and makes difficult to do. The second part is this is an industry that you know. It's it's undergoing big change and that isn't always a good time to take on a bunch of debt so even though it might look cheap. I think you know industry and flex like this is really not a great candidate on the flipside. KKR was involved with boots alliance and certainly think of private equity firms of course KKR wine. Here's the thing. If there were deal this big I would imagine it would be a number of private equity players and a number of lawyers involved. Ah Spells leaks that we would see leaks of information and that sort of interesting thing to watch right when you say. The industry is undergoing a lot of change. You mean the. PM side of the Industry the Front of the store. I mean you all of it and so to you know to take them on a debt at the time when you're undergoing I want to change that's hard and the size. Have you seen any unusual options activity. I knew that you were thinking that I was thinking that exact same thing. No we have not seen anything incredibly unusual there so I wouldn't say that but I would say that there are some interesting aspects about this company going private WanNa Miss. They throw off a lot of cash yes they have debt but they throw a lot of cash. Maybe there's ways they can massage that debt around which a lot of the configure out and so that might make it a little more palatable and you look at the value of where it is right now. It's not ultra expensive so there are some reasons his wife maybe private equity interest. I mean if those are the reasons it seems like an activist would have more luck as opposed to taking the whole thing private if they wanted to lower lower the leverage of the company right and better utilize the free cash flow. You don't have to buy the company to do that and I. I think the stock to respond and often the right activists visit the right track record. The amount of debt they have on now is not problematic down to death. They would need to take to do it. I'll be oh unless they put in. You know tens of billions of dollars fifty billion dollars of equity. Then they could do it with a lot a lot of dead. That's an enormous equity check for somebody to write well if you remember. Walgreens replaced General Electric and the Dow last June. So that got US thinking. If walgreens goes private leaves the Dow and of course there are a lot of caveats before that would happen. We ask who should replace them now. Let's let's put the caveats out here. We don't know if the deal is going to get done. We didn't know when it's going to get done. It could be a long time before it gets removed from the Dow Etcetera Etcetera Etcetera. But this is a fun exercise to send questions. The Dow in theory should be reflection the economy and so what could better reflect the kind of he had the opportunity to replace walgreens boots alliance. Pete I'M GONNA go with a little bit of a surprise pick. Maybe I'm the retailer boy. Now let's go to Minnesota for just one second and by the way we'll do not even help right. That's a Minnesota three M that's Minnesota travelers. That's Minnesota have. You know what makes a lot of sense. Why not target at when you look at target it actually fits the bill and you know you obviously have have the CBS within target stores? There's a lot of different things about it but when you really look at the stock one hundred ten dollars by two point eight percent piece this really makes a lot of sense to fit right right in there. And I think it's a measurement of exactly what you were just defining mill it's it's measuring what's going on in the economy and everything else ten. Well if I was going to target something something we'll probably be CVS and to me. It's almost kind of painfully obvious. I mean if we're talking about walgreens what is the closest competitor. What is the closest the stock price for a stock for stock weighted index And in terms of representative part of the economy and and both of these companies are either struggled from or deal with some of the same issues around the PBN business and their core retail footprint. And by the way escalating kind of retail costs and escalating labor costs and possibly input costs from the trade war so but CVS should be clear and obvious replacement. Karen yes I I'm choosing facebook won't see with all caps today ask logo and the reason is I think that the Dow doesn't represent nearly as much as it should social media advertising revenue so it seems like a big a big modernizing with all the regulation issues though in front of them right now. Do you think that's still makes things in there. They're happy to have they got plenty. That's right another other mass merchant in the theme of P but I think this is indicative of where the economy is Cosco. And I love the price. This is a price weighted index not like the market cap. I think GEICO would be an excellent choice. That reflects the economy very interesting. I'm justice in relation exactly a lot of things that can happen frantic branding guy providing the challenges facing walgreens in the public market head on over to CNBC DOT COM much warpath money. Right after this Boeing. CEO Getting a big vote of of confidence from the company's chairman but we'll investors buy into his support. I'm later facebook up. Its game in the hardware market with the rollout of bits portal. TV But web consumers open up their living rooms to the privacy played company all that and more when fast money returns contour from Cox has all your favorites all in one place and with the contour remote you can use your voice to fund them on live ATV on demand and streaming APPs like netflix prime video and more see Cox dot com for details. Welcome back to pass Monday. Check out shares. There's a Boeing jumping two percent for. Its third positive day in a row. CNBC sat down. Boeing chairman Dave Calhoun earlier. Today talking everything from the ground at seven thirty seven Max plans to Boeing. CEO Dennis Muilenburg CNBC. PHILA- bows here with more from that. Big interview fell catch. Welcome to be here. Look there were two objectives. Actives for Dave Calhoun when he talked this morning. One change the narrative from last week which was an utter disaster for Boeing. Dennis Muilenburg was on Capitol Hill and to make get very clear to the market. into regulators. That the Boeing Board has the back of Dennis Muilenburg from the vantage point of our board. Dennis has done everything right from the beginning it was sort of clear. Must Know is hiding anything. It was a set of engineering decision region that ended up being wrong. This control system will be fixed and it will be safe and it will have been tested like no other control system in at least least in my history in the nation industry and this airplane will will fly and it will be safe and I'll fly it. My family will fly it. And there's here's the only way to win. A brand back is not advertise it or to talk about it but to win with every next flight. One other piece of news regarding Dennis Muilenburg Dave. Calhoun said that on Saturday. He received a phone call from Dennis. Muilenburg who last week remember on Capitol Hill. He was asked by Senators and representatives. Why are you being paid given the the crisis involving involving the seven three seven? Max didn't really have an answer. He said that's up to the board well on Saturday he called Dave Calhoun. He said you know what. Forget about my bonus and stock grants for two thousand thousand in one thousand nine hundred also. Forget about them all the way until the Max deliveries. They're they're caught up completely which may not even happen by the end of next year it could be early. Twenty twenty one by the time they finally catch up with all of those delivery so he is his compensation question they have put that direct at least for now. And don't forget he's a deal book tomorrow talking with Andrew Ross Sorkin. It's interesting that Calhoun had said that. It was a series of engineering decisions. What did he say in response to Tech Skate? That was one of the most memorable there are moments in those. Why didn't somebody in your staff come running in with their hair on fire when they saw these texts? Well we did ask him about the emails and whether or not there was this culture of not telling everybody everything and essentially not a safe culture at Boeing and what he said was we reacted as quickly as we were alerted to information. That question is still out there and regulators in on Capitol Hill have said we still want to ask more questions questions in fact they wrote a letter yesterday. Essentially saying we want to ask more questions to Boeing executives about. Who knew what and when did they know it? But at this point Dave Calhoun. WHO said it's in their opinion? Dennis Muilenburg is not hiding anything. He is not trying to keep anybody out in the dark about what's happened with the mets that he says look. He's been forthright from the beginning. And that's why we believe he is the person to lead this company right now. Do you think not taking a penny of pay until the Max Backlog is resolved solved alleviates the heat that they will feel from regulators in Congress. No because I think I think I think the heat is there in. I think that there are after being in Washington. I get the sense that not everybody in Washington is completely satisfied with what they heard from Dennis. Muilenburg last week it it seems like investors are satisfied. We Think I. I'm not sure I think. Investors have a lot of questions to ultimately comes from winter. We're going to get the Max the first Mac uh-huh q.. On twenty twenty two hundred K.. Who I think's one of the best out there wolf He's got forty two coming out in January fifty two by August and and basically says you're down fifty planes by the end of the year relative to where people expected that you can ramp up to seven per month and also get those deliveries ramped up as quickly as they'd like to that's GonNa be the real logistical operational challenge between January and July. Is that because you don't have the you might not have the workers back. Act that you need to do the full ramp. You don't have the workers it's that you've got what somewhere about three hundred fifty two four hundred that we're grounded that we're with airlines. Now you've got another two hundred fifty to three hundred somewhere in that range that have been built but have not been delivered yet. It just. It's it's not a case where you can just flip a switch go ahead you fly off and go somewhere. It takes some time to get those planes back in service Phil Great to see you. Thanks how do you feel about and Phil had mentioned mentioned this but Dennis Muilenburg. We'll be speaking tomorrow's deal conference. CNBC we'll have live coverage of that event. Starting at eight thirty A. M. Eastern time coming up a reality check on the real real. What a new CNBC investigation uncovered today that sent that stock lower plus facebook shipping out its first Puerto TV devices today? We'll tell you how it stacks up to its competitors in the big battle for your screens fast money coming up. Welcome back to fast money. Shares of the real real or a four percent since the online luxury consignment marketplace when public in June the company reported earnings last night told investors that they are growing but the question is at. What cost is it sacrificing quality for prophets and why are some employees sharing a very different reality? CNBC did a deep dive into the company. Here's a part of what what we found in our investigation. The real question. Did you actually see fakes. Make their way onto the site for sale. Yeah Shenice parchment was a copywriter for nearly three and a half years at the real real warehouse in Secaucus New Jersey but says the team she managed did more more than just write about designer goods they authenticated them to do you think. They had enough training to authenticate these luxury bags. No I don't think anyone. Anyone had enough training to authenticate anything. The company declined repeated requests to go on camera instead. Sending this statement saying in part we stand stand behind our authentication process and will always work with our customers to make things right and if there are there is a question about the authenticity of an item purchased from the real real. We refund the the purchase price upon return. And this is a great report. You can catch the full report by Andrea Day on CNBC DOT com carrying your shareholder. But yes yes. This is a concern. I would think ten percent in response to this report right. Well particularly where real real to you know twice in your name it you know it's still gonna be real grind however I do think this is a widespread Issue for the industry at large. Not just them but they are think of them as soon as the leader in it so they need to fix six this I think they will. I think they'll do what it takes but you know they got some some some work to. WHO's the other industry players that? When and you saved for industry at large stuff consignments dockworker ucs well ebay or I? I am not a wife will buy stuff on real real but for me. How do you trust in any of this going forward? Is it the handbags. Trust is the belts that so you don't is the shoe. I I wouldn't know how to even think about this with tremendous headwinds and that the interview. She said there's people that don't know how to look at anything. Forget about just bags. It's everything they are to be fair to the company. There are teams of authenticate were specialize in various things to head off. The water matter is gone but but this is a classic. This is a classic case of that place. But this is a classic example of growth at all costs because these authenticate and these copywriters copywriters mean to the people who write the little blurbs about each item are pressed to come up with daily quotas us and the Toyotas were norms. And so if you have to authenticate a certain number products every day that's a real pressure to keep up with us. So you're you're coming right at the conflict between The ability to kind of essentially produce When in fact the the like you would think real reels core mandate is to make sure that everything everything is authentic? Because that's what people are going to die And if you look at the stock I mean the numbers that they reported were actually quite good. Third Quarter. Sales were up fifty five percent margins and the Guidance Haydn's for for two thousand twenty. Were very very strong so The pullback here is certainly it's it's an existential question. Is it a viable. I don't think it's a Bible here right right now but again You know this is. This is a report that I'm sure an enormous amount of work was done on Getting at exactly the authentication process and understanding for investors. Astor's is going to be critical right now. I was speaking with Andrea about the report earlier today on the exchange and she made the point because we mentioned Ebay is one of these platforms that resells goods. There's has no promise made by Ebay but there is a inherent promise made by the real real because the founder has said. We don't sell fakes and it was. It's it's a categorical statement. No there's no wiggle room around that we don't sell fake. which is the problem with this whole thing? That's that's something that you wonder. How much do they want to press this in terms of the customers will they start backing off a little bit and you were talking about the mandates of how much they've given day that starts to be a factor as well? I mean that's something where you'd think they'd have to say we're going to loosen up on that. Yeah it's too important for us. We've got to have this authenticated to issues. There's a lockup expiration in December so I'm Christmas and also the IPO price was twenty dollars. It sort of found that twenty dollars mark thereabouts so keep an eye on that because a lot of the algorithms and electric trading platforms put that into the Calculus when people trade could this help the likes of a tapestry or a course the threat was that the price point for a coach or a course bag was competing against LVMH and now there's a question about authentic authenticity. Do you go back to uh-huh question right. If that was pulling away right the reverse of that probably would have been reminds me earlier when you said match you know. Has This issue or twenty or thirty percent. The people fake and you find that something that is makes an investable than it would be for you. Real real would be uninvestigated. I think they can fix it. But no doubt this is This is a problem. All right up twitter CEO Jack Dorsey throwing some serious shade facebook as a social media wars heat up. We'll set this drama and speaking of Jack Dorsey shares swear getting hit ahead of tomorrow's earnings but one traders banning the software. Hey off on the results go anywhere much more money right after this. Welcome back to fast money facebook officially entering the fight for your living room the social media giant begins shipping its new TV portable device. Today Eh Julia Carson is here in the flesh. The Nasdaq with all the details Julia. Melissa it's great to be here and that's absolutely right. FACEBOOK's portal. TV starts shipping. Today Day is a one hundred and forty-nine dollar device and it's designed for making video calls your TV set using facebook messenger or face. What's what's up now? The device has a camera camera. The detaches was part of a bar at the top of your TV and it comes with a remote will. It enables users to listen to spotify in St shows. FACEBOOK's watch coach this is really about communication and those video chat calls as for privacy concerns the camera which is designed to track their movement around a room can be covered up. The microphone can be turned off now while facebook will not generate any ad revenue from the device. At the moment it could do so potentially down the line. FACEBOOK can get people to spend more time with facebook's products on their big-screen TV that could give facebook access to the fast-growing connected. TV advertising market spending on ads connect. TV's is expected to grow nearly forty percent this year to seven billion dollars. That's according to emarketer and that number is projected to surpass ten billion dollars in the US alone by the year. Twenty twenty one. Of course all of this comes after just yesterday. FACEBOOK announced a new logo in all caps will appear on its different brands to show ownership type of the likes of instagram and WHATSAPP. Now twitter CEO. Jack Dorsey taking Javad this news. Dorsey tweeting twitter from twitter. Now Dorsey really has has been taking aim at facebook lately just last week. He announced his plan to eliminate all of twitter political an issue ads from the platform. He made this announcement in a tweet. The very moment that facebook released its earnings The Battle of the social media is kings first on the Portal TV. Do we have any sense of whether whether or not they will use what is picked up by my crime that has left on in order to sell ads. They are saying for now. They're not going to be selling any ads on this device and they are responding to those concerns by. Look you could slide this little thing where you can put the you know the cap on camera and you could physically turn off the microphone. So you don't have to worry about whether or not you have to. You know like with Alexi. Because they hail accident turns on. But maybe you don't know if it's really listening to you the whole time so. Some people unplugged their Alexis. They're saying if you want to take that extra step and you don't trust them to disable the camera and the microphone. You could sort of physically do that yourself or they're not gonNA categorically at this point. SAY WE'RE NOT GONNA use any any data cold from an open microphone own. They say they're not collecting. Data from open microphones. They're they're aware of the fact that people are wearing and they want to reassure you if you have those concerns you're probably not the target for this show of hands on this desk. Who put one of these? TV deportable TV devices in their living room. I already have Alexa. What's the difference? Alexa Alexa Amazon. Says that's not listening. It's got to be listening listening to hear Alexa hosting yeah host of other things. I have no problem album with this but it gets facebook is just throwing it all. You got to give them credit. They're up forty eight percent year to date. They are just throwing everything at there. There have a target on the back for DC. And they. I just don't care anymore. They're just cramming everything down the channel and seeing what sticks questions like what screens are left for them. They own the desktop ads. They own the mobile ads which are far more valuable audible and now they're saying okay. Let's make a play for the big screen people spend a Lotta time for TV. But I think you may not be afraid of the of the privacy issues but the real questions for me. I use facetime on my phone and it works great so I just don't have a need for the communication on my flat screen. TV's and they would have to convince me that that's a real about if you have kids and they wanna see their grandparents or something like that. They don't have a phone yet. I know everyone gets gives the kid a phone very early. But if they don't have it that's not my kids talk to their grandparents on Alexa so it gives them the ability to call me on on my cell phone from Alexis. Well facebook is doing this. You gotTa Wonder Apple Wants to own the TV. Also if this is a Bloomberg for apple to go in after the I mean apple is known for not being the first one on a particular technology but using this as a blueprint for what they can do to capture that TV funny because Steve Raises Hand. I would actually walk around my house and look for any of these devices and make sure they were gone. We'd been for bugs. Wissel the whistleblower. Juliet thank you. Great to see Julie rates be here up next the galactic struggling to take off since its IPO actually its public debut but one analyst says the stock. Could it be heading to the moon. We're going to be digging into that. Take a look at the Kramer Cam gym talking with the Twi- Leo CEO. After the company had to re are you released its earnings guidance because of a calculation mistake that interview coming up top the hour on mad money we're live at the Nasdaq market site in times per month. For Best Celeb- welcome activists money. It hasn't been hip to be the square. This stock is under perform the broader market in two thousand nine hundred ninety but options traders are betting for big things and square reports tomorrow after the Bell psychos and San Francisco with the action action. He might there so square. Did see about two times. The average daily options buying when I was looking at this earlier today was implying. A move of about eight point seven seven percent one way or the other by the end of the week. That's well above the six point three five percent that is averaged over the last eight quarters but probably make some sense given the fact that last quarter we so a very big decline in the stock much larger even than the one that is implied by the options market right now so the sentiment overall was fairly mixed but one of the traits the largest trade actually early that I was looking at was the weekly sixty three sixty six call spreads. Somebody's spent about ninety six cents for that a thousand times. So that's making a bullish bet that it's going to go through that sixty three strike price by at least the nearly dollar that they paid so they would be breaking even around the sixty four level maybe looking to that sixty six level or even slightly above so at least just one trader is making a bullish bed going into earnings but looking to risk relatively little to do so all right Karen. What do you make of square even following this for a long I have? I don't own it I think I did thirteen. Maybe sold it like sixteen. I Dunno US clearly. Missed the whole right here. It's interesting I like the company. There's a lot of interesting things going on. Square Capital Square Square. Cash is interesting. We've seen some big numbers in the payment space The valuations a little rich for me but not crazy. It's down to get to one hundred. This is pretty pretty significant pullback. I don't own it but I do like it evolved. Andre did I owned it from thirty better luck in this one I did sell it. I didn't sell it at the top. But I sold it in the seventies and for me I would need to see a lot. More proof about guidance going forward and their future fundamentals to get back I'm longest doc And I've been in it from An early level and of also traded around it and I have a court position left. I think the salad caviar is very good news. I think stabilising of of a station organic growth is very good. I think I think square cash is very exciting. I think their stickiness on the platform. So I'm in what remains in this position. I like what the companies do and I stayed there. We'll have really showed us how how cutthroat yeah that aspect of the business. A little bit of pressure on her though. Melania you look at. VCU Look massacre. You look at pay tally. Some of these named great move to the upside now. They've actually a lot of easing back at square. Being part of that whole thing I think it creates an opportunity I liked. I think they're doing a lot of things right so both I would imagine that they're going to be able to knock it out of the park. We actually have a news alert here to get to. Let's get to lovely picture with the details. Leslie that we're here at at the Greenwich Economic Forum just off the stage with notable investor avenue capitals. Mark Landry. I asked him about whether he agreed with Leon. COOPERMAN pulse accuser. Joan believed that stock market about twenty five percent. Senator Elizabeth Warren is elected. Take a lesson I think the best trade out there today is that you're you should go short the market the minute. It's clear that warns nominee. I mean I. I don't know if it goes on twenty or or the nominee because that's when the market is gonNA realize there's a real possibility today it does being discounted very very heavily. I don't know if it goes down. Twenty five percent. But it's definitely going down ten to twenty five so I I I don't know what number is but it's not going up so now it's noteworthy because Lacerra is a well known democratic donor having supported Hillary and numerous campaign. He described his rationale for why he believes the market would go down with the war nomination. saying that. He believes that she's going to raise taxes. Quite a bit That fewer there would be more regulation under a Warren Presidency so yet another voice adding to this debate over what a warn impressive for the stock market and the flipside Leslie Courses. Mark Lazarus distressed investor. And so that would be actually good times for mark is a market. It went down down to twenty five percents. Exactly wouldn't be bad for his own business but it might be others out there listening all right Leslie. Thank Hugh Leslie Picker It's interesting that he said the short is when she gets the nomination. I would say that the show would happen even before that when it's clear I mean we. We saw what happens opens to healthcare when it looks like she's winning over Biden and this is early early days But healthcare you could see that chart in terms of the spread between Warren and Biden. I and when Warren gets ahead healthcare starts go down so with with with all these polls these days we have to see. There's so much green between now now and then yeah so she. She doesn't have to be the nominee we could see anybody be the nominee out of that group. So you have to do like that call waiting until you get it but just think about what caused the market run deregulation and lower taxes. Both of those things that are not part of their platform. So if you're if you're not a cap of Eur a capitalist unless you can't like what's going on the Democratic Party just can't up next final trades vinyl trade thief Steve. I'M GONNA go financials fidelity that's going. Higher buyers are in their rotation into transports. They

FACEBOOK CNBC Walgreens US Karen Fireman Fed J. P. Morgan Melissa Arab Boeing CNBC Dennis Muilenburg Times Square Steve Tim CR Tony Dwyer twitter
Fast Money 06/08/20

CNBC's Fast Money

47:05 min | 9 months ago

Fast Money 06/08/20

"Fractional shares trading is now available for all fidelity customers on the fidelity, mobile APP by US stocks. Ats Commission free based on how much you want to spend. Instead of by the share, fractional share quantities can be entered up to three decimal places as long as the value of the order is at least one cent dollar, as traits can be entered out to two decimal places sell orders are subject to an activity assessment fee from one cent at three cents per thousand dollars of principal fidelity brokerage services member NYSE PC. To right now. I'm Melissa lead tonight's Trader Lineup Guy, Adama, Tim, Seymour Dan, Nathan and Jeff Mills coming up fast, Boeing soaring sky high, but the chart master says this monster move could be telling the real story about where the market is headed Carter. Worth joins us in moments plus zooming higher. We'll tell you about the big news out of China. The ten tesla shares into overdrive and later the General General Mills that is taking the mound to pitches next best idea by Jeff Hill, says this gaming sock the total home. Home run, but we start off with the reopening turning into a record ron as closing a new all time high for the first time since February meantime the Dow is on its longest winning streaks in September and the S&P, five hundred now positive for the year in this comes a force as all fifty states are now reopened in some form from the coronavirus shutdowns, and as cases are starting to rise some states reopen the longest, so does the market's resilience in spite of this prove that the rally has staying power. Guy. Remarkable isn't it again? A lot of people say this is pretty obvious. It was easy clear. It wasn't easy for me. Number One and I'm not going to all the sudden change course I mean I respect the price action. You have to absolutely respect it, but you know one thing I'll point out. Is this March? There were a couple of days where we saw what I deem. Deem back then indiscriminate selling. I said it was a good sign. Because maybe that would lead some capitulation and today wasn't indiscriminate buying to that magnitude, but you did see hired. See side did see most stocks, and the obviously saw the vix higher, so maybe we're getting close again. This thing was gonNA. Fade out at twenty, two hundred and the S&P were four hundred handles higher. But you saw some things today I think that should be a little bit concerning. Dan Nathan what would it take for you to become more constructive and taken seed that the market? Has this price action? You missed out on some of the upside here and maybe it's time to join the party. So I missed out on a lot of upside. I mean I was fairly well convinced. One guy was talking about those levels of indiscriminate selling in late March. Would did we have back then? We only really had the Fed. We had the monetary stimulus. We did not have the fiscal stimulus at that point, and we also had very little clarity on how was going to affect the economy despite the fact that much of it was. was being closed over that couple week period of time. So you think back now and we really had I. don't know people are just calling a straight line hired here and there's still a lot that we don't know about the reopening. This is still a lot. We don't know about the course of the virus and what it means for the economy I. Think it's important to remember that we still have twenty million Americans that are. Are Unemployed despite the fact that the Fed's balance sheet has gone from four trillion dollars last fall to about seven and a quarter this at this point in the year, so to me this liquidity thing it's a sentiment thing and the markets crawling awhile worry I'll just mention one last point I mean I listen I think we're going to have sustained unemployment for the balance of this year probably around ten percent probably for a good. Good part of twenty twenty one, you tell me what that does to corporate earnings and you talk about valuations here. Maybe it's not one hundred and thirty on the S&P. Maybe it's one forty. Maybe it's one fifty. It's still really expensive, so I just think if you're like me and you're a loser. You missed out on this last month and a half or so I. Don't think you'd get in right here. Jeff your thoughts. I have to agree with a lot of Dan, said honestly you know I think what we're seeing right now and I talked about it. On Friday it's this surge off the bottom. You can look in so many different places around the world whether it's German industrial production China car sales, but I think there's a difference between that surge off the bottom and a clear path to pre virus levels. It feels a lot to me like we read a ten. We went to a two, and now everybody's cheering. Because we're one hundred percent right a four or not at previous levels I think the. The prospect for additional stimulus is very important. I don't know whether some of these good data points is going to at the stall out in Congress a little bit I think if it does. The market rate may react to that in a little bit of a negative way, but I think the fundamental picture really rests on a couple of things at wrestle on making sure that we're continuing to eat credit distress, and that we're able to preserve some level of consumption and I think policy has done a good job of that so far, but I do think there are questions as Dan said. Seventy five percent of unemployed right now labelled as temporary versus other estimates, NBC are saying fifty seven percent, so that range leaves a pretty widespread of outcomes there, and if you look at the most recent report, actually three hundred thousand more people were labeled permanently unemployed, so we're continuing to increase that permanent unemployed. You, look at sectors like retail restaurants. Hospitality to take a while were those sectors to come back from a job perspective and I think even when they do actually possible that you'll see consumption decelerate because the earned wages for those folks are actually less than what the receiving government benefits, so the consumption recovery might actually be a little bit front load in the last thing I'll say is that fundamental picture is going to have an impact on market leadership. We've seen this broadening out where this rotation. If you want to call it that into value cyclicals so on and that's. That's been really helping the market. Make the most recent advance, but if you look at four, EPS estimates for value. They continue to fall relative growth. Even though we're seeing this broadening out into cyclical, so I don't know how long that's sustainable with the fundamental sharp describing, so we'll see what happens, but the dance point, but everybody's waiting for the market drop. It usually doesn't so maybe it just comes down to that for the time being so, is there any danger? Tim In your view to some of these values stocks that have lifted more recently compared to the growth stocks. I'm not so sure that the value stocks are the ones that are vulnerable i. think if you look at momentum and you look at growth, that's where I think we have the lofty locked EPA's I I recognize that industrial names and cyclicals are GonNa hurt and we're gonNA, talk about banks with like a little bit, but you know I. Think you have a case where you've got a lot of these value names that were beaten up well before the crisis i. I mean Fedex transports had been in bear market for a year and a half going into this so I think the expectations that was set very very low, and if you'll get rotation in this market transports which are up thirty four percent in three weeks three weeks. This isn't Boeing this isn't an airline. This is the entire transport sector that's up thirty four percent, and it's outperform. The SAP by fifteen percent during that time small caps for the last fifty six day. Day since March eighteenth have outperformed the S. and P. by eighteen percent. If you look at all, these sectors that people say are dead in the water one I think this rotation isn't just an overnight thing and to these are sectors that were suffering well into this, so watch out for the Fed on on Wednesday i. don't hear enough chatter about that and you know I hate we. We oversimplify used these terms, but but good news may be bad news for. For for the Fed and the and the the White House or the administration was out there this morning, talking about more fiscal based upon June numbers these are these are things that are very very important for this market here but but again the the what we're seeing in terms of the out performance of some of these industrials in value overgrowth i. don't see why that can't continue especially when you look at the relative performance now only since this started. And I mean so march six March fifth wherever we say, we went into the real tailspin, but how about back the year and a half before that and I think this is part of that catch up. Just just quickly Tim me when you say good news could be bad news. We used to think that way before, but I mean unless you think are a rate changes in play. How can good news be bad news at this point? The, fed has thrown everything they can, and I know we all lean towards the Fed will overstay their welcome here. But but you can't tell me that a payroll number and jobs market which is the two things that. Whether. They say this or not are the things they focus on all the time. We've got a lot of good news. Coming out of at least relative performance jobs, not good. These guys talked all about where employment may be. Markets effectively backed to all time highs. Fed has to be as friendly as they were, and I think people need to be careful about that. Our next guest says it may be time for this rally to take arrest. Let's bringing Tony Dwyer Canaccord genuity Tony Great to have you with us all right. Thanks. For what level of the market do you think is is fair at this point so typically when you break out of a trading range of you, remember we called. Called it the frustration frustration phase, and we're waiting for a break out of that to go into the tanks, banks tank tanks, being industrials all when you break out of a trading range, typically technical analysis Carter and all the guys would tell you that you take the spread of that range and added to the break-up point, and that your short term target so that would have been thirty one fifty because the market broke out. Out in about twenty eight, fifty or I'm sorry, twenty, nine, fifty and it a two hundred point range, so it exceeded a little bit, but Tim's point. Everybody else is the move in some of these values sectors really extraordinary, for example, the B. K. access. We upgraded to offense up thirty one point nine percent, the industrials up twenty percent equal way to consumer discretionary up twenty one percent, so I I think the real story here. Here is that there's been too significant bull markets off the march low. There's been the stay at home bull market that carried the mega cap stocks, and dominated the thirty percent plus performance, the low, and then that sixty minutes interview by the Fed was extraordinary, and that is the pinpointed time. Were you saw this move back into the economic reopening market, so I think there's really been to bull markets that have kept the index going. A Tony Great I'm glad you're with US good night for it so obviously. Stand Druckenmiller A. Couple of weeks ago, maybe it was may twelfth, or so talked about the equities, being the least favourable environment. He's seen as squares. I'm paraphrasing. But today basically came out and said he's humbled. The understands what's going on. You know. I feel that way while humbled. But can this just continue based on the simplicity of money, supply and dollar for dollar? Move with the S. and P. Five hundred, and maybe you know as much as I like to make this complicated. Maybe it is that easy. Well. But again guy, it's been very different, so if you're if you're in, you know some of the big names like Microsoft right, or even Amazon or Google or some of those other names. They haven't really done a whole heck of a lot since. FOMC meeting on April Twenty eighth and twenty ninth it really it really has been a pause in that space as everybody's point, you've seen this ramp in the cyclical spaces in the banks and tanks, and again the way to consumer names so that it's really been two separate markets that have kept the index going. It's not the same stock that just ramped, and Rampton rammed and Ram so i. think that's a really important differentiator and we found like for example. Give you a you know you guys all know mammoth data guy desktop p. five-hundred has been above the fifty day moving average More than ninety percent of the S. and P. Five hundred has been above the fifty day moving average I think today's the eleven day when I look back at the prior occurrences. It's not a tank that never that's since nineteen hundred never happened right before right before you really go back into a bear market, it typically is closer to the beginning of a bull market, but it's also led to periods of consolidation. So you know our call has been that if if you if you went all all in on the economic reopening trade a couple of two three weeks ago. Not such a bad idea to expect a little bit consolidation here. Hey Tony. It's Dan. Quick one for you. Okay, so the last time the S&P five hundred here was the last week of February at that point. Our country was starting to come to the realization the economic disruption of this oncoming pandemic last year in two, thousand, nine, hundred, ninety, five, hundred thirty percent, but we had an earnings recession. Most strategists were expecting earnings to the client even this year in twenty twenty, so we're back at these levels. We front-loaded all that stimulus and assistant. We know that there's massive headwinds. What do you do with s and P five hundred? Because I'm sure you're cautious that then at those highs. Downgraded the market in January and we're back to those levels of both you for you now you for you optimism. In many cases, a lot of the call ratios, all those internal technical kind of sentiment gauges have gotten back there, and you know again my our call to get offensive which you know, even taking a little bit of a pause here that. That called offense and had nothing to do with the S. and P.. Five hundred and I have no idea. What are you pay for for infinity easing I? I mean, is it? My Multiple Assumption is twenty times. It'd be twenty, two twenty, four twenty five guys like making make these numbers up all day long, but again I think what I have to. To do is fall back to history and say okay. What is the pretend? What is the markets telling us when they get this broad and two guys point like I. Kind of felt scared a few weeks ago when we were upgrading as Stan was saying, it's the you know craziest market of all time, but the momentum is there I think the momentum is. Is probably played its course because again this the second half of this rally off of that March low was in different stocks so now you really have kind of to whole segments of stock market. That's had a hell of a run. It may be time again to go sideways versus that down big or up big just for the next month or two. Tony Great to speak with you. Thanks for having me mouths last Tony Dwyer Canaccord genuity. Tim. Seymour I'll go to you on Friday. We had a special show at six o'clock on Bass, money five, and in those we do. If the market were song. What would it be and I wonder given that the rally has extended itself. And we are at record levels of the Nasdaq. If you want to change your song selection. Good point so to remind our audience who are tuning in at six o'clock, which is a great time to turn into fast money every once in a while over the summer. I chose the clashes. Should I stay or should I go and I referenced? If I stayed, there will be trouble and if I go, it could be double and my point was. This is a market that a lot of people of Mrs. Been Wall of. Of worry a and you don't necessarily want to hang on here because we're all talking about fundamentals being challenged, but there's a lot of money managers that get fired when they're missing a bull market, especially after a massive bear market, not being in the market is where people have a lot of problems, so no I wouldn't change it. Obviously, you know what we did on Friday with something I didn't think we could can continue to do. Even today just on a short term basis. It looks very overbought. But that song, which isn't one of their best, but I think it's still says a lot. And then you've got a lot of blowback on twitter for the choice of it's. Sort of your like it's not the best song, but anyway guy. I'll go to us well. You're a great band and they've done better than that. All Right? That's that's fair. Guy. Would you amend your Song Choice? I love my song choice the clashes that the most overrated band of all time in my opinion and I want to mend, but I'll add to you Tom. Petty Fan I know. Tim is out of Jackie. Correct him. while. Give you one DNA. Lucky sometimes you go. I'm sorry what was hanging. Buddy! Reason to Tom Petty. Tro Even the losers get lucky sometimes. Okay. HEARTBREAKERS! Coming up Boeing shares lifting off and lifting the Dow along with it, but has it come too far few fast there you go, Tim the master break down where the stock could be heading from checkout shares the tesla posting a record close. They will tell you just what happened in China that electrified this rally fast when he's back into. Fractional shares trading is now available for all fidelity customers on the FIDELITY MOBILE APP by US stocks and ETF's commission. Free based on how much you want to spend. Instead of by the share, fractional share quantities can be entered up three decimal places as long as the value of the order is at least one cent, dollar-based traits can be entered to two decimal places sell orders are subject to an activity assessment fee from one cents to three cents per thousand dollars. A principal fidelity brokerage services member NYSE SIPC. Later fast money check out shares of Boeing taking flight on a big call from Seaport Global, the firm initiative coverage with a buy rating and a street, high price target of two, seventy, seven, four, saying the worst is over. The stock is at an attractive level meantime Goldman Sachs raise its price are going to Boeing to two thirty eight from two Oh nine, and if you haven't been paying attention, the stock is on pace for its best month. Ever the master though says there's more to this rally than meets the eye. Cornerstone macroscopic worth joined the. Hey. Let's look at Boeing, but I thought I just talk about. Is it really value growth issue is at Sigel on single, or is it just? Money chasing beaten down names. It's an important concept. Take a look at the first chart. It's a comparative and what we're looking at of course balling. You see there, but I've compared to. American Airlines too well. Caribbean and assignment properties now the correlations virtually one hundred percent one could say oh, sure of course Boeing and airlines and Travel Royal Caribbean but it could Simon private in there for a reason I could've put a regional bank. Boeing property are in the SNP growth index American enroll Caribbean are in the Value Index. It's not about whether by it's just that a lot of stocks that have been left for dead are being played. It's it's a money flow issue. Now compare the next chart. I put in the SNP. You can see this very clearly. Is it because Boeing's grow throughout aluminum or American? Airlines is value Roy criminals value. Or Simon Property, the biggest reader once was is. It's just that sometimes. There's money flow being down names. They were all down between seventy and eighty percent on the way down, and they've ricocheted. I. Don't think it's specific devoting, but since Boeing is the topic of the day, let's look at Charter. Boeing, here we have final chart a great winner at the turn into a loser of course, a massive wipe out a peak to trough decline about seventy five percent, and then this tremendous ricochet so you you heard today. Some price targets are being raised to the current price two hundred to thirty. That's where it is trading. Others are to seventy. The overhead supply comes into play around to waiting. You can see there the rain which broke down so I do think it has more to run, but I don't think it's specific to buying despite what one analyst or another might think I think it's really just about money going after certain securities at certain times. So what's the fallback level Boeing specifically Carter? Meaning how far I can get to the to seventy, and even up to two ninety before you really encountered overhead supply, two years of trading from which it broke down. Interested sellers lie in. Wait up there. Carter always great to speak with you. Thank you, Carter Worth. Jeff Mills, you want to go Boeing or or just the broader notion of money into being down stocks. You know what great minds think alike because in my notes I almost had what Carter said exactly and the point was that bullying is caught up in this airline cruise line reopening train. He talked about some of those correlations. The charts look identical so I don't know how idiosyncratic this really is to Boeing. Maybe the momentum continues because of the technicals I can see that, but ultimately I think the fundamentals are still challenged just the point to some of the correlations regarding the charts that Carter just had up I mean bowing to the S&P five hundred. Is Point four two so pretty low, but if you look at Boeing versus the jets ETF, we talked about last week, I think. Think again virtually one hundred percent it's a point nine three correlation, and then looking at Carnival cruise lines something that's not even related to Boeing at all as a point seven five correlation, so those are some of the numbers to go with that chart that Carter just put up, but I can understand why people were getting excited. You know travel. Demand is returning American Airlines said it's going to increase its capacity for July so there's evidence that people are going to fly again, but to my point earlier in the show. Is this about return to normal, or is this about a ricochet off the bottom in terms of activities, so if you look at TSA data as an example? Passenger daily passenger travel is almost tripled from the low, but that tripling still leaves us eighty seven percent below where we worry or go, so the big question is are these cash-strapped airlines actually going to add to their fleets in a way that Boeing was expecting that investors are expecting I think there's a major question there because there are still questions about business, travel, demand, international travel demand, and so forth so I'm still skeptical outside of this movie near-term Momentum Push Tame. Convince him as a shareholder in both Boeing and airlines. What do you say? Well I can't I can't argue with the fact that orange of ninety four percent in fifteen days Delta's up ninety four percent in fifteen days. It's crazy, but I'll tell you Boeing get a billion ten billion dollar bond deal about a month ago. There CDs, which is essentially a play on on their credit, exposure or the risk there have tightened one hundred and fifty basis points. They've outperformed John. You may say so so what it trades wide g always has or at least the recent run. They basically said they're going to be free cash flow positive by twenty twenty one. The street actually has them being seven billion cash flow positive by twenty twenty one, and if you listen to what they're saying about, guidance from their airline partners is that they're only scaling back about eighteen percent over the next two years in terms of delivers. They would've taken so this to me. Is really a credit story? It's a couple of people are very very concerned about the profile rates ten billion. Billion, they have another fourteen billion and revolver. They cut the dividend so very different credit stories airlines are going back to doubling capacity in July. which is what he's talking about so is always about timeline for airlines, and therefore it's about timeline for Boeing and Boeing raise a lot of capital. Sixty percent of their business is defense and global services. People forget that so that's why I'm long Boeing Guy. To sixty two that gets you the basically. The halfway mark from the all time high in February of Nineteen to that night eighty, nine recent low, so I guess technically that makes sense I think that lines up with what Jeff then Carter, saying as well all right coming up betting on the banks financials have been on fire and top banking analysts Mike Mayor says the rally is just getting started. He'll break down his top picks and later we firing up for the. Firing up the grill, excuse me for this sizzling stock with got beyond me going above and beyond today fast monies back into. Welcome back to fast money and other strong showing for the banks in today's market rally in the financials have been on fire the financial spider ETF. Now more than twelve percent over just the past week. Our next guest says this is an optimal time to be betting on the banks. Mike May as a senior bank analyst at Wells Fargo, securities he joins us on the CNBC newsline a Mike always great to speak with you. Thanks for having me you side to green shoots in your. No, you cited the employment report on Friday also you had a separate note setting some some data on on consumer credit lending from the Fed as as green shoots, but I'm wondering. How are the shoes? Will actually blossom into plants to use your metaphor given the uncertainties in the in the economy. Luck in no uncertain terms, we remain buyers of banks. We increase targets on every large-cap bank that we covered last week. banks are among the the leaders this quarter in terms of stock price performance, and we expect that to continue Look on the one hand. These are sobering times I mean. Unemployment is over ten percent. There are bankruptcies. We still have loan losses increasing. You know two to three times. It was earnings in the first quarter. Earnings how in the second quarter, but the way these banks are still priced I mean there's still priced like the the global financial crisis, and that's a complete disconnect to the stock market as a whole, and and frankly it's a disconnected what the the bond market says about bags, the bond market says you know banks or a safe is the average corporation whereas the stock market says they're in big trouble so at the same time you hobbies green shoots. You had the jobs report. You have new data from Friday night that shows consumer loans increased week over week. In the banking industry for the first time since January so you have that you have less requests alone referrals. You're seeing paydowns of those March loans that were made by the banks consumer. Spending is improving, so what we say is, it's less bad less chance for the recovery to be. An l. w. a Nike swoosh a backward checkmark, or whatever you WANNA. Call it. There's less chance to that extreme tail risk and at the same time. Time Anyway. Banks are a resilient and are able to absorb the body, blow, and still grow book value, and still support the economy, the other bit of information, and the Friday before from the Fed is that banks have lent seven hundred billion of new loans that seven percent growth in the banking industry loans year to date so this time banks are not the problem as they've definitely work in the Global Santa crisis this time banks are part of the solution. Here Mike Stan I'm question you seem to really love the money center. BANKS CITIBANK BANK ERIC JP P.. Morgan I find it interesting that they topped out the first week of January and they were obviously the hardest hit within the banking sector. Why is it that they really underperformed from? There is relative to let's say the investment banks, Goldman Sachs and Morgan Stanley that are only about twelve percent off their q one highs. Look you can't ignore the fact that the rate environment is still awful. Okay, I mean. This is really bad. And so the money center banks have more loans than the pure play brokers like Goldman, Sachs or Morgan Stanley that would explain that having said that as we start seeing reinsured as you start to recovery, and as you go through this crisis period, you're really seeing the value of scale Goliath is winning and Goliath is winning more than ever before during this crisis period, so compared to playing the bank's. City Group, which is our top pick by far followed by bank American. Jacob, Oregon, you know I have half be revenues, and by the way capital markets are doing quite well better than people expected and far better than implied in the Fed stress tests, and the other thing is, and this is really exciting. Back Gal are the share gains of the largest banks due to technology. retail customers have been jolted out of the bank ranches and forced to use digital banking. This is the customer choice, but that's going exactly where banks strategic plans have been going to in the last two months. You've accelerated the digital acceleration of the banks by like two to five years, and the best digital players are Bankamerica. j.p Morgan and actually city moved up here recently, too. So just one quick follow up. Is there a chance that this lack of performance from the highs and know they've done very well from the lows, suggests that the back cafe twenty twenty, though might be a much tougher slog as it relates to capital markets, as it relates to bad debt, as it relates to just a whole host of things where they touch the economy, a much broader way than some of these other sectors that have come back right to their prior highs. Well, yes, yes, yes, I mean we have lost is increasing two to three times. We have capital markets falling off in the first quarter level. We have net interest margins under pressure. That's interesting even with that. We see these stocks with a decent upside of like you know one fourth to one third over the next year I I think what the market's missing is. This is not two thousand and eight. This is two thousand and twenty. When you've had a decade of increase in capital capital twice as much as it was before. You've had a decade of that stress tests. You have a lot more of liquidity than before I mean this is. It just recently by investors act like the global crisis was yesterday, and they're giving banks those evaluations so yet. It price like someone's going to blow up a by the way you had many stress test in March and look at the performance. Did. He Group back American Jake Morgan for that matter. Even you know Goldman. Sachs to a Morgan Stanley they all excelled during that period, and really being part of the solution this time. Nights always great to speak with you. Thank you. Thanks for having me. Mike Mayo well spargo. Guy Dom Mia I'll go to you on this. Your thoughts on the banks. Well as bad as I been broader market, one thing we've gotten right been the banks and you know when J. P. Morgan was in the eighties the bulk as we were trying to make look you know. They just told you tangible book with sixty two dollars. The right multiple in this environment is probably like one point eight one point eight five, and that gets one hundred fifteen dollars, stock and Lo and behold basically here we are so I'm with Mike. In terms of the bank's not being the problem. I've never suggested they were. They've had a big run and my sense is. They probably have some more room to the upside. Upside so I'm with Mike Malin this one all right coming up and investors best friend why tails are wagging in the options market ahead of cheese earnings, tomorrow will break down the action, but I the general is taking the mound to pitches next best idea why Jeff Mills thanks this gaming saugus total royalty. Yes, that's a hint who make his fast pitch when we return. Welcome back to fast money stocks rallying today, but if you're looking for a way to play, catch up our Jeff meltsa stepping up to the plate with a fastpitch one name that could be a game changer for your portfolio Jeff, taken away. Right near it is ninety nine right down the inside corner. I know that this stock is up a ton, but I think draftkings is definitely worth taking a look at here I. Think for folks who are looking to get into this name. We can look at a chart and a little bit, but you're working on about at ten to twelve percent pullback right now, so I think there's opportunity in a company that has some pretty good long-term prospects. Now sure could there be. Be a pullback had a big run. Of course it's not necessarily the safest place in the world, but I think the company also has a lot of things going forward that over the long term. If near term volatility isn't your concern, it's definitely worth a look here and the thesis really revolves around three elements the brand there is sort of a virus dynamic going on here I. Think and then it does have some big gun backers that I wanted to talk about. About so first of all the brand I mean, it's an incredibly recognizable brand in a space that, at least in my opinion, is growing, and is going to continue to grow very quickly so I think they're pretty well positioned to maintain the market share, they have to continue to grow market share as the space continues to expand you know fantasy sports online betting on sports continue to grow at a double digit clip so I think they're in a good space as it relates. Relates to that, and then I didn't think it was interesting. It's one of the top names added on Robin Hood. So not necessarily that those accounts are driving the stock, but just in terms of brand recognition. That's a coworker on Robin Hood that tends to be the target audience for something like draft. Kidding, so I think that is evidence of brand recognition air just the fact that so many people on Robin want to own the name in terms of the virus dynamic. Live sports probably coming back sooner than later. Hearing about the NBA and others are probably soon to follow, but it's not necessarily clear that we're going to have fans in the stands, so I think there could be this spending redirect associated with draftkings here where people say you know what I'm not gonna be able to buy a ticket. I can't go to the game, but I'll bet on the game instead. So I think that could be an introduction to a different audience, potentially an audience that ends up being somewhat sticky so another possible propellant their growth. and. Then also some of the big name backers that I mentioned. You have the likes of Disney Jerry. Jones, Robert Kraft the list goes on, and although that's not directly correlated. With with legalizing it on the state level, do think that's GonNa come California. Texas Florida New York. These are states with huge populations that have yet to legalize. All of those could be potential catalysts. Time for questions and Tim has one tim. Yeah. Hey, Jeff, so I read this whole secular story, I guess my concern. Is that this was? The only game in town during a period when There there wasn't a lot to focus on while people are staying at home and I. Guess So my question is I wonder about? Where's the moat? There's so much competition in the space. Yeah, they may be out there I, but this evaluation what protects them from from the competition? It's a good question and at this valuation I think it's a very fair question, but I do think part of the brand recognition is there and I think that can propel. As others call into the space and you mentioned scarcity, but I'm thinking of scarcity kind of the other side of it, and at least for some time they're really the only pure play in the space so right now if you want exposure to the growth in online sports, betting like this is really the only place for you to go I understand the valuation can be a challenge here, but I think all of the things I'm talking about in combination and the brand recognition that it always has I mean there is a first mover advantage oftentimes draftkings kings. My Avid here all right now, questions time to vote. Are you buying Jeff's pitch on draft kings? Guy We don't have the blackboard things but guy. How do you vote? Can you read that Mel i? Don't know if you can read that, but it says don't know never gambled and if you look at that. What is that the? But I'll say this. I'll say this I might not know, but canaccord does because they just raised their price targets fifty and they've actually been spot on space so although you played the sad trombone I'm GonNa be with Jeff. Mills on this one, so whatever that has to do, give that news. ALL RIGHT CLEAR TIM! What do you say? Said trombone! I'm sorry to say I'M GONNA catch my hand in on this one. I think it's an interesting story. I hate the valuation. I think there's been a lot of short-covering. Dan. Yes so here's the thing I thought. That was a great great presentation. I love the story. I like Jason Robbins. I liked the potential for state with big budget. Shortfalls the legalized gambling. These guys are well set up I think you buy it on any pullback here I with him. On the valuation, it's part of stock market mania. That has nothing to do with them right now. You may have a really good opportunity to buy this. In the high twenty s sometimes very soon. ALL RIGHT TO BUYS AND Pass. In our panel now it's your turn out there. Are you buying Jeff's pitch on draft kings? You can vote in our twitter polls. Go there now at CNBC. FAST MONEY COMING UP TESLA shares charging higher. You won't believe what is using the move now. The details when fast money returns. Welcome back to pass money shares, a Tesla, revving higher on strong sales numbers out of China, the electric vehicle maker, selling more than eleven, thousand model, three cars, in China during the month of May and that is Tripoli amount sold in April today's rally. Sending the stock to a record close so is even bigger turnaround in-store for Tesla guy what you say. Well listen. This is one that I clearly haven't figured out, but I said it a couple of weeks ago. I'll say it again. That interview with Joe Kernan back in January from Davos. Back and listen to it really says something in retrospect that he feels he being Elon Musk has tremendous air cover, and the stock has acted in kind so very difficult to bet against this. I have no idea how expensive the options are, but every time you bet against this has been wrong so path of least resistance like probably the broader market continues to be higher Dan. I think it's UN-. investable at these levels in. The air cover with the trump administration. I'm not so sure that plays well for Chinese auto sales. You know I mean to me. This one makes no sense again I'm with guy I mean I know you guys all think we're a bunch of dummies, but things don't have to make sense and you don't have to buy, and either because this is probably one of the dumbest stories I've ever seen in my twenty five the stock market. Let's make this easy. Show of hands. Who Thinks Tesla is a pass pass on Tesla. Not Going to touch it. Show hands. Raise your hands. If you think tests not worth it, keep them up all four. You guys who thinks Tesla. Is a pass. Down three hundred dollars. Okay, but we're go down three hundred dollars you pass. Now, Oh, so you don't even. Know, Auburn. Play your. Game my arms going to get tired. I know okay, okay rest rest your arms. Rest your arms. Jeff Mills and Tim more. Guy You, you hesitated I asked that question, because I'm wondering you know. Obviously everything has a price, and there's always a buyer at a certain price, and would you be by down three hundred? How much do you think this stock is overvalued is basically what that gets that. I think that's fair. I mean the the real tell if amongst many, but the one that really stuck out to me was when Elon Musk. tweeted I'm paraphrasing that the stock was expensive or overvalued or something those extents and That downturn lasted a day. So I mean that really tells you all. You need to know at this point so again. It's very difficult, but again it seems as though the path of least resistance continues to be higher and the people that have been long. The stock have been right good for them Dan. Yeah this thing trades like about to by SPACEX with their stock I mean to be very very honest with you. If you look at how that stock traded when they launched that rocket into it in out of it I mean there's some stuff going on here. I just can't get my arms around I. Obviously, this is a battle battleground stock, but you know if they bought SPACEX, the stock be doubles. I'm out of it I know idea what to do with this. I mean what's interesting as you watch some of the so-called competitors, reports, much smaller players, but in this General Space Mio Nikola, and they're also moving in a way that is Let's just say off the charts Tim. Yeah. The the story is shown a lot of resilience and. I've I've also highlighted the competitive landscape, but but but who really knows I think you get to. There's a couple other dynamics. I would add I still think those last quarter. Numbers were not very good. They lost money. They sold ev credits to goose up the profits. I mean I i. don't think those numbers were that great. short interest has gone from twenty five percent free float to eight and a half, so there's been of course wicked short-covering. I think I think that number certainly would be would scare me as long because that may not rest in fundamentals although I think the bears thing does so. Yeah I the valuation to me down. Five hundred doesn't make sense, so that's where I sit and I think people know that. Coming Up, who's a good boy? Options traders are pointing to chew. We should fetch this name for your portfolio. We'll dig into that trade next plus thinking of planning a post pandemic road trip this summer. Kramer's jumping into the driver's seat chatting with the CEO of RV manufacturer the industries don't miss that interview coming up top of the hour and mad money in the meantime much more fast money into. Welcome back to fast one consumer trade is on the comeback, but the consumer's best friend trade is on fire online pet supply retailers. chewy is up seventy percent this year. A stock reports earnings tomorrow options traders are betting. The results will have investors wagging their tails Mike. Goes got the action he might. I'm Alexa, so we saw calls outpaced puts by about three to one today and right now the market's implying some pretty big moves by weeks, and after they report earnings, moves of about thirteen percent, higher or lower, but most of the bets were that that was going to be higher. We saw a lot of weekly calls trading one of the ones that I was looking at fifty strike calls. Those were trading for about three dollars and twenty cents buyers of. Of those calls or obviously, that's going to finish the week. Above that fifty dollars strike price by at least the three dollars and twenty cents that they paid, but arguably you would only do that trade if you thought that the implied move that more than thirteen percent move would be to the upside so after a very strong more than one hundred percent rally off the bottom. Some options trader seemed to think that the rally could continue Daniel pet owner. Chewy! Yeah, you know it's funny I. Mean Mike Kind of nailed it? I mean we're seeing this sort of price action in so many different names that had great momentum. We're evaluation is a stretch, and you're seeing just upside. Call buying, and that's why you're seeing. These put call ratios kind of getting blown out getting kind of concern levels, but it also speaks to the fact defining your risk inspect names in a market that feels speculative also makes sense. The main rule in trading is let your profits run right and. And kind of a cut your losses there. So this is one way to do it all right for more options action be sure to tune into the full show, Friday five thirty PM, eastern time up next year's beyond meat, sizzling higher today. What's behind this rally should just sink your teeth into the stuff that trade ahead plus time is running out. Get Your Voice heard vote. Are you buying Jeff's fastpitch? On draft? Kings go to our twitter poll at CNBC. Fast money the big reveal we come right back. Welcome back to check of beyond me. It's soaring in today's trade is a plant based Meat Company continues to expand in China inking a deal with a large food distribution company. This comes after its recent deals with starbucks, in China as well as Yum China Jeff males. This is good news. This distributor goes to retail like grocery stores hospitality as well so really a broad swath across China. Look it's good news, I mean all of their big customers right now are in the US I think like eighty percent of their revenue comes from the US. They're only big nine US customers TESCO in the UK so I think they need international expansion, justified evaluation where it is right now, so some of these partnerships with starbucks and others to get that exposure is really important I. You know I didn't like the stock a long time ago, so I certainly don't like it now. I just think that the momentum could maybe carry it higher, but it's not necessarily something that we would buy guy. Well as you know, Melissa, when we did this show at the Nasdaq and New York City's Times Square. We had a taste test. The beyond meat and I said it was actually very good, obviously as you also know things. Weren't that Rosie a few hours later with that said couple weeks ago a month or so ago in the stock ninety handle. I said I'm not fan of the product, but I love the stock, and here we are so I hear what Jeff is saying, but I still think the sucker can go higher despite my Gi Issues That is really. T- and live. Go to say GI. Gi Problems. I mean to actually specify what. Dan Nathan. What do you make of the stock? This is the perfect stock in this market I mean think about it got high short interest trading at a higher evaluation levels. It seems like the Higher Valuation, the better the opportunity for the short squeeze especially when you have announced, it's like this. Let's be frank. The opportunity in a place like China is massive. So can you buy it on fundamentals you buy on growth. Growth and growth at a very high valuation all right, let's find out if Jeffs. Fastpitch won the hearts of our viewers tonight fastpitch on draftkings of course and a total home. Run in your debut. Fitch Nice job, general fifty four percent a fast money. Fans agree that Dr King's is a by as you know. Winner and the viewers get graced with time of your life. Time for the final trains. Go around the Horn Jeff your winner. Kick it off with you. Double Down draftkings reiterate that California Texas Florida new. York once they legalize I. Think there's a lot of growth there draftkings ten. It's nice. He's having the time life. We haven't had that a long time. Good job. Brazil resources trait is kicking it weaker dollar all the resources company that means Brazil and the currency. E W Z Dan. You know my song. Friday was ever long by the fighters I'm changing it to these days one of these days. The Grounds GonNa move below your feet. I think you want to get defensive goal at Costco here defensive. Guy Dummy. President. Trump's tweet about twitter was a mere bump in the road. Stay with twit are Mel. That doesn't for us. Thanks so much for watching an for voting poll that money with the one and only Jim Cramer starts right now. Fractional shares trading is now available for all fidelity customers on the FIDELITY MOBILE APP by US stocks and ETF's commission free based on how much you WANNA spend instead of by the share, fractional share quantities can be entered up to three decimal places as long as the value of the order is at least one cent, dollar-based traits can be entered out to two decimal places sell orders are subject to an activity assessment fee from one cents to three cents per thousand dollars. A principal fidelity brokerage services member NYSE SIPC.

Boeing Tim Fed China Jeff Mills Seymour Dan Jeff Carter US tesla twitter principal Tony Dwyer Canaccord Jeffs CNBC Goldman Sachs Dan Nathan twenty twenty
Fast Money 02/10/20

CNBC's Fast Money

44:28 min | 1 year ago

Fast Money 02/10/20

"At IBM problems inspire us to push the world forward. That's why so many people work with us on everything from city traffic to ocean plastic smart loves problems. Ibm Ibm let's put smart to work visit. IBM DOT COM slash smart to learn more live on the Nasdaq market site overlooking. New York's is Times Square. This is fast money. I'm Courtney Reagan in tonight for Melissa Leo Traders on the desk this evening Tim Seymour Care Environments Grasso Guy Tonight on fast. The Nasdaq Zack. And S&P five hundred. Both marking record closes today and all three major indexes posted gains. This is different story brewing in the bond markets. Should you be worried. Need to get some answers. Plus some wheeling and dealing in the retail space L. brands getting ready to offload Victoria Secret Navy and two major mall operators strike like a deal will break down what it means for those stocks and Pete joins us from the home of the Minnesota twins. Fast pitch what's got him so excited. What about this name? It's a mystery chart you're GONNA have to stick around to find out what it is but amid the corona virus outbreak. We're GONNA start with apple analyst at Wedbush warning that the IPHONE could would face big production troubles ahead even as manufacturer. Foxconn got the green light to reopen to Chinese factories today. Josh Lipton is in San Francisco. Go to lay out. What's next for the tech giant Josh? So Corey China is a key. Lincoln Apple Supply Chain and investors are focused on Foxconn specifically and for good reason. It is the largest manufacturer of apple devices its factory in Joe is reportedly back open for business. Only ten percent of workers are apparently back. Jack still that is important because this plant is described as the most critical iphone. Production site is located only about three hundred miles from the epicenter of the the outbreak. In Wuhan and Reuters says that another Foxconn plant in Shenzhen is coming back online to set to resume partial production but will apple be able to make enough phones given these challenges to meet demand. You have seen some analysts. Think the company will ship ten percent fewer iphones than initially projected in Q.. One and what does it mean for new products on the way this disrupt plans. That new low cost fell on. That was expected next month. It's not just production. Though China has also key consumer market working for the company Remember Apple Operates Forty two stores if companies extended store closures. Though apple says that it's online store does remain open situation remains very fluid. And that's exactly why apple issued that why didn't expect it Q.. Two Guns Courtney back to you got a question for Josh Canary Yup So how much inventory do you think they have. How much cushion do they have for this production slowdown? That's a great question here. I know that's that's that's probably gonNA depend vendor by vendor. Would expect that they have a few weeks. I mean I think it sort of gets to the broader question though. Is You know it's really hard to gauge this for for analyst and for investors. Because you're still trying to decide kind of the lane the length and breadth of this and therefore how much of an impact is has I think it Wa wa. It makes it kind of cloudy for investors right now Karen. Hey Josh Tim so i. I'm here in two weeks. Roughly of spare capacity but the question is ultimately pushing out demand and is one thing. Is there any sense that there's fear of of actually rerouting demand in other words. This is a a temporary hiatus certainly is GonNa Affect February. But don't all our modelling we can see see what it means for. EPS sensitivities but does it really do anything for demand. Yes so first of all I mean that is certainly had bull come on CNBC and so some of that argument is well. We'll just push demand. Forward consumers will wait to get their products. I think that's interesting to talk about again. What if this goes on for longer than people think? How would that affect the Chinese economy? How would add infect disposable income for consumers You know I did. It's interesting last time at report. Had the chance to talk to Tim Cook. We talked in a different different way about those air pods pro. I asked him. Are you afraid. If people can't get their hands on your products right away. Do they kind of turn to rival products. At that time he was not concerned about dad said simply he makes such a material better product that he's counting on consumers Waiting until they can get their hands. We'll see Josh. Thank you very much running all that through with us. You know when you're thinking about a name like Apple. Josh brings up a good point. If you can't get your pods right away maybe wait this. Is We think a temporary disruption. We don't don't know how long temporary is right. It seems like apple has done a better job of dealing with any disruption when it comes to China trade war and Corona virus. Tim's question they were thinking about rerouting around around the supply chain around China already so I think this is a double whammy for them. Not as they can't do this they can't flip a switch. No could they do it with trade. But I am one of those bulls who thinks that ultimately there's still a demand whether it's demand now whether it's demand a month now from now two months from now three months from now you still have over forty six billion and services revenue. People are still going to want the phone. I'm still staying the name I think other people should do five or six years ago. This is devastating in terms of whether done to the stock in the China News. In fact that apple you know five or six years ago was much more dependent on the phone but the world's changed a lot I passive investing is now the norm. I think money continues to flow in the real concern for me for apple. Here is none of this. It's just valuation and at Twenty one times. Next year's there's numbers I mean. This is historically at the deep end of the pool for them. The market doesn't seem to care whether it's the broader market or apple at some point it does and that would be my concern Karen when you were asking about how much inventory they have. What's the cushion there? What if they closed factories again back to work and say nevermind? Nevermind I feel like it feels early to send the workers back well. It said only ten percent of the company how how much capacity how much production they can do. There are a little lucky on timing this quarter and next quarter or the the lowest earning in quarters of Apple. So that's a little lucky but I gotta say it's one and change percent off. Its all time high as a holder of a little bit nervous about that. I think it's a little bit stretched stretched. The stock has to be clear. There's nothing I mean. Think about the earnings. They had think about the opportunity for this doctor. Run into weakness regardless and I know Carter is going to talk about mega cap APTEX. So that's going to be exciting. Stay tuned for that. Having said all that apple certainly leader of the pack. We've done the numbers. We keep doing this up ninety percent from June and yet Heathrow Corona virus edit it sideways so they had a two week buffer going into the Lunar New Year for suppliers and beyond that is where you start to wonder what it means for demand. I don't know why I demand changes based upon a delay. What I think is important is the conversation that guy brings up around multiple and multiple expansion? I think you're having the same story with regard to Disney. So when you're looking at a company that used to be hardware dependent and now you're having the services arm of it I think I think analysts having a tough time trying to figure out what that new multiple should be and I think that's why it's gone sideways and that's why it's up ten percent your date guy. What do you think about some of the suppliers though so if let's say apple gets gets back online even if it's ten percent whatever else they can't make the phones without all the parts and that's that's been one of the problems but you know some of these names you know you look at the WanNa play the five G. which I think is sort of embedded in this apple story? I mean namely Xilin which has been under pressure considerably. I'd rather try to buy that looking for the rebound in that name. Then try to play some of these other tech stocks that have just been parabolic to the upside for example like Mike runner named or even at Texas Instruments for that matter. And if you look at the semi's overall group that's that's a chart. Actually that looks a little bit more vulnerable. Remember when we were talking trade. We're talking all of the things that really should have derailed semi's last year semi's significantly outperform. So so I do think that that's the case. Where folsom seasonality could be something? That's putting a little bit more fear on the chips and in fact I think the chart looks a little bit different here at least east in the short run I. It's hard to say that anything looks too bad. All things considered. Can you said you were a little nervous about different position. That mean you're sitting. You're not making any move. I'm just sitting at probably look to sell awesome upside calls. But I'm not going to sell it. Because my general view on Corona viruses that most investors will look through and a lot of companies will get a a free pass on a weak first-quarter. Maybe even a week second quarter as I said. Those are the two lowest quarters for apple and really it is. It is the five G. story is key said so we're not going to see that too later in the year anyway so I am hanging. It is a very good point about the free. The Free Pass. Maybe you should talk some other things in there. It's going to be a little harder for us to figure out. Oh speaking of apple the charts could signal a battle brewing in big tech. Jerry Master Carter works at the plasma. He is going to break it down. Takeaway Carter thanks so much so I it it take. The subject here is concentration of capital and the risks or the benefits associated there with the first chart. I'm starting with is simply that the top two stocks and the S. P. Five hundred. We know what they are now. It's apple and Microsoft. They've just now reached ten percent of the weighting of the entire market. The last time we were that high in fact we're higher now nine point nine nine was the actual peak in two thousand and actually Microsoft was one of the two G. at the time G and Microsoft then this time apple and Microsoft but it it gives gives to mind whether we're having any pause or even here we dipped we dipped. We did this time. It's literally straight up. No fear at all complacency and that is an issue now. I wanted to look at Apple. Soft meaning those two stocks versus Amazon. Like this is something I know. What's going on inside the beginning of the year report? That's now six weeks old and we're just sticking with it for clients. The bet is that Amazon is better than applesoft. Now here the lines not manipulated Romania. Where this right off a computer screen and WANNA show it to you? A little further back the two baskets a little further back and what we have is a circumstance where one has broken out and one is just now breaking out so here is apple off squealed. Beautiful Textbook Breakout Out and guess what happens. Look what did fantastic. So why not always the case finds something that's about to do what something else has done. Take a look at Amazulu it. It is sitting right here and guess what starting outperform of course Amazon breaking out. Google up quite nicely as apple is struggling. I think this is the better play. If you're going to be in super super cap names that are dominating the market I love it. Carter come on over here. That was a good line. Guy What do you want he comes on. It's interesting the first thing I know Tim Thought of this. Oh I thought that was Peter Brady Brady and I will tell you I mean wow prevention the brady bunch and then the lights go out go very they should probably my mother did the worst pork chops of all of all time but getting back to Carter happy to hear that whch with that. Said I'm with Carter on this one. It does appear as the Ama- Google mizugushi spring. So you're playing a pair straight. I would be taking profits in the form of the applesauce and looking to get in his book. Of course these each of them if you were to look at him as a basket they're big as a sector. I am Assan and Google and apple sauce or both bigger than utilities. Bigger than energy bigger matures their own entities and they were quite correlated until the huge breakout apple. Microsoft am Amazon's just now breaking out. It's a better bed. Can I call an Amazon Google Google anyway. It's it's a lot for me but but if you think about the rotation look at the Amazon by itself outperforming the triple accused by almost ten percent in the last twelve days. That's massive rotation I think on a relative tip basis. People were very underweight Amazon. Going into those earnings numbers overall something to be concerned about. This reminds me of what we are doing. The conversation we were having much of two thousand fifteen when we saw that the the the market breath and first of all the lack thereof. What was only in these mega cap tech stocks? And because we were seeing some global growth growth concerns we were seeing a lot of concern on earnings overall. In that year you saw Amazon outperforming outperformed the triple cues or the SNP. I should say by about eighty percent google by forty percent. It's the same trait we have going on. And it's a trade. Because Mega Cap Tech is defendable on evaluation in an environment. Where we don't have growth? These are names that I think are going to continue to outperform Karen. What do you think about this Amazon? Google or apple soft well under one Amazon alphabet rather is my biggest position. So I kinda gotta be Damsel Zuko Steph Research. So Google was up. I don't know why it was up today. I didn't really see anything I mean. It's sort of laugh at if you look at the Super Cap. Names has lagged Microsoft and Apple. So I think apple's maybe a little money coming out and some money going into but the really the real big play of course Amazon just having been sideways for almost two years and just breaking out all time highs today what do you think about. Have you factored but in any of the the valuation back. Then does that come into it at all. I know because you're technically based valuations much different. I mean the multiple. The Microsoft is trading at compared to now L. Microsoft's trading at thirty five times trailing right and then it was more like sixty. Ge was incredibly expensive at forty forty five times You know valuations are much. Different rates are much different. So there's no common sense but there is something known as moral hazard and you have a lot of people counting on a handful of names that if it goes wrong the market the chance to stay. There's no amount of money you can take out of Amazon or anything and put it into what footlocker I mean. I can't absorb that kind of money right now and retails down twelve percent here. I mean if you look at the the disparity between the triple coupons in retail about sixteen percent year to date. It's not even close close. This is a fun on Amazon Apple. Solve bathroom flip it around so switching gears. Let's take a look at shares of slack because this is giving back some gains after hours after ending today the biggest biggest gain since going public in June pop during the day came after reports that IBM had moved. Its entire workforce three hundred and fifty thousand employees to the slack platform but in a filing about half an hour ago slack clarify that. IBM has been its biggest customer for several years and then it's not updating its financial initial guidance so now you see shares down about seven percent after hours after reopening so a clarification yes. IBM is an important customer. But it has been an important customer. Yeah you know it's interesting. They put out an eight K which they probably didn't need to do. They don't need to comment on business. Insider story I kind of appreciate appreciate it. They did because it was one that move the market however now does it create the precedence for them that anytime anytime there's a rumor that moves the market. Do they then have to comment on in it or clarify it. I don't know what does it make. There's a conspiracy. Because they know the gentleman to my left probably thinks when that stuff gets out there that maybe all of a sudden you start to see something I don't WanNa you don't make up rumors but MNA is always out there with a name like this and the idea of IBM. It's Duffy. Protest too much type auto. I don't know that's that's what I got from. Maybe A case-by-case basis going forward to slack but good points all around. We'll coming up. We're bringing you not one but two big calls of the day Eh. What's got analyst so pumped up on Invidia and Fedex? We're going to go through it was. He may be one of the biggest bulls on Wall Street. But Tony Dwyer thinks there are some big risks out fair. We'll find out what's keeping him up at night and be sure to watch or listen to us live on go on the CDC APP. We are live from Time Square in New York City which more fast money right after Jeff at IBM problems inspire us to push the world forward. That's why so many people work with us on everything. Everything from city traffic to ocean plastic smart loves problems. Ibm Let's put smart to work visit. IBM DOT COM slash smart to learn more. Welcome back to fast money. We've got some breaking news on. CBS sports latest move. Julia abortion has the details for us. Julia Corny that's right. CBS sports making big move into sports. Betting now it won't accept beds itself rather it's announced as partnering with William Hill. It will be the official sportsbook and wagering data partner across all CBS sports platforms. The Ju- companies plentiful rollout during the fantasy football season. The partnership gives CBS Sports Access S.. Two William Hill's odds experts in it's one hundred and forty sports books. The source tells me that William Hill. We'll be compensating. CBS to get access to its viewership. William Pell benefiting fitting from the ability to promote its wagers of course to all of those. CBS sports viewers now. This is just the latest move and a wave of sports gambling deals. Since the Supreme Prem- court ruled in two thousand eighteen. That states could legalized gambling now. Some twenty states have legalized sports gambling. Since that Supreme Court ruling Courtney Record Radio Julia. Thanks very much for that Grasso. Do Care about this makes sense for you. If you're looking at Viacom you want them to dip their toe into sports funding here. Viacom sure I think is the huge business in in that area and Viacom if you look at the chart is a chart is horrendous. So you have a series of lower lows lower highs. It's down twenty percent roughly year to date. So if you're looking to place a bet on it literally maybe you take a fly around. I mean the price low but for me. The technicals spectacles don't imply that I should be putting real capital to work. We're GONNA move on Yaron. Checkout shares of nvidia surging over four percent today after RBC raised its price target on the semi stock analysts. Mitch Steve's saying the chipmaker will hit three hundred one dollars a share. That's a new street high for that name and it is our call of the day guy. What do you make here? We talked a little bit about earlier. On what about invidious specifically. I don't mind it. I think they're late. I definitely think they're laid. Valuation is always a concern. People will say you know what the growth is there there but now we're GONNA get towards levels we last saw in the fall two thousand eighteen. And if you recall that November they reported a core that was just horrendous and the stock got cut in half not suggesting. That's happening here but I think again. This is sort of towards the tail end of the stock move. Maybe you have another ten to twelve percent upside in the stock to get us back to that level. But I'd be more inclined to take profits here than to buy. The stock is a new long. I I think I with Invidia the fact that they have enormous exposure to gaming and some of these again again leading edge technologies that I think are are competitive but they have at least early mover advantage. I think he got a little itself and I think there was a lot of garbage around all they were doing in Bitcoin. I think that ultimately cost the stock for six months because there was a little too much fluff in the name ended the day the valuation. On this thing it's always been trading somewhere between forty forty and sixty times and you can't really get that upset about it in this market so again at times we've seen invidia be an albatross to own a market that was actually punishing these high. Hi multiple stocks. It will again. But in the market we have real acquitted is running. Wild and mega cap. Tech stocks are outperforming. It's hard to see why video is not going to continue to run is interesting. It's up seventy seventy percent in six months. It's just incredible to think about that. Well in case one wasn't enough for you we've got another call today to for your money. Two for the price of one Fedex also getting a boost after analyst also UBS upgraded it too by saying the bars pretty low for this stock. The move comes after Fedex popped on Friday as laid out plans to increase delivery efficiency and lower costs fedex up over five percent since then. So what do you think of this. One delivery as efficiencies is going to track a lot of people because everyone throughout this name. Everyone was betting against. That's the same so I think the the ability to have lower expectations going forward I would rather fedex ups. If I was forced to choose and I do think the bar is so low and fedex. You could probably just walk over it even though. UPS has been the winner over Fedex. Because the bar is low. It's got more room to run to look I. I like Fedex. I've been I guess early early wrong. Something I mean. I've been kind of in the stock for the last six months. And it's you know largely sideways. If you think about the starts and stops the stock has had the fact that they're using ground finally only. They've been loath to do this. But taking advantage of those ground efficiencies is very good news for stock. If you look at the chart on this thing it's been challenging the two hundred day. This is the third time I kind of like what's happened. Happened with the stock outperformance relative to the relative to ups in the next three to six months is almost a given based upon where these Docs have. Come from. So a lot of bad news in the Doc Fred Smith certainly is back to prove it to them mode and I think he probably will have to make sense for you can well. I was a longtime Fedex holder and actually threw in the towel. Sal and I think that this is the opposite of the INVIDIA call this is so bad. The risk reward is so compelling. Expectations are so low that the risk reward sets up and that that may be true. I feel like with the with the slowdown. I feel like a ups will be able to handle it. Better Fed ex is is having trouble with without any corona voters without any disruption just on their own. So that's why I chose so I'm on the other side of you. UPS over Oh we actually do have some more numbers out of China on the corona virus outbreaks. Let's get over to make Terrell. She has this time. Meg Pay Forty. We're getting numbers out of province. The epicenter of the outbreak of the novel Corona Virus. The case counts are lower than we've seen in previous days a two thousand ninety seven new confirmed cases however the number of confirmed deaths is a higher number than we've seen recently one hundred three that brings the total count of deaths in the novel Corona virus outbreak to more than one thousand total. Now we are are going to get more numbers out of China. This is just for Bay province. Later tonight and public. Health officials are careful to say just from one or two days. They can't tell what the trajectory three actually means and they are saying that right now. They're keeping their eye on pockets of activity in other countries where they're starting to see some limited spread from people who hadn't traveled to China China and that they have a window right now potentially stopping a what they call potential sparks. There cordy back over to you got it. Thank you very much for that. Update we've got a lot more fast money. Coming up appears what else we have coming up later in the show after the break. US stocks seem to be shrugging off corona virus fears but bond investors. Are I seeing a different story. Who's right and what does that mean for your portfolios and later looking for some retail therapy? How about a couple of big shopping shopping deals that could change the landscape for the sector? We've got those stories in a whole lot more. When fast money continues welcome back to fast money stocks rallying again today with the S. and P. Five hundred and the Nasdaq closing at record highs as investors shrugged off Corona Rona virus fears but the bond market could be telling the real truth about the market sentiment? And it's all that pretty Steve Liens back at headquarters with those details. Steve Concerned about the corona virus weighing heavily on the outlook for first quarter growth. Some forecasts are suggesting the equity market is not taking the threat seriously as the bond on market a CNBC survey over the weekend of eleven forecasters FIS first quarter. GDP estimates averaging just one point two percent and that's down nearly a point from the fourth quarter and with a modest bounced back expected to two percent in the second quarter the downgrades mostly because of the corona virus and the shutdown of production. Shen of the Boeing seven thirty-seven Max bond seemed far more concerned about all this than stocks. The ten year yield is off almost forty basis points since the beginning of the year. The S&P five hundred though remains up almost one hundred points J. P. Morgan writes in a piece rate. Markets are sending warning signs creating renewed disconnect between rate and equity woody markets. What we find complacent is the idea? Among some market participants that Chinese economic weakness whatever limited repercussions for the rest of the world. Equities might be sustaining their levels because of belief. The Fed will step in later this year. A rate cut is built in the markets by the summer. We'll hopefully learn how realistic that is. Testimony this week. The Fed Chairman Jay Powell back to you guys. Thanks very much Steve. Just one point two percent well. Despite today's highs our next guest says the markets in a waiting game was Brian in Canaccord. genuity is Tony Dwyer Hell tell us what's got him worried right now. So Tony Are you worried about the signals from the bond market. Yes okay I'm worried. What about the fact that I have no idea what to do tactically right here? It's one of those rare times where we can come on and be confident. I'm not confident and really in either direction. What's interesting me is when you think about the markets telling you something because it's at a new high? I looked today because I felt so stupid for downgraded to January twentieth two neutral. I did it on the show the ex the socks the emerging index basically. Everything is down from that point outside of big cat tack so with Technology Being Twenty five percent of the SNP waiting. I'm okay to bring it down if you're over exposed was to that to a neutral territory so I think we just sit and and kind of feel out when the rest of the market starts to lift up like attack has been see. You're worried about everything. But what tech. No no other way around. I think everything else is correct. Everything is directing okay just like the bond market is telling you what the bonds at a at a one fifty eighty five. It's commodities relative performance is horrible small-cap relative. Performance is horrible. The the bond market is telling you the Treasury Market Orcas telling you that the reflation traitor the cyclical trade has gotten pushed out a little bit. But I want to be super careful. I've said this every show the last thing you WanNa WanNa do is be negative when you got an easy fed corporate credit the movies. Bwi Index is at a record low yield so the lowest level of investment grade is is raising as much money as they want at a record low cost. But that's extraordinary. I'm sorry I'm confused I I I agree with what you're saying And those reflation trades have been in been death but are you saying that they're interesting now that they've pulled back because that was kind of getting more interesting. Yeah they're getting more interesting as you work off some that overbought condition that that set there and has it's the market's discounting a lack of growth. I'm sorry to cut you off ten. No no I mean because because again it goes back to my my analogy too late twenty fifteen if you think about what was really underperforming everything. That's been underperforming. So far this year throwing industrials throwing you know throwing throwing steel companies throwing Brazil WMD. Yeah of these places that are the other parts of the world is it. Is there anything fundamental behind that I think it is this expectation that you're in this global slowdown and you don't know where the end of it's going to be. I even what I did too is. I want to make sure that it's not that the S. and P. is just up so much because the big cat tech that everything is under performing because of the great what Carter Carter did whatever the heck. He called a zoo. Go right and write. Whatever he called them they're ripping right so equal weight? I use the equal weight compete against those other areas and they're still underperforming so it's not even just the two biggest names that are making it happen. Everything else is under performing which is telling telling me that we're just kind of in this digestion mode. How confident are you in a convergence of the out of favor with the in favor versus is the out of favour just continuing on the path of is leaving? The I mean the in favor continuing out of favorite leaving the death. We're all too familiar with algorithms in quiet trading and all the fun stuff that works off a momentum and you're going to have to shift that to turn it you're GonNa like you've got earnings momentum. You've got upside surprises sizes and you've got price momentum in these big cap stocks. The quotes are all over that. That's what makes these things Ron and until you reverse that it won't change and I think that I don't. I'm not a buyer of value versus growth anymore Karen because I think there's so much passive investing that value stocks have become Events stocks like they could have great fundamentals but the only thing that's going to get them to rip is to be a money manager like you that can sit with them for six to twelve to twenty four months and and wait for it to finally have that catalyst that makes it rip. Look at Amazon Amazon. Sat there for a while waiting for the quarter. It got the event and now it's ripping so I think it's more catalyst base than style based Tony. Thanks so much for being here with us today. Being honest about higher feeling or not. Sure how you're feeling about what's going on right now 'til thanks Jordan Jordan. Thanks for being here well tonight seven. PM Eastern time. Make sure to catch her CNBC special report outbreak corona virus. Where we will give you the latest developments on the virus again tonight seven? PM Eastern time. We'll coming up. We may still be a couple of months away from spring training but it's ready for baseball season with his fast pitch we'll find find out what the other traders think and if his idea is a home run and later. We're counting down to earnings from Hilton. Toe Options traders are trying to protect themselves from Corona virus related risks. You're right back. Welcome back fast money for fast pitch and this one's coming all the way away from Minnesota Jerry joins us from Minneapolis. The one name he says is a total home run. What do you got beat well? Coordinated Got United Technologies Allergies. And it's a it's an interesting because the fact that this is a stock that just literally came off of its fifty two week highs. Now Greg Hayes I love the CEO. And I always start with the the management because I think that's the most important thing Greg as came in. And he said you know what we are going to be bold. And we're going to be big and we're GONNA make acquisitions. They did exactly that they also have sold off off some pieces Sikorsky gone but the huge acquisition of Rockwell Collins that was massive and then all of a sudden they next the next thing they do. is they go with Raytheon. To to create the biggest. Behemoth outside of Boeing in the industry. So I love how aggressive this gentleman is. He's essentially Ben with United Technologies since he started off in the business. Business World after he got out of Purdue University. This is a guy who started off. They've been bought. They've been bought. They eventually got bought by United Technologies. He's been there ever since he's done an unbelievable job. Bob In my opinion is the CEO and he's been very very aggressive. So that's something I think is very important in a in the markets that we're in and he has an exact idea of where this company there's going now the next check I'd like to put out. There is on the fundamental side when you look at this company it's trading at about seventeen eighteen times its earnings but if you look at the forward forward it's even less as a matter of fact when you look at about a nearly a two percent dividend yield as well and free cash flow. This is a company especially with the Raytheon deal by twenty twenty twenty one. They expect to have a free castle of somewhere before about eight to almost nine billion dollars so fundamentally I like it I love the management and then lastly I'd I'd like to look at what their growth is well. The grew last quarter with their earnings per share. That's up about eight and a half percent you look at the revenues. That's about eight and a half percent. This is a company that they they really are dead focused on the aerospace world. Now they're going to be bringing in defense so that combination. I think is going to be something. That's going to be able to grow together and they'll get rid of a few more companies in the world. That's going to give them a little bit more money. A Little Bit's GonNa come off of what's right now fairly decent sized debt that they've put themselves in but the cash flows are incredible. So for those reasons. I think this is a stock that right now at a trading call at about sixteen times is way too cheap and I think there's plenty of upside from here so pete. How much of this is really about around those strategic a strategic initiatives that they're making where they're acquirer ear than they spin something off and they're really just creating some free cash flow for themselves? Is it more about that because this chart looks amazing to me but how much of that is. Just the strategic initiatives that. You're seeing Ozzy. Well I think it's a combination Stephen You you know as well as I do we just heard from trump trump. Where's the spending and it'd be going right defense so they are positioning themselves? I think to be in a perfect spot right now and I think when you look at what Greg Hayes this is done yes very strategic. They are trying to become a company a little bit different than what they were getting rid of a few things. Otis elevators all the rest of that and to push themselves right into where the money's being spent and where I think by the way they're even growing their margins right now steve so the combination of all the different areas of growth. They've got I think this is a company that very easily could go up another I. I'm not saying it's GonNa go to two hundred seventy five one. Eighty is not out of the picture very interesting line. We don't have time for any more questions. But y'all have to vote so think we're starting Tim with you buying this fast pitcher not first of all great replan. Ball's actually at one day. A six hours till pitchers and catchers buying pete buying a piece of the cost savings Ashley is about the margin increasing. They could save six hundred million dollars. That's a mets logo. Guy Case in New York metropolitan the mets got it. Yeah buyers well. This is by before the Otis Elevator. Lean by the art anyway buyer. I like it very creative. Grasso say that was one of the best remote pitches. I've seen Meyer. UTSA yeah and I'll round out. I say Mo- is your friend court so you got four four four four. Never hear that everybody. Nobody from here was always pitch all right. Awesome good four four. Thank you so much pete we were you just heard from now it is your turn vote and our twitter poll. CNBC fast money. Tell us if you love pizza. Pitch on United Technologies and still so head to big retail deals shaking up the space today. We'll break down what they mean for the group plus travel stock tip by the Koran virus outbreak as Hilton gears up for its earnings report. Tomorrow we'll tell you what to expect more money coming up right after this back to fast money too big headlines hitting our retail radar. Let's kick it off with brands getting a little bit of a boost today after a CNBC DOT COM reported that the retailer is getting close to selling its embattled. Victoria's secret franchise to private equity firm Sycamore partners. Here's Avella brands up. Nearly thirty three percent this year but still down more than seventy six percent from their all time highs. So could this potential chill deal be enough to turn things around for the Stock Karen if they sell off Victoria secret though they've got bath and body works just had a nice trajectory but that's kind of what they have left. That's what they have left. I mean the problem is relieving these mall based stores right and and traffic and I don't know I have been I've sort of missed this evolution solution of the business which I don't regret really And I wouldn't be inclined to jump in here actually. Yeah I think this is a really tricky one and I often wonder what happens if Victoria's the secret because we talk a lot about how they have obviously honed this very sexy image which is not really in vogue right now but if you change your brand's DNA than what is Victoria secret. That's my sort of worry with. We're we're GONNA do with it. Yeah and and L. Brands one of those great examples of things have time to make the most money when things go from. Just awful or terrible to just kinda bad and that's really what's happened here so you started wanted to get you've got a couple of rounds of earnings numbers and the stocks move from eighteen up to twenty seven it's now it'll level Where I actually think there's there's really needs to be a fundamental turn and I don't think you're going to see that yes you can measure the sum of the parts but I don't think there's much to do with the stock after this move and and you know I could be wrong on this But we've seen these moments in the last two years l.. Brands had an opportunity opportunity to turn that part of their business around. And I don't think it's going to happen. I always think that you see in technicals. It's always in the chart so all the fundamentals. It's always that that bet who has rights the fundamental player fundamentalist or is that the technician and usually in the chart. Everything's in there and timid just mentioned since November. The stock's up sixty percent. It's bouncing around. Overbought in relative strength index could go higher. Of course these things can blow up but to enter enter it now of sixty percent. I think you have to know the story really well. So if you're one of those people that you could dip into it now not one of those people who knows the story well enough to buy it up. Sixty story stories changed a lot over the years when it was limited and they owned lots of different companies that are now its own publicly traded. But that's too much again to right now so ellen is not the only retail name. That's making deal news today. Owner Simon Property Group talking about malls announcing more than three and a half billion dollar acquisition of rival Taubman centers. The deal comes as a broader slowdown in brick and mortar. Shopping has really forced just retailers to consolidate and seek alternate ways to attract consumers shares todman surging double digits today so this be a sign of more. RETAIL EMANATE ADT COM guy. What do you think about this one? I mean is this just to players that are in a sector. There's going through a Lotta changes to their stronger together than they would be apart. We'll be my sense. I mean Karen could probably speak more in tells tells the night but I think that's exactly what's going on and sometimes too bad things doesn't mean it's going to own them make a good thing so maybe they're synergies here. Maybe not I think you take profits in both if you were lucky enough to be in on this move everybody making this well. These are the cream of the crop right. When you think of Simon Property Group and Taliban I mean I think town would be necessarily sellers and if you look at how would a giant premium they had to pay to get it? Simon was even up on that news. So I I think there is something for them to do to get. Simon is not expensive here even with this acquisition. I think you're looking at the best of the best. There are malls that will survive as opposed to of some of the other lesser malls. Something like a W. G. or other ones that we've seen just whittling away so I mean this is the cream of the crop in the space. Simon is making some interesting deals. Whether it's buying a retailer at a bankruptcy like forever twenty one partners or this one today like you said not necessarily expected. We've got a news alert on Uber and post meets fight against California's need Gig. Work has that story for Sasha's going on here quarter. We do have news on Uber and posts mates report suggesting now that a federal role at judge has denied their request to temporarily halt enforcement of Ab five new Gig work law which would require most companies to Reclassify contract workers employees. Judge rather here the balance of equities and the public interest ways in favor of permitting the state to enforce this legislation. Tim We did reach out to post mates they're telling CNBC that this is a procedural decision on the preliminary injunction and they look forward to continuing to present their full case on the marriage. We also reached out to Uber will bring you that response if and when we get back to you. Thank you Josh. I have a feeling this one is not over as they say they will challenge. We'll coming up. That's mad money. Jim Jim Cramer. He's going to be sitting down with take two. CEO Strauss Zellner gets that exclusive interview tonight six PM Eastern time and right after mad money. We'll have the the latest on the corona virus outbreak in our CNBC special report. That's tonight at seven P M eastern time. Welcome back fast money a big week for the travel stocks Hilton kicking off earnings in the space tomorrow morning and vegetables we paying close attention to any comments women's on the corona virus of course so for more what to expect we're going to get over to Seema mody. She's back at Headquarters High Sima. Hi Courtney. That's right with China and locked down. Investors have become increasingly only concerned about the impact of the current virus on the travel industry in fact lodging data from SDR already shows hotel. Occupancy declined seventy five percent in mainland China China from the fourteen th to the twenty sixth of January key question now is how Hilton's properties have been impacted. It has four hotels in total two hundred and twenty in China I know with more hotels in its pipeline and it's China business was likely impacted by the travel. Restrictions analysts point out that asia-pacific makes up a smaller percentage of Hilton's total sales sales compared to the US where Hilton derives over fifty percent of its revenue. That's why the focus on tomorrow's earnings call will likely be on bookings occupancy levels here in the US and if there are any preliminary signs of the consumer pulling back on travel and vacations due to fear of infection. According we have Hilton's report tomorrow and then we'll hear from tripadvisor is on Wednesday and expedient on Thursday so a big week for travel. Thank you very much seema. Let's read this one. I have to say I'm I'm I was pretty shocked alive. These hotels stocks so laugh more than they have really on the krona virus fears but it just seems point is look. US is the big focus at least for for Marriott and Hilton. Only thirteen percent of their rooms are from that area. So they're going to be focusing. See this is where we said before. Are they gonNA kitchen sink it or throw it out or they're going to get a pass on it. This is where the hotels can actually try to get a pass. But they're not really dependent on that area so you could see him be and then guide aggressively high or not yet. Aggressive with higher people can say all right so corona virus. It's not really the case so we had your homework and make sure we really understand where that read news coming from well. One trader is betting that there could being trouble in Paradise Wind Hilton reports tomorrow. So let's get into the options action. Like oh he's out in San Francisco. Hi Mike they're so yeah. We did see above average about a two times the average daily options volume in Hilton. which is going to be reporting tomorrow and right now? The options market is implying a larger than average move. We take a look at it. It's well all over five percent which is considerably higher than about the four and a half percent that it's averaged over the last eight quarters. The most active options were the February one. Oh five puts. It's and you might think that that's very bearish but actually the trade. I was taking a look at that. We saw today was a purchase of the one ton one oh five one by to put spreads. So what's going on here. You're the buyer is buying the one ten puts and then selling to the one. Oh five foot. Is this Barish. But it is. But it's only modestly so and the reason is this makes the most money of Hilton drops down to about one zero five which would represent about a five percent decline or so from where the stock closed the day. And by doing this trait. You're actually taking on a willingness to purchase the stock look at that lower strike price and effectively buying it at about one hundred dollars a share. which would be a decline of about ten percent so it is barish but it is only modestly so so they're expecting getting after such a huge increase in the share price that maybe the stock could give back a little bit but not expecting basically all of that to come out we will see what happens? My Co thank you for joining us and for more options action. Make sure to tune into the full show this Friday. That's at five thirty PM EASTERN UP NEXT. We've got your final trades. Welcome back their money. It's time to find out if you home. But Pete's fast pitch on United Technologies. Pete looks like you made a convincing argument. Twitter's fine your pitch any final comments. No I really appreciate that I want you guys have a great night and I would. I guess a little too high on the time remaining in the show Thank you for being here with us. Beat it is time for the final trade. We're going to go around the Horn ten. You're up in the topic of Mega Cap Tech companies. I think until certainly belongs there. They also are one of the mega cap. Text came out of the earning season with some upgrades on the base on the basis of the fact that they've gotten a lot of their house in order I N T see all right Karen. Yeah I like Pizza Pitch Technologies. I like you know he made all the points for us. Gary Gilmore to ut axe CER AVIS budget. Still Long this name. It's up sixty percent about six days. I'm staying long Courtney. We Love Avenue Avenue here. CMG continues to break out to the upside. CMG making me hungry. Thank you all for being with us and for watching fast money mad money which Kramer the third right now at. IBM problems inspire us to push the world forward. That's why so many people work with us on everything from city traffic to ocean plastic. SMART LOVES PROBLEMS IBM. Let's put smart to work visit I._B._M.. Dot Com slash smart to learn more.

apple Karen Josh Tim analyst Ibm CNBC China Courtney Reagan Amazon Josh Hilton Fedex WanNa Tony Dwyer CBS Mitch Steve Microsoft Google San Francisco Jerry Master Carter
Fast Money 09/20/18

CNBC's Fast Money

44:22 min | 2 years ago

Fast Money 09/20/18

"The past money podcast sponsored by TransAmerica as a financial professional. Are you looking for ways to build trust with your clients? Why not begin by asking the right questions. Talking about health today can better protect wealth tomorrow, learn more at TransAmerica dot com. Forward slash security. To hear the music and you see the Rachel ball, and you know what that means the Dow hitting a record high for the first time since January twenty six joining the s. and p. five hundred NASDAQ which are both at all time highs as well. And you might be getting tired of winning this record close of the Dow making it the one hundredth since President Trump was elected almost two years ago. So with the rally in full gear and stocks at record highs, where is the best place to put fresh money to work right now? Pete, based upon what we're seeing right now happening in the ten year in this study move to the upside. I actually still think that the financials is just the beginning. I think this is finally the time for the financials towards the second part of the second half of the year. I think the financials actually look very good. When you look at the balance sheets, when you look at the economy, you look at the strength if they can actually get some of the loan gross starting to kick in as well. I think this is the place to be now. I'm overly exposed to the banks and I think there are some that are overly inexpensive versus some of those that are overpriced right now. But overall, I think there are many opportunities in the big fight. You say you're over exposed to the banks. Why am I? Because I honestly think that that is the place the next rotation. I mean, what we're seeing right now is this the part of the beauty of this market has been the strengthen the rotation. We've gotten about out of the FANG. He suddenly moved to the industrials. And now you've moved to some of the transportation's, the rails and the rest of that. And now I think that the financials now their time has come to start moving to the. I mean, it was just yesterday we were saying, oh, was this just part of a rotational move right out of today? We saw everything rally. We had multiple sectors up by more than one percent apiece. Well, one of our costs daycare and brought up the dollar. I totally agree. In fact, the Dow was down almost seventy basis points. So what do you invest in now, if you think about the rest of the world where arguably, we've continued to get weaker data points and yet the underperformance has been more extreme than even the data should have supported. If you're in a place where the dollar's weakening and it doesn't make sense considering that yields are actually near highs. You'd expect that this would be a sign that the us economy is growing in that the dollar differential should be helping point being that dollar weakness broke through the hundred today you by Europe, you buy emerging markets and you. Why those places that were most hurt by stronger dollar? What do you think of the markets here? Well, I agree with everything that Pete said for me, I'm overweight financials as well. We shan't Greece with nothing I said by the way. Good scam. There was a lot about the dollar, so that's I think they should have been here before this rally. Right. I was very frustrated to be owning them and just having a lag and lag. Even though I think the story was really compelling. It's gotten more compelling as we've seen rates move. They move pretty quickly and pretty just sliced through like butter right through that three year Mark. And that's interesting to me that there hasn't been more of any kind of response to that. That's interesting. But I liked the banks. I still think they're cheap relatives. The rest of the market. All these peat said Connie's growing balance sheets have never been this good. So we'll see. Big buybacks dividends not the that drives anything, but it's Dan hates the banks. Zoe, really, he likes, I would just push back and just say, you know, you're talking about this economic sensitive group that should be very exposed to, you know, a better US economy, but we're also in the tenure of an expansion. We're gonna tightening cycle now we know that we've hit peak autos. We know that housing data is soft. We know that financial conditions are getting tighter. So you tell me how loan growth is what you just mentioned beyond you're happy that you're seeing that the, you know, the ten year above three percent. We're also seeing the narrowest spread between the twos and the ten since before the financial crisis. So to me, I think you're getting this kind of dead cat bounce in some of these banks that haven't participated. I know that you've been calling and you've been calling for new highs and JP Morgan. You've got him congratulate. He's. I mean, you know. We're still seeing your lady. What I'm saying is is that this might mean nothing more than a little bit of a bounce off of short-term. What we're seeing right now, I'm just telling you that I'd be very shocked to see. You know, some of these investment banks make move back to the Heiser still down more than ten percents. Goldman, this Morgan sitting is perform not investment banking business. That's what drives like JP so shows the two banks that are up on the year JP Morgan and Bank of America to massive money center banks that should benefit greatly, but but the rest of the complex are not doing particularly well. Look at wellsfargo today. The min announced they're gonna cut ten percent of the workforce over the next few years. These are not particularly healthy institutions despite the fact that they're cheap and their balance sheets are much less levered than they were. Let's say, ten fifteen dollars between CitiBank of America j. p. Morgan, all of those. I still think have plenty of outside, right? I think they're all still extremely cheap, especially city and Bank of America, and they've got exposure in different areas. But how about something like an Ameriprise? How about something like an e trader Schwab or any of those types of names where they've gotten credible amounts of capital. Dan, isn't that something that I'm not just saying Goldman Sachs, Morgan Stanley. I'm saying the banking industry itself has room to the upside. All right. Well, let's sectors that also benefit from an economy that's growing industrials. For instance, materials. I mean, Tim, where do you where she, where can we buy at this point at the markets have record again, if you look at materials and you look at the places where the trade war is something that at least is held in question, what truly the outlook of these companies are going to be even though steel utilization is at all time highs. Still prices are at all time highs utilizations not at all time highs, but it's close. I think the materials trade is very interesting. What what I am concerned about. First of all is what we talk about at least regularly here. I'm not really sure that this is your father's trade War. I think we have a dynamic here with China that is really more based upon control the internet control technology in the twenty first century. That's not going to end overnight. I think the pressure on these companies continues to be very sporadic. But when I look at the industrials, I would go to the autos and just say, what's nice here? Is it actually we no longer talk. About peak auto anymore. I think that we should be looking at with GM is that this company continues to earn six to set almost seven bucks a share at a time when I think their businesses never been run better. And I think it's a company that's also position for the story and robo cars, robot taxi. So that's a name I like to name. It's really lagged this market, and it's a name. I think you should. How about something like Caterpillar. Now I pitched this awhile in forty. They've got an upgrade today and you go over the last three years. There were already three dollars a share back in fifteen sixteen seventeen eighteen that numbers now closer to ten or maybe potentially eleven dollars this year. So why is that? Because they have so much strength right now and they've got all the capital. They've got an incredible cash flows. And when you look at their how they're made up right now, fifty percent of its coming from the US. They're really focused on construction here, but you've got the international component as well. So you've got a little bit of both. We've got Tim's world in the international because you were just talking about some of that and you've got the US exposure. So that's a name where I don't. When you look at where it's trading. Evaluation perspective. This is a name that has plenty of upside. It's definitely value wise. It's well under the s. and p. five hundred which trades at what seventeen eighteen against seventy, something like that. And we're looking at name that's trading at eleven or twelve. I mean, this is this is a stock that I think today's than upgrade today. I think they gave it up one seventy target. I think that's actually reasonable. I think that's something that they could hit in the next year. Yeah, and it wasn't just Caterpillar. They also upgraded Manitoba. The day is not worked at all you are I working. They didn't accusation. I mean, they feel pretty good about their business to be doing acquisitions. I am a little bit concerned though. I think any hope ever we we ever had infrastructure Bill is really completely gone for a while. That would have been nice. I'd like to see a little more strength in housing, but they're not expensive, really not expensive. So I would actually push back and say, infrastructure, let's say the Dem's do take the house. This is an area where in two thousand nineteen, I think you could see some compromise. This is tough. That Democrats usually like to do not Republicans. So that would be the sort of thing where if ultimately the president does lose the house, right? They're going to have to compromise to get anything legislatively done going forward. And that was one area that I think would do very well. I'll just make one point. I, I don't like any of the value names, especially as we get to a point where we're finally back to new highs from late January and the Dow the s&p made one a few weeks ago. I think he'd go with kind of what got you here you go with beta, you go with momentum, go with growth because right now the value they have so far to go to even get back to a kind of decent level. And I would just make one point about. This is on the charts. I mean, what's the point here? Because we're just not we're ten years into this recovery and I just don't think value you're going to see if the, if the SNP in the Dow we're going to blow off. Okay. I just don't think it's going to be values going to be the next leg of it. And then obviously the putting a button on the dollar thing if EM debt and equity is have been kind of wait on pretty heavily about the rally in the dollar from April EM was at fifty two, six months ago went down to forty. Now it's at forty three. That's where you get your beta right there. Well, when Satcher or selling off earlier this year or next guest consistently said to by the DEP, here's one of his more recent calls in in July. So we are making a new high on profit margins. We're not peaking profit margins. We have a lot of duration here, and that's why I'm a raging bull and I would buy weakness. We hope you listen to Tony's advice because since that call in July, the Dow has rallied more than six percent. There is now Tony Dwyer, Canaccord Genuity chief market strategist. He's back, sees more upside ahead. So Tony, how do you say so bullish here? Well, mill, our core thesis that keeps us buying the dips for the better part of nine years is that the market correlates with the direction of earnings. The direction of earnings is driven by economic activity and in many ways, the economic activity in the US is driven by small business. It's what we have here is the NFL the national federation of independent businesses they do what's the broadest poll of small business optimism. And what we have is we have a, we had a new high for this cycle right here. Right now we had a high here. We had a high here. We had a high here and again, we had a high here. The reason I put all those on there from the point that you made a cycle peak in the NFL be the s. and p. five hundred went up an additional thirty, three percent to its peak and you did not have a recession for. Median forty one months. So I know Dan and some other people are worried about the duration of the cycle. It's not the duration guys. It's about the availability of credit economic activity that leads to prophets in the market correlates with the direction of those profits. I think Tony comes on over. You think he does you getting Dan's grill? They've got to staff. They've got a staff scored a setup last. You guys later, he's outlets. The way since when was that of that saw that as a compliment been consistently bullish for very long time, Tony, almost annoying. So it's been sort of a difficult at times like in July. But you know, as time goes on in up until now, has the sectors that you've been bullish on changed? What are they now in? Have they changed during the course of this run? They have and basically what may be one of the worst fast money call since you give me credit for being right? Let's give it a little bit for being wrong. When I said by bags that has obviously not worked is Karen identified earlier. However, I think that is we're involved in what we call the productivity trade capital spending was up over twenty five percent of over twenty percent in the first quarter and the second quarter, it's likely going to be pretty close to that for the s&p five hundred in the third quarter, etc. What that means. How do you fund capital spending? Well, banks and financial institutions, and it is capital markets. I'm not scared of the capital markets. Companies here financials, funded industrials implemented and technology is the brains behind him. So those are the three areas that we've been focused on. I haven't worked all perfectly, but I think we've stayed with. Them, and I think it's going to work pretty well here. So just stick with the I mean have, but save versus eight months ago were the day the same sectors that you like four different. Okay. So. Longer in older that the character of the rally doesn't change too much. Now typically dead and Dan was right about that. You don't typically have sectors lead you and then stop have new sectors take over. The one thing I would say is that you do get. You've had this kind of rotation with Sammy's if done poorly and just gone flat. When other areas like software and services in tech have ripped kudos to you, you've been right. Even when it looked like it was, you know, unusual call. So in your model, how do you think about where rates are? Does move in rates start to bother you at some point? And if so, where? Well, when we did the by the banks piece currency, great point while you typically get when you flattening yield curve to the current degree as you get right before verts and we're pretty close at twenty five basis points today, you get this bounce up in the ten year. Note yield that causes the curve to kind of steep real quick. And that's when the banks rip they have this. And I wish I saw earlier because I wouldn't have done this spot at that time, but that's what I think rates are probably. Just going to be plus or minus three percent. It shouldn't be that much if the fed because the economy is so good is and people, I think really make a mistake in this when the fed is raising rates more aggressively because the economy's good, the long end should actually trade down in yield because isn't that a disinflationary move. If you're tightening fed policy to intentionally slow the economy over a ten year period, that's disinflationary. That's what ends up in, but it stays flat. How are they tightening? You know, we're, we're right now. We know that we're going to get a rate hike next week, but there's debate about December. There's debate about whether there was going to be three in two thousand and nineteen. So my question is, is that we have a fed that really wants to speak very dovish -ly, right? And they want to act when it's okay for them to tighten to normalize, but they seem very scared about it. And that leads me to believe that the economy is on much weaker footing that the s. and p. five hundred at twenty nine and change is telling us. Well, as you guys know, I've said many times on the show. This is going to end badly. This is going to end badly because you cannot fix debt with experts. Actually more debt. There was always a catalyst to make that happen. This is not rocket science. This is not magic. Recessions. Just don't show up guys like me, say you get an inversion of the yield curve that causes banks and other financial institutions to stop lending. Credit stress increases. Small business optimism starts to tank. Consumer confidence starts coming in, and manufacturing activity slows every cycle we keep trying to make different. Dan, it's not different. You cannot fix debt with more debt. It's not about the rates. It's about the ability of people to borrow from institutions, Tony, got to leave it there. Thank you could right. Canaccord Genuity. So I'm somewhere in between Dan and Tony. I mean, I think the point on debt is a very important. One global debt to GDP is north of three hundred percent. We're, we're, we're actually in some sense higher than we were pre crisis. Certain you can look at corporates and say that outside of a select few triple as you're actually in a place where we aren't a place. I think the fed should be cautious though. Dan, I think the reality is they are going to move cautiously and for equities. That's not a bad thing. My view is that look, we're gonna front-load some growth into the next month or two. And then I think it's very difficult sledding from they're coming up tech shares of Micron turning lower moments ago. We'll tell you what the company just sat on the conference call that sent share, sinking down two percent plus doubt that's down. It's halted its soaring. Now it's sinking talk about national sensation till Ray, but those while could be highlighting a key trend in the industry. We've got all the details later, Nike hitting an all time high despite all the cabinet drama, it is the best performing stock this year. We'll tell you what's got investors just buying the name. We're live from Times Square in New York. City much more right after this. Welcome back to pass money, shares of Nike hitting another all-time highs today. This is the company held its annual shareholders meeting. Sarah is has got all the details when the NYSE, hey, Sarah, hey, Melissa, it's been a winner all year long. So earlier today, Nike chairman and CEO Mark Parker address shareholders at the annual meeting, Parker touted Nike strong results, and the shareholder value that's been created. He wants though asked about some of the workplace issues made his most extensive public comments yet about the internal corporate culture scandal that remember led to the departure of eleven key executives in the past year, including the number two at the company and widely believed successor to Mr.. Parker Parker responded saying he's grateful for the employees that spoke up. He says the most important job is making Nike the kind of place. We all want it to be saying the company is committed to creating an environment of inclusivity diversity and empowerment. He added that they're lamenting new employee training and leadership development program. Rams as they learn from the mistake. He was also asked about the controversial Colin Kaepernick ABC campaign by shareholder Parker defended it, calling it an inspirational campaign and said that he was incredibly proud of it. Now, according to the latest data from Edison trends, sales did jump online twenty-seven percent. After that campaign was released during the Labor Day weekend, but have since leveled out around the growth rate that they were before the campaign. Investors have learned visually shrugged off both the internal changes and the noise around this campaign as the company has repeatedly put out strong results globally and has even proven that it made good on its promise to turn around the key market of North America shares of Nike up more than thirty six percent so far this year best performer in the Dow shareholders also rejected a proposal that would have required Nike to disclose more information about the company's political donations. That was the six time that was voted on, remained opposed by the. Board on Tuesday. The company does report earnings. So Melissa, we will see how much of a direct impact all of this had on the bottom line. They clearly couldn't talk about the results as they were in quite period ahead of that on Tuesday. You know, it's just interesting Sarah in so many different research operations companies out there releasing these sorts of data points about sales, but none of that has been confirmed by Nike, and do we have any sort of ideas to whether or not they've been accurate in the past, not sure about that, but you're right. It hasn't just been sort of online high frequency data at us in trends, which I mentioned Canaccord just recently put out their own internal survey. We don't know exactly the accuracy, but I think it captures a similar theme and that is that when it comes to the message that this was supposed to resonate for the audience. This was supposed to resonate for younger consumers, buyers of Nike products. Remember they've got a huge constituency below age of forty five that didn't make an impact. Or it didn't at least have a negative impact that a lot of the protests the boycott Nikes that was maybe from an older crowd, a lot of social media noise, but you're right, we're not gonna see until they release results, and even then that'll be early to see the results, but I'm sure that executives it'll be asked about it on the conference call. All right, Sarah. Thank you, sir. Is joining us from the NYSE. Well, Sarah mentioned Nike is also the best performing Dow stock year to date crushing its competition in the athlete where space. So well, nikea sword, though locker, under armor. Sketchers, they've all plunged ten percent or more in the last three months. So do you just keep buying Nike Nike? To me, it's an long they've been on as much of a terror in this last period. They're up sixty eight percent in the last nine months is they've been in the last decade. So for all those people that were counting these guys out North America cue for yet an inflection point, China for all the concerns around trade war, China's contributing twenty five percent of revenue growth about eighteen percent of EBA dog growth. And I still think it's very well position terms of women's growth. So I love the story not. Cheap. And I think at this point it's getting near that place where. I don't necessarily sell my position. I would not be saying, hey, I think there's great value here. Not long ago. I sold it and for that reason because it's not getting cheap, you know a couple of dollars ago, but I gotta tell you what the cabernet thing. We talked about it that night on this air. We talked about the idea that it was a risk and it was a risk that they wanted to take and it's not the first risk. Nice, Nike, the capper Nic ad, or did that make it before the capital. You know, I don't think that was the reason this early buy or sell, but I think they're still competitions going to be here with the details. But if I'm going to be in the leisure space in the one name that was not their Lulu, I continue to own Lulu. I see the growth in men's which is outrageous ecommerce was you rock and some Luhan agenda a little bit shut. I gotta tell you something. I love. I love the product, but I love what they're doing in the growth that they've got. Yeah, Karen, you were still in foot luck. I'm in footlocker, disappointing earnings. I mean, I think the stock is really, really cheap. Obviously they are. They're not a brand distribution and so that that weighs on the multiple by lot. But to me, it seems excessive here and it does correlate with Nike, even though in the very near-term it has. I would just say that. So they had this meeting today. There's obviously been a lot of talk about Nike. The stocks made new highs is up twenty percent since they reported last quarter. So these guys talking about growth, they're expected to grow earnings, mid teens, sales, high single digits. Everything you're paying thirty times is getting a little expensive at one. Point though, since they guide in June, we were just talking about the dollar sixty percent of their sales come from overseas, Tim just said twenty five percent of their sales growth comes from China's. So a week dollar kind of gives them a little bit of a tailwind at least as far as forward guidance. But I think if you could get this thing back towards the low eighties and set up for a move back to one hundred towards end of the year, that's the way to do it for more Nike head over to CNBC dot com to read all about. It's brand building record Ryan. I'm Melissa Leo, you're watching fast one ANSI NBC person, business worldwide. In the meantime, here's what else is coming on fast. Tone ratios are going in reverse today, and the move could highlight a key difference between it and other pot stocks. We'll tell you what that is. Plus Karen is bringing the heat pitching one industrials stock that is set up the rally but is about to come to life the name when fast money return. Welcome back to fast money. We've gone earnings alert on chipmaker Micron, the stock turning lower and sinking the after hours session. Let's get to John Ford back headquarters with more on what took the stock down. John Melissa two things. Mainly one is a week guide. The street was hoping for revenue guide of eight point, four, five billion dollars consensus in Micron. Guided to a range of seven point nine two, eight point three. So the top end of the range below where consensus was also the street was looking for three dollars, four cents, roughly EPS. They got it to two dollars and ninety five cents plus or minus seven. So again, that guide. Below the range of where the street was looking. Also, then tariffs while they said that they expect the gross margins in the current quarter, the first quarter to remain healthy CFO Davidson's ner says, quote, our gross margins will also be impacted in the near term by the announce ten percent tariff on two hundred billion dollars of imports from China which go into effect on September twenty. Fourth, we are working to gradually mitigate most of the impact from these tariffs over the next three to four quarters. And as you guys can see Melissa, the stock down more than three. Well, a little less now than three percents in the after hours action. All right, John. Thanks, John fort back in headquarters, breaking down the quarter from Micron. There's a little bit of optimism going into the print today today. There was the point made that Samsung looked like it was being very disciplined when it came to d- ram in nand Mizzou homemade that point, which would indicate they thought that you would have a decent guide didn't have the decent guide and it's really been a trick. Trade ever since the company came out of that city conference said prices were weak. Prices are weak and look. There's price sensitivity to. I mean, if anything, the whole story here has just been how aggressive or how rational the producers are going to be to control prices and in a price War. I think you lose some of that. I think you get very defensive and that's one of the dynamics people don't trust. Yeah. I mean, listen, I, I think that we're talking about industrials. We're talking about the sorts of things to lead us higher. What is kind indicating that we're the next leg. I mean, Micron we think about memory is going into a lot of things other than just, you know, PC's smartphones, that sort of thing. And you really have to think what that means for some of their industrial buyers to or the devices that are going in. So this stock is down thirty percent. I just don't see it returning to its past glory anytime soon. And we know that in the past cycle, it had a peak to trough decline of seventy percent. I do see it going higher, and I know the guidance was a little bit weak. But when you look at the numbers, they delivered their numbers were task. I mean this quarter and you go back last quarter and actually was almost. The exact reverse in terms of how the stock react in the after hours. So I still think when you look at this ever since David Tepper brought it up, the stock is up like four or five dollars from that moment that he talked about how did he just a week ago or so. So this little bit of a pullback that we're seeing now, I don't know. I'm not overly worried about it. When I look at their buyback. The share buyback will be something huge. They're talking about ten billion if that gets announced or implemented. That's something that I think absolutely pops the stock higher. I'm a little of freight of, I don't have anything in this space. I'm a little afraid of when a cyclical industry turns. Have we talked about GM earlier that's turned in terms of the sentiment, and it doesn't matter for the stock. It just gets cheaper and cheaper. It's really frustrating. So I'm not right inclined to jump in and maybe do the same thing. If you think that semi's is a cyclical sector have turned, what does that say for the rest of the market and for the economy. It could be more isolated if they grew faster if they grew too fast for themselves and not everyone else grew too fast, but they could also be very correlated in that that that would be bad. Can't chips Intel rallying today, the options markets applying. There's even workings ahead. So Dan, would you see talking about cyclical turns of until topped out months ago. And it's down considerably from those fifty two week highs. But there was a call buyer and I think it was on the heels of your path power-pitch last night. You went over the fast pitch either either way today. Today, all volumes, two times that puts and there was one trade that kind of caught my eye when the stock was trading forty, six seventy. Shortly after the open there was a buyer of three thousand of the November forty, nine calls paying a dollar to for those those break, even at fifty two up about seven percent. And I think you want to go back and think about why somebody might be looking out and up like that. Because as Pete said yesterday, there's a couple of potential catalysts. We know that they're looking to hire a new CEO as soon as possible. They're going to have earnings. They've had a couple of disappointing guides and if that were to turn that would be a target, I think fifty to the upside where you could probably get some good the fundamental stories there and in the previous two days that you were talking about, I talked about that yesterday and the fast pitch, but there were buying November second expiring, the forty six calls. Then the next day, the forty-seven calls. Now you're seeing the more than November calls at tells me a lot because winter earnings, October, twenty fifth. So all this sort of makes a lot of sense on why people are getting more and more bullish and now we're seeing it now in the options market from more options action. Check out the full show. That's tomorrow five thirty PM eastern. Time coming up Wall Street has been taken over by that cannabis craze. There's something happening with till right. That could be a key indicator for the rest of the pod SOX. Plus Karen feinerman here the chairwoman stepping up to the flight. She says, there's one industrial sitting in correction territory that is poised for major breakout, much more fast, straight ahead. Welcome back to fast money, pot pot pot. That's a hottest word on the street right now with cannabis oxygen. The craziest swings betting against kind of a stocks, not so easy breaking down a man who's never afraid to live life on the wild side Dom chew outside. I mean, Melissa marijuana stocks are still pretty lit as well till Ray aside. That probably lends a good amount of validation to the notion that till Ray wasn't really trading on any rational fundamentals when it surged yesterday in many traders cited technical reasons for that Bala trade, like the very small amount of shares available for trading or the short squeeze as some traders bought at higher prices just to close out money, losing positional bets on a sales or a shared drop till Ray has lost around three and a half billion dollars alone in market value. Today's down eighteen percent on a day. When many of the other well-known pot stocks have actually built on yesterday's rallies. You take Kronos group, which is up eight percent today or canopy growth up six percent, some cannabis investors. Are actually looking at that kind of price action as perhaps a little bit more constructive as opposed to the nearly doubling of share value until Ray at one point yesterday. And if you are looking for another example of the crazy trading dynamic behind till Ray as of late, you cannot short till Ray right now or very difficult because there are simply no shares to borrow prices vary depending on who your broker is and without getting too in the weeds about this, get it. But for those already short, the cost of making a bearish bet on till ratios is around four hundred time. Twelve times more expensive than shorting shares of say, an IBM and the same goes for many of the canvas stocks out there. Traders who are trying to get a locate on shares to borrow and short or one to traffic and options are getting used to seeing the letters h t that is hard to borrow. So Melissa speculating on and hedging against the downside, pretty darn expensive in these cannabis names back over to you. All right, Tom, thanks dumped you in the newsroom. Well, as you. Heard till Ray of coursing the wildest wings among all of the pop stocks. These last few days and those moves highlighted key difference between till Ray and the other socks around cannabis king. Tim Seymour owns a number of pot socks. Also on three advisory boards where cannabis stocks and for all of Tim's disclosures. You can always go to fast one. Eight had CNBC dot com. Tim o. how is still Ray different? Well, first of all, yes, cannabis stocks not pot stocks by the way. So I. US IPO I money raised totally here not a Canadian play because we know that the Canadians actually have been the ones that have been leading the entire capital markets effort. Why? Because you can Bank it there. So the fact of the matter is that this this was done here. This is a global company, good for Tillery by the way, very tactical move on their part. This doesn't just happen overnight. They plan their NASDAQ listing off. They went and by the way, that means a lot more people can invest in. It's a much bigger capital markets, and that's the. That's the argument here. This is the largest market cap. So it's almost been a self-fulfilling dynamic. This is actually now significantly bigger than canopy the name that really put this entire called sector into a frenzy when it announced that the constellation brands was jumping. And so the valuation is really what's the problem here. It's not that till Ray isn't a company that's well positioned just like a handful of others like many others, but it's the valuation where they're funded capacity is seven times more expensive than that of canopy when they have one tenth of the fund and capacity again. This is not an insult until Ray. This is just the reality. They're companies that have more in terms of going on there, but that's not what you define it. The valuations who where people are just on some levels been, I think most are this is really what I wanna point out because if you wanna follow what the stocks have done, and this is this is the IPO date of till ROY and it until Ray. And it kind of went sideways sideways at relit out of the gates until we got to this point or the entire sector took off member this canopy. But then you saw till Ray go through this moment where it actually went parabolic somewhere in here. What I think is going on is ultimately it's capital markets. Players. It sheds went players. It's people that know a lot about the sector at least know a lot about trading that said, this makes no sense to me, and I'm going to get in there and I'm gonna play it. And what happens is actually, a lot of people have been caught short stock Dom talked about the dynamic on the borrow what you really see people able to borrow the stock intra-day, but it also explains why it tends to close stronger by the end of the day because they have to get that stock back because they can't really borrow it. That's what. Going on here till Ray is a capital market story at this point, even though it's a company that's very well positioned in the sector cans got a question yet. So when we look at the activity yesterday until or even today, I mean so many as you can pick, is that a good thing for the evolution of these companies? Well, I'm talking to guys in the space and those of us been investing for a long time. The general outcries. I, you know, we're waiting for the crash and the bottom line here is the sectors. Never been more relevant. The legislative newsmen ever been more interesting. The answer Larry industries have never been more robust the raise on. That's the reason why people are focused on this sector is never been better. The trading around these stocks is volatile. You have to be careful. Try this year. Team. Okay. Well played Cam. Thanks to that coming up. Amazon added again, this time unveiling more than a dozen new Alexa, able devices in the news and investor selling a number of different stocks today. Plus the chairwoman years made her way over to the pods. Mine is winding up bitches stock, but she says is ready to rally. What does the name should you buy it much more fast right after this. Welcome back to fast money time for an instant replay back in July here and said it was time to buy United rentals down about twenty four percents over the last, not that long, two months or so, which I think is really overdone. I think it's trade War. I like United rentals right here. I bought it out right about this level where it is today, and I've owned it on and off for the last year or two off for a while. But now I'm in. That was a great call despite all the trade war turmoil United rentals up sixteen percent since then. So you still have? I still a couple of things happen really good earnings and they had an acquisition that they announced that will be accretive. So I'm sticking with it. All right. Well, that was a winner. Swamp. You go to the park. Another idea. All right. So this idea sometimes the market just presents an opportunity right at your feet, and I feel like it did last week in FedEx. That's my pitch for today. So few reasons that I like it, of course, always, I turned evaluation. That's where I look first. So FedEx is cheap valuation to the market, but more importantly to that FedEx is also a cheap valuation to itself. So what do I mean by that? So we have a chart here to show the history or we don't the history go. Here's the history of the p. of FedEx and you could see even though the stock's up the PE has come down a lot. So I think the businesses great. And yet here you have a chance to buy it on sale. So we go back to the reasons it was misunderstood that earnings call last week. They missed the current quarter or the just past quarter, rather by thirty six cents. And yet they guided for the year about twenty cents higher. So net net, it really wasn't that much of a difference, but the stock was down fourteen dollars the next way the next day, which was really excessive. If you're a high flier. You missed a little, then you get crushed. But if you're trading it fifteen times earnings and you missed by a little. And I actually think the guy I'm surpri- end up being a little bit a little bit sandbag needle actually end up being better than they guided so that misunderstanding there was higher labor costs, and people were really sort of confused by that. But to me, the guidance should really have been the overwhelming thing that went should've taken away from the call. So when you look at the earnings, look a little further out, they maintain their guidance. They update for nineteen maintained their margin goals for for twenty twenty. So the stock is really cheap on those valuation metrics. And then the last thing is I'm pretty optimistic about the macro environment for ecommerce and for for their end business. They are more business focused than a UPS as opposed to to the retail consumer. But I'd like anything related to GDP growth. They also are a more worldwide, which may be a good thing or bad thing. We'll. See, but for all of those reasons, I think FedEx presented a very nice opportunity last week and I bought stock Karen, I got a quick question in terms of the UPS versus FedEx, how did you determine exactly? Se wanting to move one more time. So I think they're both great. They could actually move together. I wouldn't be surprised at all. You have a little bit different mix in the end customer. You have a little bit different mix in geography UPS more US Centric probably about eighty. Some odd percent versus FedEx, which is about two thirds in the US versus the rest of the world. So if that weighs on you've either way, if you want to have more outside of the US exposure or inside, you would pick one or the other, but I just think the overreaction to that earnings, maybe a FedEx buyer as opposed to UPS. So carrying your value gal, that's one of the things that attract you to this situation here. The stock is basically unchanged in the year. It's been pretty volatile, doesn't it? Kind of make you a little spooked that the trade chief to its history and to the market. It's just can't get going here. Maybe this one's a pass. Well, I don't think it's a past. You can think it's a passive you want, which is fine. I feel like GDP is growing. These are good numbers in this should participate with that. No more questions time to vote. I think I know. How are you buying Karen's pitch on FedEx, Pete? What do you say? I'm not going to pass prefer ups because it's more domestic, but I'm a buyer care and I love the fundamental story of this company. Dan, I loved Karen's presentation because they love Karen, but I think it was pretty overall is by that. I just think the stock should be participating right now. It's way too cheap, but it's not. So I think you have a one up one down risk reward, which is not that favorable in the market at an all time. All right. We'll see Toni Braxton Macy. We'll see. It's been worried about it, Karen. I'm on your team and bottom line is fed ex to me is a great macro story. It's also a story that TNT continues to actually deliver on the margins, I think makes the cops tough, but I love FedEx here. It's great drawing of carrying. Well, you'd have to be careful. Sorry. Sorry, here, there you go. Oh, all right. The desk because wait in, but what do you at home? Think about Karen pitch log into fast money right now vote, we will real. The results later on in the show plus the madman until right. You will not believe who he's blaming for the wild swings stick around for that and much more at the top of the hour. We are live the NASDAQ market site much more fast money, straight ahead. Welcome back to fast one either. There's a brand new lineup at Amazon, the tech China unveiling fourteen new Alexa enabled smart devices today and dozens of new Alexa features. One of them is even a smart microwave. Let's get to a d. ROY and Seattle for all the details. Hey, DD. Hey, there Melissa. That's right. Amazon announcing us little about seventy new Amazon. Alexa products and features. And the highlight was definitely the Amazon, basic microwave Ed. She got wifi to work inside and they demonstrated with the potato once they put the potato with everything else, except the eating, of course, was hands free. It's super simple. I have a demo potato. I for that too. By the way. But it in. There's a button on the microwave that allows me to. Trigger one potato. There it goes. I wish potato six minutes thirty four seconds. I wish it was more complicated. It costs sixty dollars and ships later this year. Another big highlight was the echo auto. It has eight microphones built into it, and it has a dash found as well for that echo device. It's fully integrated with Alexa and you can use it as a navigational tool. It even can read a book. Alexa, read my book. Getting your selection from article resuming the sum of all fears. So much the better for everyone. If this had happened while Mel that foolish stop. Going to have to try and figure out where which book that was, it will cost fifty dollars and the companies partnering with carmanufacturer some Toyota to be on w and Ford on this project. Melissa back to fun stuff out here. Can we go back to the microwave for just a minute also that just a scape me, I mean, okay. So you have to put the potato in the microwave, and then you tell the microwave to cook it. So where so does it actually say new any effort, and then you had to take on Tatum another room? Well, that's the thing. I mean, that's that's like the the real last mile problem is getting the potato to you potato. Patino in. I know. That's going to do that. That's true. Exactly. Because if you have to leave your couch, then you know the whole thing is kind of. I mean, it doesn't say that it does. So ever. All right. A. d. d. Ryan in San Francisco, it's fifty bucks. So it's not like it's just. It's funny, try this happening, the microwave that you speak to have a lot of interest. Richard guy. Gummy talk. That's perfect. The whole thing. I think those things are all smart devices and you've got to tell you, I think the auto thing is dumb as can be a person who gets in a car in this country who doesn't have their smart phone within the does exactly what they do unless it's not a big deal. I mean, this company can do whatever the heck they want in any industry that they want. But the fact that we're talking about is kind of stupid in a way so. So does today on this news, they got hit loud speakers are going to be much better with better sound. Hopefully, actually I've had them and I have Sonos speakers in their fantastic. And so I think that that it was Sonos trading at all time lows below its IPO price trading about one time sales. I think Sonos sets up to be a very easy takeout candidate for somebody who really wants to compete. You could have said that the last ten years, but Amazon is really stepping it up now with better quality speakers that wasn't the risk over the last few years. So I think Sonos below fourteen thousand most exciting development out of this. I've seen Dan late night, go to the seven, eleven and cook up a chimney Changa. Late night. Yeah. What's her Amazon trade Pete. I think the total focus on Amazon should always be two things. It's data which you get and obviously WS. So this is all two point pretty dumb overall, but you know, kind of fun demonstrations in the history of dumb. Up next final trade. Here's a serious question. Do you know what that x. delivers. Joy. They're having the time of their because America is buying Karen's pitch for our first win in months. That's that's. Vizquel around here we go. Doing song we play when somebody I've never forgot the words selene on all the all the time. Although I sell that that that also ten brownie. Brownie Braxton. All right time for the final trade Pete, what we're talking about micro on the earnings tonight. And then when they gave the guidance that was a little bit weaker than everybody expected stock is off, I think on this down move, it's an opportunity to buy micro, Karen. Well, if it's good enough for America and not Toni Braxton and not selene Dion, then it's good enough for my portfolio FedEx here. Which signed do you like better this one or Tony, Brad, ever heard this one before. I'll say that so so Micron, I think tomorrow's price actually give me really important if it has back towards forty. I think you want to sell the semi's s and that's the way to do it dirty dancing. I mean, I got to tell you. Thank you. Doc. That's. I'll tell you can. Back to you. All right. Rossi Becca, try van money starts right now.

Dan Karen feinerman US Melissa Leo Ray Nike FedEx Pete China Amazon Tony Dwyer Micron Alexa Tim JP Morgan Sarah Mark Parker
Fast Money 08/28/19

CNBC's Fast Money

45:16 min | 1 year ago

Fast Money 08/28/19

"<music> at matthews asia we uncover unique companies across asia prime to benefit from consumer trends that brought her international funds myths find out what a dedicated allocation to asia cannot to your portfolio at matthews asia dot com slash opportunity life in the nasdaq markets later. We're looking at new york city's times square this. It's fast money. I'm melissa leo trade on the desk. Tim seymour brian kelly seat grasso and guy dominate. The clock is ticking one talk. Strategist says the countdown to recession is officially on he will lay out his timeline and when he sees the market topping out we also have a double dose of after hours movers but box and williams-sonoma moving lower after reporting results will break down what's driving driving that action and later a royal rally. How king dollar just got a big boost from the queen we will explain but we begin with today's move higher stock serving with the dow gaining more than two hundred and fifty points energy consumer discretionary industrials all leading the way this as the yield on the thirty year bond had an all time low so you trust today's market rally guy dom snow. I definitely don't trust but i'll say this you know as we get into later part of this week into a holiday weekend. There's the old saying steve noses some the floor never sort market so you could see this market sort of falling through over the next couple of days into early next week but i'll say it again i think this market will commit on on the downside when the vix traits up thirty which i think is going to happen but with that said trading opportunities here and i'm gonna do a power pitch in the back end of the show so you're gonna do now now going to speak to exactly that yeah so there's another saying to don't fight the fed so never short market. Don't fight the fed. You have both of them coming up right the nice crash over on you don't know which way the fed is going to go so you don't know which way you're fighting so that to me is is the caveat to whether the markets are safe to get back in order to stay in right now but i am invested. I think the market it is going great. You're mentioning earlier today. On the call of financials particularly regional banks retail stocks mu these are some of the most beaten down sectors of the market here right so history doesn't brian well because we've seen these moments through throughout the last six to twelve months where financial largely underperformed transports which have underperformed for eighteen months have had these big snap out breakout days when you look like you're in an oversold condition so what didn't make sense about today's tape to me was that you had a flight to quality in bonds. We actually tested the the lows in the ten years. We hit sunday night. When everyone was very worried with the dollar that was rallying a bit <hes> yet some other dynamics that would be risk you know kind of risk off trades and yet you had a huge doc. Moving small caps a huge move in in in <hes> the ex r._t. Or the retail stocks and transports. I think we have oversold conditions here. I think the reality of we're you're trading in a one hundred s and p point range for the last month. That's it with a fair amount of volatility and a whole lot of anxiety and a whole lot of people grinding and gnashing gnashing their teeth and not much has happened so i think today's breakout is nothing you say plant a flag in the ground and say this was the moment <hes> but i do think when you get oversold you get these bounces i do. I do so here's a cliche. It's not a stock market. I never really understood that one but i'll use it for this but you know it's interesting. This truck was actually being passed around. There has been passed around for a week or so but a trader sent it to me today and it basically shows what people will call a megaphone top or a broadening top technical formation not technician knocking to play one on t._v. Today to boy but anyway point is what you you get here. Is this broadening formation and you usually get five touches on the line right and so what does this show is what i found interesting about this chose arts that we have effectively been trading in a very broad range with volatility expanding and to me that that frightens me because when volatility expanse you things break and so i think this resolves goes to the downside. It certainly could go to the upside. I know we're gonna have somebody talking about that in a minute or so but to me it just that's picture that visually shows what we talk about. Every not is it. The trade war is it. The fact is that this isn't that and you have this massive volatility very difficult to trade and likely things break up again in terms of touching watching the line. Does it have to alternate between highs and lows yes so only after number five. If we could go back up it would go down to number six took the orange line which would we don't get at five. Oh five number five is a ranch is is that right so so the way to interpret this as i'm told is it either breaks violently higher violently lower. My view is that we break violently lower but five is as many touches as you get apparently with the old megaphone top we always worry about or we still he's saying there's no volatility left in the market. Now we have extreme versions of volatility volatility so yes. I think both will be right. I think you could break lower and you could break higher. Both will probably happen which which happens. I it's probably higher in my opinion. You saw people reach for chemicals. Today was the last thing they chemicals. I'm long t._s._e. Package it makes you feel you're breaking because because they were so beaten up people who are trying to risk out and they were so worried about global growth now. They're buying those things that they threw out which makes me potentially set up for higher. It'd be the glass half. Full interpretation of the market moves empty. Is you know i mean i was brought up. Believe all street what can go wrong will go wrong another cliche by the way yours is history. It doesn't repeat itself but it often ride the but you know. I don't need to be corrected appreciate. It doesn't make sense. I mean you're mad. I know the mets out of top night last night and we'll talk about. What were you saying listen. I think the market over the next couple of days grind slightly higher think people on the weekend feeling good about themselves thinking. Maybe we finally figured good out with this inverted yield curve means. Maybe to say have another decent day but i think things get really interesting in the first couple of weeks of september and i told became walking in here october is it's going to be a historic month for a number of different asset classes specifically the one that became knows the most about <hes> these everyone's made a point. That's been somewhat kind of emphatic about the conditions. I i would argue that. We haven't seen anything yet in terms of volatility even though i think people felt we've had a big and i think we traded on very tight range here despite the divergence of outcomes as we have here so <hes> i hate to do this but it's a very quiet week <hes> it could explain some of the subdued we also get violent moves in in these types of weeks. I think you have a major expectation of a rebalance out of bonds into equities at the end of the month. This is something that i'm happy ready. That may have been even just the bid to the market. Today you got the sense and therefore really oversold stuff would be a rotation in for for relative value players <hes> but as we've echoed and we've unfortunately had to address almost nightly on this show. There's nothing thing about the trade war. That's changed. Hong kong is still a tinderbox. Give a dynamic with the fed that still unproven fifty now maybe more in the lexicon of where the market is right now except for the fact doc i'm listening to a fed which doesn't really sound like to a man they wanna go fifty and if anything i still think that that's the most important dynamic from the market. You're the only one on the that's us this desk. Thanks for market could break higher. So what would you buy here. In this environment i y by the things that have not worked because today if if today's any indication of where are you should be going. It's energy and it's chemicals the things that have it worked because we know if there's brighter headlines on the trade front all of those large-cap tech names all the semiconductor conductor space everything that is quote unquote trade related. We'll rip higher but the best bang for your buck are the things that have not performed that start to perform perform now all right well the <hes> the countdown is officially on apparently canaccord genuity is tony dwyer says the clock is now ticking clock ticking on on a recession and the market peak twenty four months zero days this about nineteen months. That's how we calculate it but tony says the market will rally more than fifteen percent until the recession kicks in he's over at the plasma to chart it out. Tony will smell wall street's filled with strategists that tell you something they come on and when it actually gets there they change and i'm not going to be that guy. I don't think it's different this time. What you notice on this chart is all those grey shaded areas or recessions. What happens every single time prior to a recession sure enough. You need a u-curve version of the two ten k. This one was a thirty nine percent rally prior to recession. This one led to a <hes>. This was thirty four percent rally before the recession and the peak of the market. This was thirty nine percent and this was twenty nine percent so i think we're gonna go actually a lot more than fifteen percent. I think we'll do fifteen percent in the next year but it actually takes about two years. If you look at the last three cycles the average gain has been thirty four percent. The median gain has been thirty four percent over twenty two months. How do you know then. When is it time like these numbers are great who cares about immediate. How do you know it's time to get really defensive. It's time to get defensive with corporate. Pre-credit really starts to act poorly. What you'll see here is prior to the recession. You had a bottom in moody's b._w._i. This is the lowest level of investment vestment grade bonds. This is the average yield of those lowest level investment grade bonds. It made a low two years before you went into a recession. We just this made a record low. It was a record low. It was the only second time in the history of the moody's b._w._i. Index since nineteen sixty two that the ten week rated change dropped minus fifteen. That's not signaling. That money is shutting down money. Shutting down is what causes a recession and then lastly the fed uh-huh stunningly fed has yet to get really ahead of the market. How do you know when it's ahead of the market and i believe they will. Which is one of the reasons. I still think the market's going to go. How do you know they're not ahead of the market because this is the current lower bounded the fed funds rate and these are the two and ten year no yields like. I don't need to be a master economists because i'm not to know that the fed is behind the market. When you're fifty basis points below the fed funds. I think tony comes over. What do you think and what did you mean you never ask what's on t now exerts album charts and does what she wants to which she should the weather brought paperwork. Wow wow very narrow the little thing at the club waiting okay so here's my question if people believe that there's this rule of thumb that you have a certain amount of time after this indicator flashes a recession signal doesn't that time the more people know about this lag time doesn't that time period that compressed oppressed so it's a great question and i went back and i read my prior notes because i wanna make sure that i'm not full of it either and in all those prior notes every time i'm reading your doesn't make you less but the reason that i did that is to make sure that it isn't different this time that i was saying the same thing back in the last cycle and what creates that lead time is the ten year note you'll drop so much we've gone from from three and a quarter to in the one point four level right. That's extraordinarily stimulant because bank lending hasn't quite shutdown yet so there's still money moving around and it just got really cheaper and you're still at full employment so you have this money that kinda surges into the market because that dropping the tenure and then it kind of shuts down in the time it takes to put that that money to work is what causes that lead time but you get this kind of bump in the economy so you're like. Maybe it is different this time but it's not different this time <hes> in the past times i'm curious also where where does that ten year yield typically dropped from does that make a difference because some could argue that a drop in and we've been sub to due for a long time even though we've been at more than three what november last year or so <hes> we've been up to for so long that people could say that there was money being borrowed at those very the low levels anyway so every incremental drop in the tenure doesn't lead to incremental borrowing on the part of corporations no lead to incremental spending later on it. Does the household level there is no question and karen has brought this up a lot in the last couple of times i've been on there's no question industrial spending and corporate spending has come down because of the trade war that is not debatable household spending however is what is more sensitive to the drop in rates so there's this idea in the marketplace that <hes> the low risk premia ramia and the global overseas negative yields has created this artificial suppression in the long end which means that this may not be a good recession indicator and and what i brought to read is is a quote. If you don't mind now just doesn't sound like there's been a good bit of evidence that the declines in the term premium and perhaps a great the deal of savings chasing a limited number of investment opportunities around the world have led to a somewhat permanent flattening or even at version of the yield curve and that pattern saturn does not necessarily predict a slowing the economy or recession ben banenky february two thousand seven so that quote is saying the the global low global interest rates is creating demand for the u._s. product. That's artificially suppressing the end of the curve so we've done this before and it didn't go very well. Though it didn't go well it was much different cycle but it didn't go well tennis. You know yeah so. I'm curious tony so we're gonna get this repair and the economy's gonna look to improve improve. Stephen grasses said today that people are buying chemicals part of the cyclicals. Is that the best place to be in the earlier segment. You guys were talking about. <hes> timmy was talking about how bonds came down down and it's kinda surprising. That stocks went up inflation. Break evens actually uptick ted. I it was this morning when i think it became a pervasive story on the street that bill dudley godly came out with his op-ed on bloomberg that suggested you don't wanna have policy that allows for president trump to win a second term now. Nobody on the sat or anywhere knows my political bias. That's not my job but you have a vice. Chairman of the former vice chairman of the federal reserve openly stating that the high risk to the market or the risk to the economy is president trump and you don't want to pursue this policy 'cause it might help him that right there gave the fed the flexibility exa ability to become aggressively accommodate as as i've been suggesting lately why because right now they have to prove that they're not kowtowing to president trump now they have to prove on that op ed they have to prove that they're not biased against president trump to have to prove their independence so you remove both tell risk and now what can can they follow their own inflation break even which has it has five year ford inflation at one and a half percent. They want to percent if you don't do anything. How are you going to get to percents at one and a half so that's what really i think is going to kick start this rally that goes toward the peak but a lot of people on the show. You know i've been a permeable. I been bullish for ten years right. What changes that. I've always said to ten curving version changes that tone now. I'm watching those credit indicators indicators and make sure it's not going sideways. Thank you meyer canaccord genuity good isn't he good nervous yet another piece of paper hanging on to so there's a couple issues with that the problem is during those other recessions. The fed had about five or six percentage points to bail the economy out so they don't have that so i'm worried about if the market is pricing something cataclysmic after all that happens and you also want to hunt yield so stick with what's been performing as well so that utilities can can't have further leg higher in this economy look. I think the fed could cut rates from here to eternity. They're not going to get the inflationary desire and they think they can some manufacturing. I think history has proven that they can do anything but utilities are up thirty two percent from the beginning of the trade war <hes> you tell me what's going to reverse that trend not sure coming up boston williams sonoma both on the move after hours will give you the highlights from their quarters but i facebook twenty twenty vision the social media giant seen some major ager money moves ahead of next year's election breakdown who's driving the big span relies on times square new york city much more fast money right after this. I'm david favor join me cro clinton and jim cramer for the opening bell our of c._n._b._c. squawk on the street the podcast cast subscribe for free wherever you listen and you can always catch us live weekdays at nine a._m. Eastern c._n._b._c. welcome back to facebook back in the political spotlight once again ad spending among democratic presidential hopefuls skyrocketing as a race for the white house heats up very julie abortion is in los angeles with more on this spending spending spree hi julia hi melissa we'll despite the manipulation on facebook around the last presidential election the fact that the platform is offer such a a great opportunity to narrowly target voters is once again making it a destination this time for democratic hopefuls the wall street journal reporting that a political action committee focused interning out asian american voters so the cost of generating just one email address for its supporter or donor list skyrocket to two hundred seventy nine dollars from nine nine dollars or less now it does make says that the price hikes would be happening now. The deadline to qualify for the next debate is at midnight and democratic presidential <unk> hopefuls have been spending big to reach the donor and pulling threshold necessary to be included now. It's not that facebook is trying to take advantage of a surge interest. Prices are set rather by demand in facebook's auction advertising system facebook did not weigh in on the reported increase in those the ad prices but it did say quote are at auction is designed to promote diversity of advertisers not just those who did more it takes into consideration whether the ad will be interesting interesting and relevant for the person seeing it and all of this comes as facebook ramps up its requirements for political advertisers now political advertisers. I have to go beyond just verifying their identity and location now they have to provide information about their organisation and who is funding their ads including either their tax i._d. A number of government website domain or federal election commission number now all of this is just facebook's latest move to protect the twenty twenty election from any any manipulation and also to ramp up transparency about who is on the platform and what they're doing and what they're spending money on back over to you melissa all right julia thank you julia carson and how many candidates on the democratic somebody down okara still county so that's a lot the and and it worked in the last election. That's that's what everybody's saying. Is that listen you go out and do this ad spending this digital ad spending at work so i think certainly facebook gets a tailwind from it but the name of the social actually liked. That looks like it wants to break. Out is the twitter machine twitter t._w._i._t. Are i think that's the one you buy on a breakout. I think facebook is also just their core. Businesses is working <hes> so i mean you. You're seeing ecommerce. You're seeing actually lead in commercial usage. You're seeing instagram finally starting to pay some dividends. I think if you're gonna make the election <music> <hes> kind of tailwind argument for facebook. I think you have to make it for twitter. <hes> i think ultimately twitter to me is going to be the greatest beneficiary of a company. That's actually starting to see revenue. Growth growth low teens ad sales high twenties. <hes> that to me is a lot more interesting. It's going to be telling for these guys is going to be a talent for traditional media it has to be they always say it's it's a boon for traditional media problem is media gets caught up in that in that bulls eye of cord cutting and do they have a streaming product so it gets a little muddy but facebook spokane every reason to collapse and keep collapsing. It's up thirty eight percent suing the best out of all the fang names. I would probably stay there. It is but it's also had some pretty big moves along along the way i mean it's in december. This was one hundred twenty five dollars stock and we talked about this a lot wrong. One of the things we got right was the fact that into this quarter facebook with retests tests that all time high we saw in july and that's exactly what happened. You have pretty much a huge double top now run to eleven the point is this i think it trades down one sixty five thereabouts which is sort of fifty percent correction of the entire move. We've seen this year and i agree with both tim and be i think twitter's you bet all right for more on the big money social suspend ahead of the election. You can head on over to our website c._n._b._c. dot com. I'm melissa leo you're watching money on c._n._b._c. Here's what else is coming up on. The show call a royal royal rally. The king dollar just got a big boost from the queen explain. I'm later guy is stepping up to the plate to pitches next big idea why he thinks one big bang could be a home run investment. All that's on deck when fast money returns salaam own asia remains the fastest growing region in the world and will wake up two thirds of global middle-class consumption by the year twenty fifty at matthews asia. We've been investing in asia for over twenty. Five years and our mission is to champion asia focused investment investment solutions that may profit from this growth and build wealth for our global clients over the long term find out what a dedicated allocation to asia cannot to your portfolio polio at matthews asia dot com slash opportunity welcome earnings whip on samantha powers' movers williams sonoma and fox both on the move after reporting. We've got team coverage contessa brewer standing by w._f._a._n. Late start off with josh lipton san francisco with box josh so most of you know you talk to analysts who cover box and one point of concern the company's growth rate two years ago they say around thirty percent but now roughly half that i did get a chance to speak to aaron levie boxes c._e._o. And i asked him about that point and and airing knowledged listened box needs he said to grow faster <hes> <hes> said they listen to advancing their product portfolio so trying to deliver more solutions for customers pointed out there standardising and simplifying their go to market strategy also just more broadly. I want to get his take on the state and health i._t. Spending here more broadly <hes> aaron saying the i._t. Market remains in his words fairly stable though that trade disputes tariffs do not make for a stable macro environment on the call here melissa. He's hammering home on these same themes pointing out listen. We're evolving the product or introducing new products folks. We're working hard to improve to market efforts. <hes> noted that there are making progress in his words on training for example thirty six percent growth in one hundred thousand dollar deals. No the large install base of customers the strong product roadmap making the case that he's real opportunities ahead but you can see that stock down to down right now and remember mel heading getting into this print. It was already down nearly fifty percent of the last twelve months back to you all right. Josh thank you josh lipton. In san francisco. I mean we heard similar sentiments from autodesk different businesses but sort of the same kind of tech sector same tariff rate headlines and so so i mean the quarter ended up wasn't horrible quarter and the gods the full year guidance wasn't wasn't horrible either. It comes down to valuation and still probably close to seventy times forward earnings. It's just too expensive in this environment where people are looking for growth. It's been cut cut in half over the last year july twenty seven thirteen now. I don't think you buy it. You gotta wait for the fuss. We haven't seen it. I agree with that e._p._s. Box has beaten e._p._s. One hundred hundred percent of the time and beat on revenues seventy five percent of the time so the fact that they beat doesn't mean that you should be out by the stock the c._e._o. Nailed it. They have to grow quicker. If they're still losing losing money you have to get a much larger growth. Wait great rate to be buyer of the stock. I just think they're in such a commodity space to be growing sixteen percent to finally be competing with amazon microsoft. I mean there's i just don't see it for a company this multiple in this environment so no. I don't even wait for a flush all right. Let's move on a to a retail triple. Play five below ph williams-sonoma all moving after hours condenser brewers on all of those stories at headquarters contessa hi there melissa yet back to school for five below beloved for cheap pencils phone chargers and a superb candy selection delivered third quarter guidance that wasn't so sweet c._e._o. Joel anderson says it reflects the current tariff situation and the timing of their efforts to mitigate the impact the company stands out though for its willingness to tackle the impact of tariffs and expects the increase as scheduled scheduled throughout the fall stock and extended trading <hes> we did see dip somewhat <hes> right after they reported now what you can see just off slightly half a percent or so all right ph fancy clothes by tommy hilfiger calvin klein michael kors and lots of others delivered matching top and bottom line beats but we guidance for the third quarter her ceo manny trico says north america and china had week traffic trends that includes the impact of the protests in hong kong so the company had to dress up their promotions tends to lure in the customers the shares after hours just off slightly williams sonoma really cooking when it comes to home furnishings com sales up six and a half percent where analysts analysts were expecting three point three percent the real spice in these numbers west elm which the ceo calls its biggest growth opportunity comp revenue up more than seventeen eighteen percent and while the company raised full year guidance the implied outlook for the second half is lukewarm starring lease three pined minds from spice really pies or atlanta's creative writing you can call it whatever love contessa everywhere so again the impact of china tariff the impact of tariff particularly p._v._a. I mean they're not necessarily as high end is a louis vitton. Those are the ones that really he got hurt during the china terrorist but i get i think the story about retail mix bag here and there <hes> williams sonoma not a lot of people buying pots but i guess <hes> let's contessa went out on a limb with the west l. i. On that contestant funds or writing was much rather than brian <hes> i will say i likely to know me here. This is a company. That's trading it with that new guidance and that's raised guidance. You're at fourteen and a half times two thousand and nine thousand nine hundred. This is part of the housing trade to me. This is part of the home depot trade. When you go to home depot you probably stopping and william sonoma to outfit brian. I know you probably not pots and pans but maybe toaster. Maybe i tapley some some nice coffee. Auto williams-sonoma the problem williams-sonoma as running into massive resistencia sincere rounds seventy dollars seventy two dollars two thousand eighteen september two thousand eighteen seventy two was your resistance right now. It's around seventy dollars so i would wait looking at the chart training at sixty seven thirty ish wait until it blows through that seventy mark before you dabble in that name usually used to have this beautiful pashmina that used to wear on the desk. Remember from me yeah. I actually like pineapples. It was it was fantastic. It was really nice. Do you have any pasadena's of course i do as we get into the autumnal months. What are your margin. The guidance wasn't terrible at thirty two times giving their e._p._s. Growth rate and given the twenty percent sales growth rate last quarter. I think the stock off from its all time highs is worth the bayreuth live right here coming out the greenback rallying today and some big brexit drama across the pond will break down one way to play the dollar's dominance but first guy making his fast fast pitch comeback with one that he says will knock it out of the park. Find out what the name is. We come right back more fast money right after this <music>. I think the market is now behind google. I think google's goose ahead of the market. I think google will sort of hang around here as the market goes down. That's when you wanna buy alphabet. That was guys pitch. Back can may for google since that call alphabets up nearly two percent but it's big boots off its recent earnings report. So what do you do now that tommy was pretty lousy because if you go back and look really cratered in june so the timing was bad. I think stay with it. Although i do think the market is vulnerable here. I think valuations suggest last quarter suggests that google is probably figured it out so i would stay with alphabet the google l l. You got another fast pitch for us right now. I i love the power-pitch maybe more than anybody in the history of fast money and you're going to be shocked at what i'm about to pitch and we sort of teased at the top of the show. Hold your hate twitter folks but here it goes. I'm gonna power-pitch city and you'd be like wait a second. You've been so negative on banks. Especially city european appear exposure. What are you talking about and right on all those levels but sometimes you have to make a trading call. I absolutely think banks go lower in early part of next year if not october but in the short term i can see a rally trading at a discount. What does that mean. Well city just reported. This attachable book was roughly sixty eight dollars. City yesterday traded below sixty two when it typically gets to that kind of discount. It's been a buying opportunity number to think. The bond market is overextended. I think rates continue continue to go lower but in the short term you might have seen a top and a t. Maybe rates takhar that should be positive for banks as well and third it. Did it helped critical support. We're gonna pulp a chart and show you then nathan actually mentioned this the other night but the sixty dollar level in city has been decent support so if you go back and look bless you over there on underside sixty s actually held a couple of times so although i don't like the bank's long-term tremendous issues i think for a trade city. The city sits up really well over the next week and a half. Hey guy tim appreciate your sensitivity to guy coughing stage. I liked the fact that city is is up there there for you because i like to pick them long to pick but i'm very concerned about their net interest margins and that is something for money center bank and if you looked at the last numbers which were fine is a big area of concern for all the banks and the city is well. The numbers have been really poor and again. I think the european exposures one of the reasons. The stock has traded so poorly. I don't think the banks are fixed at all. I think the point you bring up for the long term. Suggests banks go lower in the short-term though and we've seen this before i think you can see it twelve twelve to fourteen percent bouncing the name in a market that goes sideways to slightly higher segment that still probably going lower longer term. Hey guy it's p._k. Longtime time listener first-time caught behind brian pitch there. I'm curious. We have a fed meeting coming up in september potentially. Maybe trying to re steepen. The yield curve serve. Is that the catalyst for this trait. Maybe you've talked about this operation twist. A lot of hockey fans remember tony twist. I totally digressed wanna. Look that up but yes that absolutely could be a catalyst again. This is a trade this. This is more trade than investment. I think this is short term. When i say short term over the next couple of weeks and again you've seen stocks like citi rally eight ten twelve percent in the two week time and to your point. Maybe that twists that operation twist if the fed talks about it. We'll be the catalyst to get this done now. Mark questions time to vote. Are you buying guys pitch on city. Grosso i'm buying it and for the same reason on a technical basis if you look at that sixty the dollar level that has been great support back to january of this year but i guess guy would probably estimate that guy would agree with me on this if it does break below sixty sixty. That's probably the way to exit or puke. The trade became you know what i came into. This thinking was not going to say by. You probably can't read this but i wanna say bye. Dot convinced me completely changed. My mind portrayed tim at triple joker joker money. Ed baxter did very well in this last. I love the fact that the capital ratios are going down why because they're paying out more banger becoming proper place hey by on the desk. You know what that means die tonight. <hes> you guys at home. You can vote on guys pitch on city to our twitter poll up at c._n._b._c. n._b._c. Fast money will reveal the results later on in the show coming up next dollar just got a big boost from the queen of england why the greenback may be setting up for a royal rally. Stick with us fast monies. He's back right after this delivering alpha most important investor summit nine years running strategy to from leading alpha generators direct access to policy makers and government leaders on september nineteen see his calling the shots now go to delivering alpha dot com to attend this year's blockbuster event you will come away with ideas that you can put to work in media plus special guest i bice president mike pence toxic connie and trade war impact reserve your spot now at delivering alpha dot com and welcome back to the pound getting pounded aim falling as much as one percent against the dollar this u._k. Prime minister boris johnson double down on brexit. Is it johnson moving to temporarily shut down parliament preventing lawmakers from passing any new bills that would stop the u._k. From crashing out of the e._u. Basically he asked the queen if he if she suspend the power of parliament she said yes so the problem won't come back until just days before a key e._u. Summit brazen right so this obviously of political tactic frankly. It stunned me and i didn't. I was stunned me that the market didn't react more to this but the net net of this is what you're starting to see is country start to. It's one more shot in the currency war because that's the power goes down. People go into the swiss frank. This was national bank said that's strong. They're going to intervene and it just creates more chaos. We've talked about this is volatility. That's coming from the currency market so if we're looking into the fall and what we can what can break currency markets can break and obviously if you go into the dollar to the u._s. Dollar just remind you if you're looking for the weightings of the dollar index here they are. It's about fifty eight percent euro almost actually closer to sixty now. It's twelve percents pound. It's about fourteen percent japanese yen and a sprinkling of other european currency so <hes> historically to me. The pound rising against the dollar has been a very good sign for risk assets assists and reflation traits along with the five year part of the curve without getting too deep into global macro. Seeing pound fall is nothing positive for me as an acid alligator yeah and the impact on u._s. companies. It should be well. Maybe not a significant. Is this whole yuhuan situation. We've seen but in terms of what's going on in currencies you know we've talked about a currency war. I think we agree with this. At a certain point. It becomes a currency crisis in the differences in a war. You can control things in a crisis. You can't and i think we're on verge of that. Which is why gold still works and which is why. B._k.'s bitcoin will probably still work the opposite by the way just in a war. You can't control war because award is the crisis is measured right. It's it's it's interesting yeah but kersee crisis comes when you run out of reserves and you can't do anything anything that's the crisis part of it and there's a couple of countries that are looking at that right now. Turkey south africa those are the two but it all stems from a strong dollar which hurts the u._s. Both nine. I make the argument that we will have. We will lose the war if we choose to go into a war because we don't have the reserves actually prop up the u._s. Dollar we have the firepower on our own to unilaterally property. You don't wanna strong dollar. Though that's going to intervene in dollars dollars you can just print more dollars. Screencrush increase supply <unk> dollar will go straight out and by the way is a bitcoin holder. Please do and by the way cell phone. That's the other alternative they could use the balance sheet again so they stopped the quantitative tightening if they ever went back to quantitative easing easing that would do it all right well. The strong dollar could mean even more good news for the mighty u._s. Consumer mike ozone san francisco with more on a big bullish bullish in the options market scene yeah we you know it's interesting because of course just in the second half now of august. We haven't seen that much options activity. Even he was alluding to this yesterday below average in most cases but extra t actually traded well over ten times. Its average daily call volume today on a low volume for the options. This is market. That's a particular standout where we saw that. Activity was the september six weekly forty strike calls. Somebody paid about a quarter for twenty thousand of those. That's making a bullish. I bet that x r._t. Could rise above that strike price by at least a quarter they paid. That's going to be a week from this coming friday. So that's a short term. Bullish trying to take advantage of the fact that options look very fairly priced here. Bullish bet for one of the sectors at hasn't performed all that well this year. This is sort of what we talked about right in the block do you do you trust this bounce and some of these sectors as we named retail specifically brosseau well i wouldn't you think that the worst is over for a lot of these retail names or the fact that they've <unk> priced in a heck of a lot to the downside. I don't know if you can. I always use this argument that it's not priced in. It's priced in but i would think that there's a heck of a lot a lot of headwinds that have already been established. A ready been assumed in the retail space but stick with the winners stick with the star sick with a t._j. Max is stick with the walmart. Stick with the cosco's else goes. Don't go into the deep end of the pool on names that have not perform well a mike. This is a short-term trade granted but i mean what what's your feeling on what they've priced christ in because maybe what what the retail stocks have not priced in is an increase in the new terrorists that they could face particularly after december fifteenth yeah well i mean of course. We were just talking about currencies. Some of those currency issues have been a little bit of an offset for the tariffs haven't they so that's one thing that we could certainly take a look at we have also seen some standouts target obviously performed very well depot perform very well. Costco is a retail upside surprise earlier this week net of that store opening in china so not all of the news is bad necessarily and of course the other issue is. Where are you going to put your money. I think that might be one of the reasons that people are doing this and on top of all of that with the volatility we're seeing an option prices not being up as much as we might otherwise think that they should be. That's probably why we're seeing them. Use that to make their short-term bullish bets here all right mike thanks for that at mike cohen san francisco for more options action tune into the full show. That's this friday five thirty p._m. Eastern coming up the thirty year yields to its lowest level on record so i got us in the mood due to do a little yield hunting up next best places to stash your cash. We are live the nasdaq in times square much more fast when he's still ahead. Welcome back to pass money a rack on wall street with the yield on a thirty year. Bond tumbling below two percent to its lowest level level on record. The long bond is now officially yielding less than the s. and p. Five hundred dividend yield for the first time in a decade meantime treasury secretary steven mnuchin out in just the past our so saying a fifty or one hundred year bond and ultra-long bond is under very serious consideration this he told bloomberg which i mean makes aac sense financially right. Why wouldn't you go out and borrow money at effectively you know no no cost to you and so i think that certainly makes sense in terms of i'm looking at it financially ashley in terms of how much we have. That's a whole different story but when you look at kind of the thirty year bond at a buck ninety three. I have to say to yourself in thirty years it. Is it going sometime in the next thirty. Years are rates going to be higher or lower than this and i think it's a pretty safe bet to say. They're going to be higher at some point. What would that do to the yield. Curve me theoretically really of an ultra long. Bond is yielding however many basis points above the longest current bond thirty year than does that steve kerr kirk. Yes it you will have a pivot in the curve in the long end and we've seen this. We've seen this in a couple of corporate issues. We've seen this in some of the <hes>. The biggest companies in the world have been able to do it. This does shift some of your your liability and your duration risk and it is a smart thing to do. It's something the european union. I think she'd be doing all right with the thirty year. Bond now yielding lessen the essence we decide to play a little game of would you rod yield hunting sil- we've picked four socks and the s&p that are yielding more than the long bond so we kick things off with nordstrom yielding more than five eight percent compared to one point nine percent on the thirty year so tim. Which would you like to me the thirty year bond no question i would rather i would rather the thirty year bond walks term. Five percent in nordstrom is twenty minutes of trading on a bad day <hes>. It's not the reason to go out and buy this stock. It's company that right now down thirty eight percent in a year <hes> when in fact we've answered no questions about the company the only the stock really comes when you talk about a takeout. <hes> and i'm not even sure what price that would be so thirty. You're next up. Wells spark yielding just over four percent. Would you rather wells fargo or the thirty year bucks so this comes down to a timeframe right because if i'm looking at wise the thirty year bond down is because as we think bond yields are going even lower which is not going to be good for wells fargo in the relatively short term so i did that whole thing about thirty years. The only person has a thirty year timeframe is warren buffett. Let's say it's a one year timeframe than i wanna buy. Thirty year bonds all day long and twice on wow johnson and johnson yielding around three percent right now steve every reason to go. Would i rather johnson johnson. Let's get that out right now. It's around three percents. There's not that much of a difference. I think the market's going higher so i think equities are going higher. Johnson johnson had a bunch of people. Call it off sides. I think reestablishing long positions johnson johnson interesting one one apache yielding four and a half percent right now thirty year bond or patchy. God miss the duck commander. There's this would you rather on your lunch and you'll hunting guide. Can we not me attaching listen. Apache was a fifty in our stock in october twenty one dollars stock now so the wipes out the dividend very quickly <hes> it has bounce over the last year year and a half but the bounces have been short lived so to answer your question. I think i'm in the p._k. Tim camp wow. Wow wow the thirty year bond like j. l. o. w._w. With the nextradio sure data w trades the moment you've been waiting afforded time to reveal if you at home are buying guys pitch on city group guy and the deaths percents said no they are not buying your city. I think it was <hes> forecast because we have three buys in the desktop version. It was not toni braxton. She wants to hear the every night. I now have lost ballot. Take such only when and i get a visceral rated in these games i take when everybody gets straight equal evisceration time for the final trade tim again. This is part of the housing trade that i think is could also share in wilmington there but the bottom line is fifteen times. They upped their guidance seven and a half percent comp like he okay so we talked about lower rates. We talked about currency wars. We've talked about a potential recession. You know what does well in all those gold newmont mining the look at one chemical space any you play five percent yield t s is the ticker. That's how it comes out on their. It's gotten beat up. The stock price recovered e._s._e. A shot to the great high school football the player of the georgia they played in the corky kell over the weekend and they all watched fast money. You know you find that hard to believe citibank for all your people that voted no go back tamar five four one eight. Don't go anywhere madman who to kramer starts right now brought to you by fidelity where decisions are clear and costs are lower than ever learn more about our industry leading value and open an account today at fidelity dot dot com slash trading fidelity brokerage services l._l._c. member n._y._s._e. S._i._p._c.

fed facebook twitter melissa leo tony dwyer asia tim new york city matthews asia steve kerr google boris johnson Hong kong williams sonoma president china
Fast Money 04/30/19

CNBC's Fast Money

45:31 min | 2 years ago

Fast Money 04/30/19

"Want to build a successful digital business? Build it on the right digital foundation VM ware solutions help you develop breakthrough applications faster and deliver them to the cloud of your choice. VM-ware realize what's possible? I money starts right now live from the NASDAQ market site. Overlooking New York's Times Square, I am Carl Kingston informally are traders on the desk. Tim Seymour Brian Kelly, Karen feinerman an guy a dummy we're going to start with the big after our story. Of course, it's apple surging after beating on the top of the bottom line the conference call kicking off right now. Take a look at the stock up almost five and a half percent. Full team. Coverage Josh Lipton in Cupertino outside of Appalachia Q, gene Munster monitoring, the call on his red iphone. Let's kick it off with. Josh you just spoke to Tim cook. Josh. So I did have the chance to catch up with apple CEO, Tim cook. And one question car right up. The back was clearly what are the trends. He's seeing in China Grier. China revenue crawl ten point two two billion that was down twenty two percent. But I ask what are the trends? You seeing there is he seeing signs of improvement and cook telling CNBC he is saying March was better than the average for the quarter, we adjusted price as we got into the quarter, we adjusted to take back the weakness in the currency next. We rolled out our trading program that had gotten some success in the United States. And I believe that the trade relationship. I don't mean the tariff. I mean, the tone is much better today than it was in the November, December timeframe that affects consumer confidence in a positive way. Most of us call about the replacement cycle. Listen, we know that sleigh. Thinning people are keeping their iphones longer. It's something apple itself has talked about on the conference calls the executives at apple argue. They do have levers they can pull those. They talk about pricing plans. They talk about their trading programs. I asked cook how well those are working cook telling us a combination of the trading program, and the installment plans have lit or retail in online performances to be markedly better than they were. And I feel that is gaining traction. Clearly, the price adjustment in China's helped as well. Both the part that we did and the part in April that the government really lead with their stimulus program of the VAT value added tax reduction. And Finally, I did ask him about Qualcomm, obviously, a very nasty legal fight there. We covered extensively on CNBC. Then those two companies made that deal right during opening arguments in that courthouse in San Diego. Last cook. Listen, what changed brought to the table? There cook telling us we came to the regime and on three really key. Things was a multi supply arrangement. The second was a royalty rate and a direct license which was very important both parties. And then the third thing was get rid of the bloody litigation. And so those three. Things lined up, and we've found the intersection of all those things that would be good for both companies and is good to have that behind this conference calls ticking off right now Korol bring you headlines as they come back to you or Josh, thanks. We'll check in with you later, including tonight's move. Apple is up more than forty five percent from the January third low are apples woes behind it. And do you keep buying the stock guy? Adama? What do we do Fidesz? You can't just start with that. I mean, we've been doing this. So this is your Matt. I mean, this is unbelievable. Questions and it's not about for. Set. No answer your question. And I'm not gonna pretend to be disingenuous for me to pretend bid some raging. Apple I have not most of the people on the desktop. I have one thing we've said is as as as revenues continue to grow in services. And now they're nineteen point seven percent the valuation of apple has to get better. And that I think what's happening. Now. The question have to ask yourself is as that number of services goes from twenty percent to twenty five. What is the right? Multiple for apple. I would submit it's close to a market multiple. Maybe eighteen times that gets you two hundred thirty five dollar stock thereabouts. If you want to give them a bit of a discount, sixteen sixteen and a half, it's fairly priced here. But I think that's the calculus that you have to do going out of these numbers, which interesting is actually the street now seems to be giving you a hybrid valuation. Right. You're getting guys that are giving you essentially a software valuation for half of it, or at least proportionate to the revenues and services blended with their hardware valuation. And I think it does get you actually somewhere around the SNP, which I think if you count apple cash, it's actually still still. A lot of value here. When you add in the fact that this company is going to do fifty billion dollars of capital markets activity, probably in the form of buy backs. Maybe they increase the dividend. But they pay you. Well, I don't see why you don't stay long the stock despite a stock that was so overbought so outperform the rest of the market going into it makes this move to me aftermarket, very impressive. Although going into the print. It was not it didn't run in hot. Right. That's true. I think you know, last night's Google disappointment. Clearly, didn't I'm surprised at actually wasn't hit worse that everything wasn't hit. Whereas, but they did they did increase their then the Bivac is big. That's that's a really aggressive by back. Google you really could learn a lot from the buyback tippety at apple just throwing that in there. But I think I agree with you. It's it's it's about fairly ish priced, which you wouldn't you wouldn't think something this big would actually be. It's fairly priced. I own it. It's not a giant position. I probably wouldn't add here. But I think there's a big sign of relief that China did not get that. It didn't get worse. Than fact, it's. Seemed to have gotten better, you know, they talked about repricing a little bit in March. Maybe that's why some of the hardware gross margin was a think little bits. And after I don't know. We'll see what they say on the call, but a big sign of relief as a as an here's my question. If Cook's comments about tariffs right in China tone, being better does that mean, we can stick with the cyclical hardware unit story a little bit longer may d I mean, I think listen a lot of this is priced in mentioned we're up forty five percent off the Lowes. We've priced a lot of this. I think the risk to apple here is is this is good as it gets. So a lot of stuff in. This report was was fantastic. But a couple of things that worked so fantastic. Right. We have year over year revenue declines apple hasn't really seen that we have some concerns about the iphone sales. Yeah. They were better than street expected. But there are still down. Are they going to be able to take that that share back? We saw Google spending a lot of money on their pixel in competition. So at the fairly valued price that it is as everybody somewhat. Agrees on here. I don't this is you think there's more upset. Well, then maybe maybe it doesn't get. But I think this is about as good as it gets. I think in terms of valuation in terms of what the market is expected here in terms of what what I think the consensus consensus is double digit declines on tone units. I mean, there's there's no secret to that. That's in the price. So to me, if this company has any upside, I think both from services, which is let's face it, the delta in today's move from a flat number two where it is all about services because I think the market could have been at seventeen percent services. But I tell you in this market in this where we are at whatever stage of this rally you on a call this apple to me seems to be one of the safest place relative to what I think is market. That's probably a little frothy. We love talking about cash levels whenever we will comes up cash quarter-on-quarter down eight down eight percent to twenty five interesting, which is still a staggering number though. I mean, we've talked about down eight percents still choose twenty five. Yeah. It is interesting. But to Karen's point there, at least, they're putting at least they're putting the money to work. Now, you can argue maybe they should be making acquisitions. The fact that seventy five billion dollar buyback is not insignificant at all. And I think Brian makes an excellent point. I think if service revenues were declining and we're fourteen percent with the numbers, you cited we've talked to have a much different story now, but the product mix his changing, the valuation estimate is sequestered seems to be service the services, depend on iphone growth. That's how you that's how they get their services. People aren't all of the sudden just signing up apple services without a phone. So if you have a decline in their core product, do you still get that grow? I think people do sign up for some services with a phone. They already own that. They don't be. They didn't buy a new one. That would be the best case scenario right by new one. And they loaded up with all kinds of services. But I think you'll see some adding two phones that are out. You don't think that cooks installed base story billion phones around the world that doesn't mean that is a ring to you. I think it's in the price is what I'm saying. I'm not I'm not arguing that the story doesn't work. I'm just saying that these levels forty five percents off the low. These are all things that we know. So the risk here is to the downside. That's all. I'm saying, I don't think you have to short it. I don't think Apple's going out of business. All I'm saying if you caught this forty five percent run takes off the table. Buy yourself a new iphone? He he's old conversations about apple is are you an investor or are you a traitor, right? And I think people lined up on both sides of this. And I think this is a great time. If I may kind of interpret some of your your criticism, this is in time to an investigator because I think ultimately I wanna own apple long-term, and I want to own it. Because if you guys are called you bring up the very important install base. I it's you know, outside of Facebook, who's got a more ludicrously. It's let me work on my hyperbole. Let's just say this is a tremendous asset for apple and they continue to lever. And let's face it. We all would agree. They haven't really levered this enough. But when I think of the multiple that services companies get with his AWS, or whether it's Salesforce, and I think at the management team at apple why wouldn't I be giving these guys a premium especially on that installed base to be an investor long-term and maybe cautious on the short term. I think you can be tactical. But I don't think you want to run far away. Well, that's the thing. What is the value? We were just talking about it before the show. What's the right? Valuation for their services business. We sort of went back and forth, maybe twenty five times. But I don't know if that's right. I mean, you can make an argument that should be more than that. Or maybe shouldn't be as much because it's such a mature company. I don't know. But I think twenty five is reasonable. You can do the math in your head. But I think again, Brian Briggs up into my head on would you say I couldn't do. The math in your head. It's creating problems one. They sell things on CNBC for number two. It's actually been good trading stock if you'd think about it. This was two hundred twenty five dollars stock at the end of last year treated down at one forty five. And here we are again. So for traders that's a panacea. So you could make the argument should be invest trade. But quite frankly, this has become a good trading stock for more on that. Let's bring in Luke ventures founder fast money for gene Munster, gene, your big takeaways from the quarter so far. Call. I think there are three that aren't as obvious in the first is this company is an earnings powerhouse. I want to put that in a perspective. We just usually gloss over that EPS number. They're going to earn more money over the next five years. This is what we estimate compared to overall FANG combined or call it equal amount. So this is under appreciated. I think by investors and important part gap earnings powerhouse the second zone. Put a finer point on China. It did improve. Specifically, the iphone was the pain point last quarter. We estimate that the iphone. This is not a report number was down forty percent four zero in the December quarter, and it was likely down twenty eight percent in the March quarter. So that was cut in the magnitude of improvement in the last is the significance of the buyback, but on the call here. So I haven't heard the full conversation that you've been having. But this buyback maybe a cover this. This is a huge deal and just to put into perspective is that they if they make good on their promise, we're going to be listening. For the call and the timing on this to be net cash neutral, if they make good on that promise over the next five years that theoretically should raise the stock price by about twenty-five percent. And we'll go through the details of the math on that. But those are my three biggest takeaways they're less about this quarter one. If I had to add a fourth which is an important one is this is probably the best play on five G, and we're gonna get tired of hearing about app on five G, but stay tuned for more on that, gene. It's care. And let me just ask you something about that aggressive a buyback. I know they generate a ton of cash. Do you think that they should hold back? Some of that case, they do want to do a very meaningful acquisition or they could just generate it and even become somewhat dead if they had so they have the they will still have after they get cash neutral. They'll still have about one hundred and thirty billion in cash on the balance sheet. They also have one hundred excuse me, one hundred fifteen one one five in cash one hundred fifteen in debt. So that's the so care, and they'll have. Billion dollars to if you will make a massive acquisition, even at cash neutral. Hey, gene is Tim remind us where you are in terms of apple TV. And just you know, what you think the timeline is for this being either meaningful or truly accretive to the story. We're talking about here. It's still early. The probably the best play is going to be around the services side. And we're we're gonna hear about in the fall in terms of that seven probably seven dollars a month the video subscription piece, it just plays into that that services segment I was wrong for years on them coming out with a TV. I don't expect them to do that the way you get apple TV now as you buy a Samsung TV that has apple embedded which just started a ship LG has one too. But I think what you know. I just want to wrap this up before I jump back on the call Carl. I think investors are are largely under appreciating. What the stock and do I think this this story could be three hundred and fifty dollars stock over the next couple years. And I think that they're going to surprise people on this earnings power, gene. We're going to check in with you later in the hour. Thanks, very much Jeanne Munster talking some thank you put a point on all of this current. What do you think long? I'm staying long. I sort of I feel like they've got a little bit of a mental after what was a really disastrous start to the year. So I'm staying long, but I'm not pounding the table here. I wouldn't I wouldn't be adding a lot and every answer the question of own. Don't trade it traded don't own it. I think I think you can be a traitor and an investor. I am a traitor. That's what I what I do three weeks to three month is my time horizon. I will wait on apple. I will play that five G rollout. But it won't be tomorrow. More section tomorrow soon. Be really interesting. I mean, if this is one of those things Jim talks about all-time opens a to fourteen on big volume fades arrests today that might be a talent. Brian could absolutely be right. I do think you can trade the stock knows no disrespect to Tim or Jim Cramer. It's provided. You some great opportunities that to say that I've gotten it. Right. But I think it's a traitor. You can absolutely tray this. I think tomorrow in terms of volume in terms of price action. That'll be the Tel for the next. This is ten percent of the trip accused. This is seventeen percent of the X. Okay. And it's obviously three and a half percent of the SNP. So it's it's a big deal for markets tomorrow to state the MD we're going to keep you covered on all the big news after hours and bring you the headlines as they break out AMD up after a big beat Amgen pretty volatile this afternoon. We'll bring you the latest. Plus, Mark Zuckerberg taking the stage today at Facebook's developer conference. Dr. Home his push for privacy. But will Wall Street by in? We've got those details we are live from Times Square New York City a lot more fast money right after this. At fidelity, you get value. You won't find anywhere else decisions. They're clear costs they're lower than ever and account fees. There's zero so you can invest with zero trade offs open an account today at fidelity dot com slash trading zero account minimums in zero counties apply to retail brokerage accounts. Only expenses charged by investments such as funds managed accounts in HSA's commissions interest charges or other expenses for transactions may still apply. See fidelity dot com slash commissions for details. Padilla brokers services LLC member NYSE. Welcome back to the fast money and earnings alert on Amgen, the drug maker pretty volatile. And they after hours, let's get to make Giral at H Q monitoring, the call on the blue biotech phone. Meg. Hey, Carl pretty tepid response from Wall Street to Amgen's first quarter beat let's get right to the Wall Street reaction Jeffries. Jared hold saying that one some one timer helped drive their earnings beat. But interestingly drugs facing patent cliffs and challenges, namely, n bro beat which probably will not be viewed as sustainable over at Baird Brian scorning telling us, quote, there isn't a lot to be excited about a moving. That's their big new or supposed to be big new migraine drug looks pretty bad for what people think could be a mega blockbuster class of drugs at this point that drug coming in at about fifty nine million dollars in revenue for the quarter. Analysts had been looking for at least eighty two million dollars Thirdly. We'll get to JP Morgan Corey chasm of saying again and roll reported. A noteworthy beat albeit new launches amo Vig again and repack that's a cholesterol drug. We're somewhat discouraging. So guys, you can see why MTA not really trading up so much. In the after hours, Carl overdue or back. Thanks very much. It's worth noting. So far this year biotech more than tripling the performance of the broader healthcare sector, both still underperforming. The SNP. This have more to do with biotech are the historic underperformance of the broader healthcare space. You know, I'm not really sure. And then also you overlay the political climate that we're in right? So I mean for me, even though the down a lot I can't live with the overnight. They have some failed drug trial. I just can't live with that kind of uncertainty. So if you want to be exposed to the X P I or the that would be the way to play traded horribly coming into this though. So I think tomorrow morning for the next couple of weeks. It's not gonna look good for these. They didn't trade. Well, they've come off their highs closed near the lows of the day today. Now, you've got 'em, Jen. The biggest one out they're coming out with. What is looks like lackluster results, nothing lackluster results. But the response is lackluster, I would stay away from this. I think the results are pretty good. I mean, they beat on EPS beat on revenue. They raised the lower end of guidance by the beat little more than two beat which is good as make mentioned and bro beat. Is it sustainable? We'll find out same with new last and it terms of this. She mentioned drug ammo Ving that just started a promotional campaign. You can't watch TV now without seeing a advertisement for the migraine lately. Jesse billion six million? It was like at this tough. But this is a drug that can grow so valuation is compelling. The stock has traded Welby ks right? But I think you can own it here. Well, I tend to agree with that. Also repacked the sales in the us up ninety percents is and other drugs. They don't talk about look we we've gotten so used to talking about the big three or four in the biotech world in terms of the pipeline. That's going dry and people forget about the balance sheets on these companies in the strategic positioning. I think I think sector in the mega cap biotechs is as poor as we've seen it in a couple of years, and I think based upon that these numbers were absolutely fine. I don't see a turnaround overnight. But I think you're safe here with these balance-sheets where we talk about the policy uncertainty on healthcare. Are we still worried about drug pricing regulation crackdown in congress things? Like that the president think it's out there at once. You know, you see, obviously Democrats are really gonna pound that heart, and maybe maybe a bipartisan issue. So I think for a while that will still be around. But every single time that's happened. It has been the chance to buy it. If you can just hang on for long enough or. Right coming up checkout where we stand with apple Tim, cook speaking on the conference, call right now as it inches closer to a trillion dollar Mark that price to twelve o eight plus a record close for the SMP as we go into the month of may Tony Dwyer says don't chase this rally. He'll join us next much more fast money after a quick break. Brought to you by fidelity where decisions are clear and costs are lower than ever. Learn more about our industry leading value and opening account today at fidelity dot com slash trading. Fidelity brokerage services LLC member NYSE SIPC. Welcome back to fasten money, the S and P five hundred closing at a new high and the month of April as the record rally rolls on. Let's get Bob Bassani at the new York Stock Exchange for more. Hey, Bob, a Carl. You know, the win streak continues four straight months of gains with a surprising sector on top for April. Banks who would have thought, you know, it's rates to stay low loan growth has been anemic in the last couple of years. Thanks have dramatically under performed the five hundred the s&p is up. Twenty three percent of the last two years only six percent for the banks. This is just the last two years, but not this month. Thanks are up. Nine percent out me just about everything else including Tex up six percent communication services up. Six percent. Consumer discretionary is good. Healthcare's the big laggard is lily and Merthyr. Lagging a good turns about drug pricing healthcare providers like United health universal health. They're down on Medicare for all concerns. Earning surprises were the major reason the top companies outperform this month led by Disney up twenty three percent. Not a typo there. That's the best month for Disney since two thousand the same with United Reynolds. Greater news reports also up twenty three percent four was a surprise with terrific earnings as well. It's up almost twenty percent. Facebook surprised up sixteen percent J P Morgan even it's up. Fifteen percent. Separately Anadarko petroleum rallying sixty percent after the bidding war between Occidental and Chevron and Qualcomm up fifty one percent. You know, why April it settled that royalty dispute with apple? So we're at the halfway earnings point Carl up appoint seven percent for the S and P five hundred no earnings recession Carl as you called it bomb about Bassani. Thanks do. We like any of these names here, and what your top down look right now became what do you think overall market? Well, so in general, I think we're little extend under shorting on the trading aspect of it. But in general as long as a Federal Reserve wants to be easy money, and they're talking about potentially cutting rates. You have to be long stocks in some fashion, you can trade around. Maybe there's a pause coming. We'll talk about that. But I. I think as long as you have this environment. And you have a good GDP. You have global growth why not belong some stocks? Yes. I'd like to talk about energy per second. Because I think there's antidoto bid is something that's going to continue to ripple throughout the energy sector. And even though there's some awful stories like Ray, which was down almost ten percent today. If you look at the let's call them, the high quality N P names, e o g with us, ABC, etc. Relative to the current price of Brent, which by the way is one of the best charts in any market. You can look at right now these things are trading very cheap relative to an oil into an asset price and their companies that are being run differently. So again, the energy sector is underperformed still has short interest. That's near record highs. We've fundamentals that have gotten a lot better. I I would stay there. Real quick Disney to me is really gotten ahead of itself. Now ESPN was a problem. But we talked about it way back when is ninety nine dollar stock on this show legalized gambling. That was the lifeline. We had the conversation. Now, some thirty two percent later you wondering if all the news price in Disney better crush numbers on may six and I mean crush numbers, otherwise they're twenty one times next year. It's number. In my opinion, just way too rich Bank leadership. How is it right now? Well, thank you. I made it's been a long time coming every waiting for that for a while. I still think they have room to run to me of all this United rentals. I think is actually the most interesting it's up a lot. But by oh, none. I would absolutely be buying it right here. I think if we get an infrastructure deal. This meeting seem important to you today between the leaders and the president. I mean to be great. But it's the how do we pay for it meeting in three weeks that I think will probably be a little less who would which is another way of also if you add in how do we pay for it? How do you deal with a deficit that's getting almost absurd, but two trillion and stimulus at a time when we've got a fed meeting tomorrow where people expect zero out of this fed per longtime. We've got a payroll number on Friday, which to me seasonally is going to have the risk to very very big number and people are way off sides on any type of hawkish nece. So you throw in an infrastructure Bill, and I think you get to a place where the three percent economy that that you could have a lot more than anybody knows about. With the SNP record highs. And now more than seventeen percent for the year. Our next guest says don't chase the rally. Tony dwyer. Canaccord Genuity welcomes is here on set. Welcome. Tony good to have you go to seek. Oh, we should mention to fed decision. Tomorrow on a day today where the president says cut by full point and embarking QE four. Why is that not good for equities? You know? What's the best friend quickies, and we're expecting a little bit of a pause here. Which is why teased it the way? You did the stimulant of affect of the ten year note yield dropping from three and a quarter to two and a half. And having a restraining the two ten spread on the US. Treasury yield curve, I think that's way more important than what the fed is going to say tomorrow because the likely to really say nothing other than you know, the data's coming in skewed to the downside second quarter first quarter inventories GDP was skewed by inventory. This is all we've talked about it on the show bunch of times Karl this is all kind of a rhyme to nine hundred ninety five where nine hundred ninety four at the end of ninety four the fed doubled interest rates. And the GDP numbers were great because inventory was ballooning. The GDP numbers. The economy was starting to slow down housing autos consumption because you had this rate. Spike, very similar to what happened last year you came into nineteen ninety-five with the final rate hike in February on good data payroll numbers is TIMMY suggested and then by July just five months later. They actually cut rates with the market up almost twenty percent. And did it again in December up thirty four percent. You think that's why Chicago PM is ruling over purchasing managers beginning to feel that inventory bloat? Yeah. The whole bull store. Here isn't great data. It's positive but slower data you wanna keep the fed off the game that adultish low inflation doves dovish pivot by the fed restated in the curve, helping lending slow but positive growth equals better earnings, and you're getting a little bit of a multiple recapture from last year's decline. Tony what happens? Let's let's say the fed does some on the, oh, well, you know, me. Until you shut down credit. I'm going to be bullish there's time. So when if you remember at the end of December came on the show and one of the indicators used at the plasma was a fourteen weeks to cast it on the s&p five hundred. It was five it just never stays there. Now, it's ninety eight ninety nine tomorrow after apple doesn't stay there long either. I just think you've got to own them if they come in. I just there's times where you don't want to chase him aggressively on some of the names that the guys talked about. So let's say they come in a bit, and we get an even more dovish bed. They hint that they actually might take the president's suggestion and cut rates. What happens to the stock market knock? He goes bananas like people keep thinking slower growth. Everybody's going to be nervous the fed. No, something they've been wrong every cycle in their history. And we keep thinking, they know something, you know, what? No, something the markets know, something the bond market and the credit markets know, something we're the things that kind of is a pet peeve. For me is when with the bond yields down at two and a half percent of the ten year. People say the bus. Quote, unquote, telling us something really cause the high yield markets at a record on the Barclays high yield total return index define which bond market. We have strong risk on move. And we have that decline in the tenure and it brought a full percentage point decline in mortgage rates on thirty or fixed. Somehow. That's that's just not bad when you haven't shutdown credit. Tony the US dollar strength has been pretty unbelievable in the wake of everything. You just talked about it. What point do you think that becomes a headwind, if at all I guy I don't think it's going to be a head one. So if you look at a real strong dollar look at two thousand thirteen fourteen that's a strong doubt. This is trading around in a pretty narrow range after that two thousand fourteen move the dollar index is exactly word was almost exactly where it was at the end of two thousand fourteen. So you've had some, you know, up moves above it down most below you've created this trading ranch. It really isn't as dollars all always one of those things that's a negative because if it's a tailwind, well, it's just translation doesn't count. It's not orgasmic when it's a headwind, the dollars a head one. So it's one of those things that kinda discount you mentioned this ninety five template. We've been hearing the word ensure insurance in ninety five type framework does that make sense to you it? So if I'm in the fed, let's pretend I'm in the fed. I'm scared as hell that we've had the kind of stimulus we've had for ten years, and we can't even get to the two percent. They want as average there at one point eight percent on court. How are you going to get to an average of two percent? If you haven't changed your policy. So I think all of us would agree at the end of last year that made a policy mistake by raising rates. If you take back that policy mistake, all of a sudden, you've probably got a to ten spread on the yield curve somewhere around forty to fifty basis points. Exactly what happened in the middle of nineteen ninety-five. And again, the global economy had some great shoots pivot in the middle of ninety five the US economy reaccelerate from the middle of ninety five they cut rates in July of ninety five again in December of ninety five after thirty four percent move. And then again in early nineteen Ninety-six because they're scared of inflation. That's a bigger problem. When you can't get inflation where you need it. Then trying to stop it. Tony. Thanks. Thanks for having me. Your thoughts ahead of the decision tomorrow. The fence got some some. Sexual issues on inflation. They didn't maybe didn't have twenty because they're fighting windmills. I mean, the funding they can't they'll never get inflation where they want based on the way, they look, and I think in all the wrong, Don Quixote, raise we went to college in my head. Map in my head. I said you can do it in your hand. I watched my truth. I'm kidding. I think again, they're never gonna get the numbers they need because those numbers don't exist anymore inflations and all the wrong places. They just don't want admit it. And I don't think and I don't want to get done this rabbit hole gin. I actually think they were on the right track the fed and Octo ber. I think they're making a policy mistake now. But that's for another show. I think they are gone. They have absolutely left the building. It doesn't matter. What we print on GDP or or Latian they'll let it go above two. That's fine too. Just remember in June there, they are they're actively revamping their policy and in June. They're likely to come out with this new policy, or at least some framework for which may include inflation targeting, which means even let's even say they were able to target inflation, which we know they haven't been able to do. But even if they were you still probably wanna be long some stock. So you can beat long-term and play it low inflation in the long run. So even if it's at two or three percent, that's not Horb. Well, and if everything you guys in terms of the fed being missing an action, the dollar going weaker. An infrastructure Bill. You wanna buy Europe right now you wanna buy emerging markets. Because again, if the dollar is not your issue and the feds not issue. These are markets that have massively underperformed and arguably have better earnings profile and some of these other parts world, I realized China data has been awful. But actually, you've noted see this inflection higher. I think these are by the way European markets are breaking above two hundred days in there, actually breaking out there. We've been hearing that more and more is Europe the new long given some of the GDP numbers and even German CPI. I think list week surprised on the upside for more on the markets and what to buy a record. Highs headed trading nation dot CBC dot com. Still on fast checkout, apple surging after a big beat cook. Is speaking on the coal right now stock coming just a touch off the after the bell highs plus Facebook CEO Mark Zuckerberg, doubling down on his commitment to privacy at the company's developer's conference. Earlier today will that move the needle for the stock? Those details when fast money comes back. Welcome back to fast money. Facebook soaring. This year making a comeback after a year marred by those data and privacy scandals that hit the stock Mark Zuckerberg address. Those concerns on stage today pitching a whole new vision for privacy to redefine the social company. Julia Boston was at Facebook's annual developer conference in San Jose. And she's with us live. Julia. Well, Karl Marx. Ikea virg- says the future of Facebook is private and the encrypted end to end messaging and private messaging that they're focused on now end up being more valuable to the company in the long term. Then the more public forum of the newsfeed. Take a listen. I get that a lot of people aren't sure that we're serious about this. I know that we don't exactly have the strongest reputation on privacy right now to put it lightly. But I'm committed to doing this. Well. Zac. We're gonna bailing a redesigned Facebook app, featuring groups in stories from close friends Facebook showing new tools for brands to drive ecommerce including ads brands engage with consumers on messenger as well. As the ability for consumers to make purchases directly from Instagram craters on that app. The governor also showcasing its upcoming messenger. Redesign that is the centerpiece of the company's new focus on private messaging. Now, we're working towards making intending Crippen and reduced permanents the default across all conversations. And when we do this across both messenger, and what's up we're going to enable more than two billion people around the world to have their most personal conversations with each other privately without having to worry about hackers governments or even us being able to see what you're saying. Now face matures didn't move much on today's news. But last week they did gain over eight percent on earnings results. And also, Mark Zuckerberg reassuring investors that the shift in strategy to focus on privacy would not have any negative long-term effects over the long run and that they would be able to achieve their long term potential revenue goals. No Oetzi shares though, I have to say at shares did drop on today's news that Facebook is so focused on ecommerce and giving those tools to developers back over to you Carlos Nuno. Julia. Thank you very much. Let's try this Karen public private do. We know what this company believes in terms of social right now. But we believe they wanna make money. I really look that they are really committed to that. 'cause you know, so obviously they've had a very difficult year. But I don't think they are the sole poster child anymore for bad privacy behavior. So I think that is somewhat fading. I think them doing that the putting aside. The reserves for the FTC charge. That's good. They're asking for legislation. So they know how they can comply. So they so they're not always, you know in trouble. And I think also one other minor thing we have slack. Maybe that gives us a little bit of sense of what what's up what maybe what could that be worth? I don't know how the privacy ultimately plays out though. But I am long. I do think at this level. I mean that last quarter was phenomenal. Especially in light of Google's complete with yesterday. Can you compare it to win the got religion on mobile? Remember that? Yeah. Well, first of all, I think they're getting religion on on privacy is something they've had no choice. And I don't think they've they've led innovation there. I think they have obviously been following their tail and so it's one of the reasons why. And I've kind of been clear on this view. I think Facebook is not going to outperform the trip accused of the rest of its call even the social media space. But, but certainly the broader tech world as it hasn't for the last three years until we really under. What privacy means that this company? So I still think the jury's out. Even though there's no question that they're they're they're two point four or two point six billion daily actor users is ridiculous inside advantage. Well, there's there's a lot of competition in the messaging space in particularly. The prophecy message space that are giving it away for free telegram signal massive base there. So I am skeptical that Facebook will actually be able to pull this off. I'm also skeptical that they'll be able to make money off. It's their entire business is taking your data and selling it. Now, they may not actually sell the data. They'll sell ads against it. So they have to now turn this business and make it an e commerce business. Maybe they can do it. But that's not their core competency. So three percent of their address now is mobile. So there's not a lot left in in terms of that. But but it's remarkable nonetheless, right and headcount increased thirty six percent year over year. I mean, that's a significant number think that case point tremendous quarter Cairns, right, but how much is left. This was two hundred ten dollars give or take in July. Of last year. We obviously know where traded down to we're right back there. Again, you're going to have the mother double tops a single blowing through a lot of analysts upgraded it twenty and forty dollar price target. I don't see it in this environment. So I'm inclined to be telling people to take profits at these levels. I love your Facebook pitch. But I know my Pinterest. Ridiculous Pinterest by the women's only. Very well. I am on carline. His word. I saw on it. Maybe maybe another time check out some of our earnings movers. As we go to break. Apple and AMD's soaring. As conference calls are underway. Full team coverage, gene Munster, Josh Linton monitoring, apple we'll get you. The very latest win fast money comes back. Looking back the fast money conference. Call going on right now. Let's get back to Josh Lipton. Get details. Josh. Carl on the conference call apple CEO, Tim cook talking more about the iphone not just how it did in the quarter. But also the trends he seeing in the iphone franchise. Take a listen. For I phone while our worldwide revenue was down seventeen percent from a year ago declines were significantly smaller in the final weeks of the March quarter. Looking back at the past five months November. And December were the most challenging so this is an encouraging trend. We'd like to direction we're headed with iphone and our goal now is to pick up the pace. Now CFO Luca mastery. Car was also on the call going through some of the other segments. So my talking about services eleven point five billion up. Sixteen percent colon double digit growth that they saw in the app store Apple Pay among other segments. Mice racing services accounted for twenty percent of revenue in the quarter and one third of gross profit dollars. Yasser talked about wearables, they said a new March record for wearables, the wearables business actually, existing now the size of a fortunate two hundred company member apple, of course, juice to watch for years ago. My history saying the watch produce the best results ever for a non holiday quarter is for the cash position mystery saying they ended two hundred and twenty-five big in cash. It was a net cash position of one hundred thirteen billion. They were turned twenty seven billion to shareholders in the quarter. Of course, the board did authorize that additional seventy five billion for share repurchases. They raise their dividends seventy seven cents an increase of five percent. The outlaw. Look fifty two point five to fifty four point five billion. Remember the street? There was at fifty one point nine billion Carl back aren't Josh thanks so much. Let's get back to gene Munster, gene. What's the most important thing? You've heard so far tonight Kyle kind of buried in Cook's comments. He said that apple is tinkering with different installment plants, and I want to try to decode what that means. Is that this I phone upgrade program? That's had some success about buying your phone on a subscription basis. The hardware piece. It sounds like that they're tinkering with maybe extending that to other products. I don't expect any announcements in the next quarter to but I think that the medically longer term. This is really important for the stock. And the reason is that if apple does in fact, start selling products more holistically, this is a one stop shop more like a consumer Staples type of a company in your binding on a monthly basis that inevitably would be higher multiple for investors. So's very much encouraged by that little nugget that Tim cook gave us. All right. You want to grade the quarter in your view, gene? Yeah. Carlson a minus. And specifically is I think that what they're doing in terms of cash by back, and this the strength of this earnings is largely a misunderstood. I suspect a lot of analysts tomorrow, we're going to bump up their price targets, but I want to impress upon people that this could be a much bigger company. You know, we talked about that three hundred and fifty dollar if you put kind of a a low twenty s Coca-Cola multiple on this gets you to three hundred and fifty dollars stock our Jeanne, a minus Tim was that. John professor monster has done a phenomenal job this week grading the full spectrum of of students. You know, frankly, I think on apple I think the call here's really that. This is a capital market story that no matter what you think is going on with phones it's going to continue to be a a major support. Gene told us this is twenty five percent upside in the stock alone. So again, I think this was an exciting day for apple even though we expected nothing major. But that twenty five percent is over the next three years. That's what jeans looking for right? So let's talk about tomorrow morning. We've got something. We've got an eight minus quarter, which I would probably agree with Jean. We've got a stock. That's bumped up against resistance now. And we've got most of the stuff priced in. So there's nothing in this conference. Call nothing that I've heard so far that changes my mind, I still think you take profits bottom. What was your worst grading college? Any might a sip course. I mean, a might is the worst genes been a pretty fair greater, I think that's a solid eight quarter the women. I don't know what else to do what I do. And they need to do. Tim Seymour to get an from Jean Moonstone. I think maybe we need to see north at twenty on services. I think the I think the guidance on China would have been something even though it was better Cordova quarter sequentially, and again, they're non-compatible quarters on some level. But I do think that getting China back in line is a place where people need to see for this company to give it that Ness boost. Can we say they're back on offense? And anyway care. Yeah. I think that's fair to say they did talk about some other things wearables. Yeah. All that invitation though, I'm just doing nothing tomorrow. Nothing. Isn't it also fair to say that that apple swings the pendulum in terms of being people being over a billion to being on the other side of it? I don't think we're even at that overly billion. Yeah. And do the math in your head. Checkout Advanced Micro jumping after a big earnings beat stocks now up nearly sixty percent this year. Do not miss an exclusive with Lisa sue on mad money tomorrow night at six PM eastern. We're the NASDAQ and Times Square still much more fast money ahead. Welcome back to fast money GE rallying today after beating earnings and affirming guidance for the year some traders still betting the rally will be short lived though, mycosis ever Cisco with the options action might. Yes. Oh, gee, saw about two times the average daily options volume today, and that actually made it the second most active single stock option after apple in terms of contract comedies, despite what was widely viewed to be a better than expected result. The most active options were actually the junine puts over thirty six thousand of those traded and total today that included a purchase of thirty three thousand six hundred of those for nineteen cents. So somebody's making a bearish bet that this relief rally that we've seen in GE might be over within the next seven weeks or so and that the stock could see a decline of about thirteen percent from the levels where it closed today. Mike. Thank you very much. Tim g one of your draft picks. It was one of my draft picks once again, and the number one pick and tell you there's a lot of pressure and people were bullied me out of the arena. But here's why g a good pick for a stock draft on CNBC's. Power lunch is one of the great events and financial TV because this is a ballot. She cleanup story. This is also essentially something. A company that to me is not playing it for PS you're playing at some of the parts, but it's a clean up. Again. Today's free cash flow outflow one point three billion versus four point three expected that to me is what this is all about folks. And I stay long it's a long season, though, Carlin. Unfortunately, I be in first place on day. Four doesn't do me. Now, hold on real quick might push back that day of the stock members G E would have been there at eleven. You didn't have to take it number one would've felt he. How I happen to know that I spoke to I think would be a sound ladies who snaked me out of pigs Heffer year might have been. Call this. So I maybe she didn't progress. But here's the important thing. Investors are actually starting to buy into the story. We had we've had this turnaround story for a long time. Investors didn't buy into it. So I think that's the big difference here. I actually I'm what Tim on this. But I think he can hold this. I think favor with the garden out at the Milken institute today and said he says you can sort of feel we're starting to get our sea legs. Again, I think Tim is pointed so turbocharged, I believe so if it starts working great the work a lot or they could go to zero, but that would be good if they could get a little positive moment for more options action. Check out the full show Friday. Of course, five thirty PM eastern time up next some final traits. It is time for the final trae. Let's go around the horn, Tim. Let's continue our Jeanne really quickly. Don't look at PS because it's not essentially evaluation stories about cheap cleanup story GE long being K broaden that out a bit. If you want you want a week, are you on a fed a dovish bet easy for me to set you by X ally care. Yes. Retail's been tough, but target I know it's been down in the in the face of Amazon one day delivery. But I still believe that it's cheap, and they are doing good job to have your Q three times. Help punch show McKesson very bad over the last couple of months seems to be turning you'd get long into their may eighth earnings release guys. Thanks for having me. Great. Does it for us mad money with Jim Cramer begins right now. Hi, my name is Danny Rothen starting April. First I'll be talking with a new guest every day about at least one cartoon, and we're calling it Sifi wires everyday animation. Remember life is hard. Watch a cartoon and you'll feel better.

apple Facebook China Carl Kingston gene Munster Federal Reserve Tim cook United States Brian Briggs Tim Tony Dwyer president CNBC CNBC Google CEO Disney
Fast Money 03/09/20

CNBC's Fast Money

59:56 min | 1 year ago

Fast Money 03/09/20

"At fidelity value is automatic. Starting with the rate you can get on your cash when you open a new retail brokerage account learn more at fidelity dot com slash trading fidelity brokerage services member. Nyse ALRIGHT EVERYBODY. Walk up you fast money. I am Brian Sullivan and your traders on this very important night tonight are Tim Seymour. Steve Grasso Karen Firemen and guy. All right we're GONNA get to that in just a second meantime a record day on Wall Street and for many a day to forget all three major averages plunging more than seven percent the Dow the biggest loser falling two thousand thirteen points that is not a misquote but is the largest drop ever and one of the top ten biggest declines on a percentage basis ever the transports crushed falling nearly ten percent their worst day all the way back in September of two thousand and one on nine eleven. Obviously you don't need to remind you what happened debt. Today's losses fuelled by that occurred crash that we discussed the energy sector having its Worst Date Ever as Well Oiled Lucy. Roughly a quarter of its value crude now trading just below thirty one dollars a barrel mini oil and gas stocks down thirty and forty percent today the market assess simply many of these companies ability to survive in lower oil price world and one more incredible stat for you on this incredible interest rates continue to collapse the yield on the ten year. Treasury note hitting a new low of nearly point three zero point three percent following yesterday's sell off today sell off S. and P. Five hundred stocks have lost a total of five point seven trillion and market cap. Just since the record high on February first. There is your setup. It was by any measure and historic day guy. I know you're on power lunch as well. Welcome everybody on this big day. We are commercial free by the way through the entire hour and this night guy where we don't need to really get complicated. It's a question of what happened. And what do we do now? Do you really believe that the drop in oil is what triggered this market today. It's obviously a big part of you. Can't discount the fact that when crude moves to the extent that it moved given the moves that already seen at obviously had a lot to do with it stoked fears as well but again a lot of this has been in place for quite some time. You know fun fun rates. The bond market shouldn't move like it's moved over the last year and a half and I'm not saying that today we've been saying that for quite some time. The volatility in the bond market was striking. Nobody really talked about it. Because aside equities if we had that kind of if we had had that kind have kind of equity volatility. It'll be front page news every day currencies the same thing. Tim Speaks that all the time. Now it's finding its way into the equity market. After long long period of time I happen to think as painful as is. This is really a good thing. The market needs this. I'm not suggesting it's over. I think you'd know when it's over. And this is just my opinion when you see some big either Hedge Fund or derivatives book or some sort of bank with relatives relatives options plays when they blow up. When that happens. We're close. It hasn't happened yet. I saw some data today. Tim that in some ways average volume was higher than during the peak of the two thousand and eight collapse. Action was fast and it was violent dollar volume certainly would be based upon the levels were at market but the velocity of this pick your asset class every single one so to the intra-day low on the SNP. We were we. Were down about one thousand nine percent. Twelve days Guy Mentioned The reference to the dollar being down About five point two percent in twelve days the yen strengthening which we all know is kind of this unwind of carry trades. That's part of the dollars move by the way And without getting lost in that those are the yen move is a massive risk off mood. That's almost ten percent move in the end in twelve days. So look there's different fires going on around the world in different asset classes. Frankly and I think will over the weekend. Was the latest lack swan in the middle of you. Know what might be a group of foul. There is a credit dynamic that is emerging out of the energy space that we all knew was there. And if you talk to creditors in in energy and in high yield they'll tell you that actually you know where they're seeing the market right now is inside of the lows of twenty eight December and likely nearing the lows on spreads right now at two thousand fifteen and we'll get to more and energy with Mike Bradley. T H one of the best about the best in the business. But Stephen I want to start off with you. And we had a circuit. Breaker hit fell seven percent. It was three minutes after the open and the S. and P. Five hundred. Stop for fifteen minutes. What was that like? You're on the floor hockey. It's not every day you deal with a circuit breaker and times in twenty years or something like three times and when you have a telegraph where last night. We're limit down the futures. That was a big deal and everyone was waiting for us to drop to the next level which was down thirteen percent so I think we're starting to see shades of panic but I'd rather have this panic in the oil market than in the financial markets in the banks if that makes any sense. Did we have that today? A little bit you had you had to put. There's not a balance sheet havoc. There's a stock price panic and I think those two things are completely different. Yeah because I think we have a graphic on this Goldman Sachs. Put out a note late today that I got. And it's basically energies exposure to the banks and it's small. I think Citi Group was the highest at about forty percent. You've got bank of America about two percents so on an absolute basis Karen. We're talking about a fairly small balance sheet so I don't think that's going on today. I mean the market was down so of course everything would be down. I don't think it was oil. I think it was more this idea of rates. Of course always you know is difficult for the banks but this idea of a recession and credit quality. And what does that mean if we have a slowdown? What does that mean to their entire book of lending forget oil the rest of their lending. If you look Bankamerica I think the hardest hit. They have a very big consumer book. So that's what I think. Aside from the market aside from rates aside from oil which really is is the last one The smallest element of the move. Because take us into that. Because I think this is a really important point to make because it's not just about the move today. It's about what happens going forward. There's the data city grew three point two percent of their orderbook according to Goldman Sachs Wells Fargo one and a half percent. Those are small numbers relatively. But we're still talking fifteen and sixteen billion dollars in the case of Citigroup or maybe J. P. Morgan Chase and so is the idea. Karen what you're talking about. If those things start to suffer the chance of them they'll give businesses giving you a mortgage all that stuff starts to shrink a bit not because of the oil exposure. I don't think because of the rest of the book is so much bigger that you know if you're going to have businesses that are really starting to have trouble. That's no J. P. Morgan WanNa be you know. They want to be a good partner but at some point you don't want to extend credit that you don't think you're going to get back. So that's what I think was weighing a lot plus rates and then the market that today was the big fear day right. I mean everyone felt afraid yet. So much of that setup last night when you're when you're watching futures futures limit down and then when you hear governor Cuomo though I think he put it in perspective rather well when he said we're battling more fear than the virus and I think we're not we're not scientists we're not MD's but to me it seems like the market trying to factor all of this in and I don't know where the chips finally fall but it seems a little overdone to get listens to Steve. Fine but we just had you heard Wilfred Sarah say that the the Prime Minister Italy trying to shut down the entire nation right. I think the biggest economy right zero so let me just real quick so I think what is saying though too is that countries are trying to outdo each other with what they're shutting down same thing with s and p five hundred companies. They're shutting down visitors they're shutting down cafeterias and if you don't shut down you seem like you're being cavalier in. God forbid something happens in your blamed for it. Yeah so I think you know race to shutdown. That's the world fair enough but that's not for us to judge here. Our job here is to analyze the economic backdrop guide on me and say if we see a significant reduction in travel driving commuting to work in economic slowdown. We have no idea what growth rates are going to be if we have growth and what corporate earnings are going to be. And maybe this is a stock market. That reflected the idea that simply. They don't know anything. Yeah here what? Steve is saying one hundred percent and we have a lot of time that which is good. I mean I think the corona virus a lot of people say it's the 'cause that's fine everybody's entitled I think it's just was sort of the final match on what has been a tinder box and that set it off with that said the S. and P. Five hundred. I think today's closes down one thousand nine hundred or so percent from the recent all time high. It's a pretty big number. People will say the markets cheaper. Now that might be true. I push back and say I can make an argument and I'm not again. I don't know this but I can make an argument. That stocks might actually be more expensive today than they weren't the altar know any of the Moat House. Can you possibly now say this quickly? Seventy-three percent seventy three percent of this economy is driven by people. Buying things going places. People are not going places. Listen I WANNA GO TO MY CONFERENCE IN CHICAGO. At the end of the month. It got canceled. That's real that's happening so I don't think we can sit here and say I don't think he was trying to do. But we have no idea what's going to happen. Earnings and 165 166 which is where we were last year. And where consensus consensus is. I mean I think we're lucky if and I'll leave it ultimately to the strategies that are making a call SNP earnings but you can't tell me We're going to grow three or four percent and revised downward I mean we're we're talking about major contracts. The contract yes. I do think we contract. And that's that's even in the construct that we're in now so we're talking about the lack of uncertainty about the duration of this the other thing I bet the market and I think we're all saying this would is notable to me though despite. What's implied Corona virus here is? I don't think today's move in. The markets felt very corona virus. At all we were really talking about. The virus were talking about politicians around the world. Yes Italy took northern Italy and basically quarantined and Yes New York. State and other states are doing dramatic. Schools are closing but but the markets move was set in motion by OPEC and Saudi basically playing Russian Roulette. And I think Putin's gotten ability to play this game longer than the Saudis do and this is the construct in which the markets came in to today. And then it's the credit and then it's the dynamic that we're all talking about different asset classes. Yes of course but what was interesting to me about today as we get deeper into newsflow on Corona's the market wasn't trading on Corona's to me it just wasn't are let's talk more about today's big selloff and more importantly what now. What do we do joining the? Cd's line is Tony. Dwyer chief market strategist at Canaccord genuity. Tony was today the bottom well. I think it's it's really close to at least a bottom Brian. I think capitalized on a little bit of what Tim he said. The yen smooth today was extraordinary. So if you look at the ten day rate of change on the on the US dollar yen relationship it's worse than it matches the worst of weight and right. It'd happened on actually October. Twenty seventh of two thousand and eight and obviously that wasn't the low the low. It was an Ala. You actually had a significant rally off of that level. So as as I wrote last night The market is set up because of how wild the movement is in the various asset classes. I could look at the VIX. The ten week ready to change their matches the worst of weight again not the low but EHLO. Same thing with ten year yield ten week. Great Change most excessive in history by a long shot and of course yes and pay so you know there is there has been a significant drop but it also isn't historically unique. Connect the dots between what happened in the yet. I mean people tuning in fast money. We're talking about the stock market but here we are talking about the yen twice in seven minutes. What does the yen in telling us? What what does that mean it? It's just a flight to IT'S A. It's a risk off trade so think about the sentiment when we downgraded on the show. We downgraded the market on January twentieth. We have yet to upgrade it because of all the issues that the that the folks on the desk of talked about but think back then the sentiment was so positive there was no currency real currency issues. Vicks was as low as it's ever been the ten year no you'll just kinda grinding lower in the SNP was making a new high by about a half a percent every single day and sentiment was just far too extreme. That's one of the reasons we downgraded look just thinking last week people were thinking the market was gonna correct but they weren't bearish. The movement into these issues suggests that now. They're they're getting bearish. Let me. Just give you the data Celeste. Last week investors intelligence had forty one percent bulls which is down pretty significantly from where it was over prior weeks at the new high. But they're only twenty percent bears. They're only so there's still last week twice as many bowls as bears in two thousand eleven. It was forty five percent bears. Two Thousand Sixteen Forty and two thousand eighteen thirty five so I think this kind of flushing it to the point where you're going to get this. Wicked reflects them. Redo that questionnaire and bull bear today right now Steve. Grasso jump in here so so Tony when you look at this get airlines. They get the pressure there and get the pressure on hotels. I get the pressure all around it. But we'RE GONNA make up for it in other segments of the economy. What do you think earnings are going to be? Because the market is a forward-looking price mechanism. What say you on that learning clearly? I've been below the street for the entire year. I'm at one seventy two. I think the streets at one. Seventy four seventy five for this year. I think I'm going to be too high but it's really this. I'd love to make it a fundamental issue in credit as always a fundamental issue but this is a human nature situation. And that's how you you create tops on human nature and you create intermediate-term bottoms on human nature and then the fundamental shake themselves out so to put the fundamentals into the intermediate term bottoming process. Human Nature gives you the worst. We got that we're down in nineteen percent that kind of oversold condition and asset class volatility creates what is typically a of a vicious multi. Week reflects rally. This is kind of been our playbook for the last couple of weeks that reflects rally ultimately fails historically because you start to get that negative economic data negative corporate earnings revision data and it's at that demoralizing test of the lows. That you WANNA throw offense aggressively back on the field. So that's playbook. Hey Tony a quick question just in terms of the other sectors that we talked about transport's retail if you take this back in the x t isn't a perfect measure but it is certainly one measure of retail. You're back to April twenty thirteen if you drew a line. Is there any part of this? That you think is is getting you know. This is different way asking the same question. But but there's certain things that had been beaten and they were beaten coming into. This is this capitulation moment. I think it is to me and I think it is also for banks. I mean look the retailers. The banks The socks all the of the semi's. The Philadelphia Semiconductor Index. All of these areas are I mean the the Kyw Bank Stock Index. The becak now thirty five percent since late February. Not SINCE LIKE YEARS. Ago So what? This is what unfortunately severe washes look like and and just kind of to put it into a context. Tim So we can try and get in in what it could look like over coming days in two thousand eleven we had an eighteen percent. Drop over just a very few days. People forget about that. That was when Greece was gonNA fail an eighteen percent. Drop in a straight line over a few days. My friend Walter. Deamer give some context on that on how volatile it got then after that that happened in August after that you had seventy. I'm sorry you had seven ninety percent upside days or consecutive eighty percent upside as in other words all of the volume was up. You also had nine more ninety percent downside days in between that wash lower in August of eighteen percent and the final low in early October which was down nineteen point. Four so for setup for a ramp could be in the retailers. The banks semi's all those areas that nobody in the right mind wants to touch right now but then you get that demoralizing cast of the low and it's there that that our game plan is to get more offensive because Tony not yet on the macro market. The advice to the viewers do not get aggressive yet. Correct list depends. Okay so this is I mean we gotta move on. Yes or no no. I'd wait until the test from an investment standpoint. Tony Dwyer Canaccord genuity. Tony appreciate that. We are commercial free but we still got lots stacked in here. Guide down me when I look at the few things that were higher today. Auto parts were dollar tree. You know what you know. What tends to move up when things slowdown in the economy or recessionary those types of companies in your mind when the data comes out and sort of. I asked him this in a backward way as well. Are we in right now? A research will we go into? Recession at fidelity value is automatic. Starting with the rate you can get on your cash when you open a new retail brokerage account learn more at fidelity dot com slash trading fidelity brokerage services member. Nyse SIPC well. Now I know we have a lot of time. What causes a recession? So in my world Mike Crazy World. A stock market selloff causes a recession. Why because people get spooked? They stop spending money down. Nineteen percent with this corona virus. People are absolutely spooked. So we there yet. No we're on the cusp of one. Absolutely you know. I don't think a recession causes. Stock Market's off. I'm probably the wrong person to ask but I'll say this quickly again. I'm with Timana Corona virus. Go back and look in September. When this whole fed overnight repo things started. We talked about it on this show. Nobody ever heard the word. Term Corona virus back then yields. Were falling precipitously back. Then not like. They are now gold. Who's going higher back then? So all the warning signs were there. We tried to point out. It fell enlarge part on deaf ears because the market went up every single day quickly to me. The the absolute breaking point for me personally was over that weekend when apple said you know what things in China bad you know. We're we're not gonNA meet our numbers. The stock was at an all time high on Friday trip down six dollars. Next date nothing. The following day was making an all time high. You'd think that made any sense whatsoever so as crazy as you think this might be. I would say that was equally nuts. Well if you think about something like a Wal Mart which which was up eked out a heroic gain today and certainly has been trading. You know very much close to all time highs and yeah I get The panic buying the stocking the pulling forward but my view on Walmart is. This was an expensive stock three weeks ago. it's only a much more expensive stock relative to the market now. We haven't even gotten into a place. We Friday we all universally shrugged off a nonfarm payroll that had two hundred and seventy five thousand jobs added three point five unemployment rate because everybody said that may be the last number. You're going to see like it. Ultimately in Walmart to me is one of the great you know conduits of some of that that job market being so healthy and one that would certainly be the first to suffer from it. I think you have to be very careful about chasing these stocks that have been defensive because of the environment related to corona virus that has made their business model in the short run. Seem very interesting when in fact they're very reliant on the consumer and the multiple on the stock is well past its five-year average. In fact it's about twenty five percent expensive to its five-year average. I just WANNA talk about the auto parts space for minute. Which I thought was really interesting. I know exactly why I don't know if it's because people think people aren't going to buy new cars. They're going to hang onto their cars longer and it could be gas. Prices are going to plummet. People will drive more. Maybe they're not flying. They'll drive not really sure but also maybe their their supply chain is better than some other industries was just it? It is interesting to me that that space which is very consumer driven did seem to have a pretty decent day. I don't know how the rest of your gauging this on I go on the CDC website. And I look last week or a week in half goes. Sixteen hundred people died from the flu. Eighty thousand died from the flu a couple of years back now. I'm not belittling any of the deaths. But I do think that. This is an overreaction because we have no idea where this going to go I do agree with guy. The market wanted to sell off. Wanted TO CELEBRATE IMPEACHMENT. Tarasov and everything. I think I'm saying the same thing I mean I. I don't think the market was really pulling back on Corona today and and ultimately the question is really I asked this question. I posed this on Friday. Where is the move proportionate to a change in fundamentals and the question then the other question you ask is where we're fundamentals and we're fundamentals at twenty at sorry at at at thirty three eighty nine and the S&P were they in the right spot? I think we can. Well I would argue and I think there was a lot of folks looking at prices. Sales Ebitda price to earnings and able to draw comparisons to times when the market's been very bubblicious not all stocks. But again I think. Part of this is where we came from. That's why the velocity of this move is so extraordinary. Can I just had one more thing? I think Corona virus actually had a fair amount to do it today for a somewhat of a different reason. New York is starting to feel the effects of maybe corona virus. Put the reaction to. What do we do zoo? York is the psychological center of the financial markets in the US right and I cannot help but think that people involved with financial services industry now feel this is coming to their doorstep and it feels so much more. Dangerous Than Hotel overreaction. I don't know if it's over and yet maybe it's working from home or they're split into teams. Call Call into work today. You go into work tomorrow. You guys never sent me trading desks that everybody's doing our audience leading the trading desks just to keep fifty percent of the people healthy. But when I look at where you're spending the money yes the cruise lines. Yes the hotels yes the airlines those going to be impacted but there's gotta be an overflow that goes into other sectors that somewhat makes up for it because people are not stopping spending completely. We'll get to that a second because basically some government agency saying maybe reconsider taking a cruise all right so that made your dropping oil fueling the massive selloff today or at least they'd be contributor crude down twenty five percent biggest one day drop since nineteen ninety-one the energy stocks. They got obliterated. I don't know if that's too strong of a word. Probably NOT OCCIDENTAL PETROLEUM. Losing fifty two percent of its value today Patchy diamondback marathon oil losing forty plus percent. You name it. Let's bring in Mike. Bradley of Tudor Pickering. And hold. He's been on the front lines of this. We've been talking for about two years on this on this debt. Issue out there Mike so tough data have gone but we certainly appreciate it you know and does did the market deserve a terrible word. I guess did the market. Should the market have sold off the way that it did? Occidental deserve to lose fifty two percent of its value. Today I mean look I think the biggest issue. Today's market was now only crude oil prices but the debt markets really came apart today. You're seeing some really high forty. Emp names where the debt was par two days ago and now is trading at sixty seventy cents a I think that was a big driver. Illiquidity and debt markets really took some of these equities down and anybody that has any leverage on the system in anything that's questionable is just got destroyed today and so that was the main driver. It's probably been you know if feels very much like q one is sixteen when we saw high yield books blow up in debt. Really fall out of bed. That's what today felt like. It felt like a lot of illiquidity and it felt like it was less about crude oil and more about just fundamentals financials and Deford these guys. Do you think we asked this on a macro market level Mike. I'll just focus on the energy stocks. You feel like today was the Washout we. Nobody seems to have agreed is for the macro market but for the energy stocks was today the worst. It gets it was pretty bad. Look I mean we're we got so many singers so technically oversold here but the one thing we would say is that we did not see a lot of guys stepping up to these names today. I think what people are looking at is okay. Is this going to be a two or three months issue with OPEC and with Krona viruses? It's GonNa turn into a twelve eighteen year type event and I just don't think a lot of people right now are falling either way at this point in time so I think it was warranted. Probably is probably oversold today. But I just don't see really many buyers coming into these stocks at this point in time. Hey Mike it's again. Thank you for joining us. crazy markets What does it take to be a hero in terms of doing the balance sheet work and assessing some of these first lien loans or and again our viewers aren't trading in this stuff but you are And at some point valuations matter and things get kind of credit credit can be qualitative. It's also a numbers game. What what what do you need to see? We just don't see a lot of people buying stocks yet on valuation. It really is certainty and you saw today. You know a couple of these came out. They cut spending the pretty aggressively. And you're going to see him a couple of these. Emt's you're just not gonNA grow next year and factor probably in decline. You know I think that's what people are wanting to see. They're delivering it in those stocks. Outperform you're going to see a massive amount of you know announcements over the next. Probably two weeks you're going to see production and you're GONNA see caps coming down probably thirty to thirty five forty percent and you're GONNA see production next year is going to be declining in the. Us shouldn't be the first time we've seen this probably four or five years. I think that's what market participants want to see. They want to see a healthy market. It's getting washed out. Valuation will matter at some point. But we've got to get the corona virus uncertain and we got the the uncertainty on OPEC. What they're doing right now aren't gonNA take this well. We know what they're doing. Which is they're fighting. And they've all retreated in every country for itself and every company in America for itself. Oh if we guys up a ten year charter the EXO PD oil and gas services. Each year because I want to focus this Mike. I mean the ex-soap which widely traded ETF it's down eighty nine percent from its highs of just a couple of years ago eighty nine percent in other words. The market is predicting that many of these companies. And I don't think this is hyperbole or some sort of fear. Mongering statement are going to go out of business. Is it that bad? Yeah your pregnancy. Fifteen or twenty percent of the companies will probably go out of business. But I think what's going on right now is that it is uncertainty and people were scared. What are we hearing from clients right now? Everybody wants to see these. The companies on a thirty five dollar strip you know for into infinity. You don't usually see that at top. You see that at bottoms and so now when you say you know you start down thirty five dollars flat for two or three years. You know the valuations. Don't look good. We don't think oil's going to be a thirty five dollars a year from now. We think it's going to be higher. And so yeah. We probably are probably seven or eight any of this. It doesn't mean it can't get worse but you know we're seeing some good values we're telling people to stay in the high quality names. That hasn't really worked up to this point in time because everything's getting thrown out of discriminating but Yeah I think the industry is going to be healthier here in the next twelve eighteen month and I do think that's going to be enough to bring generalist back to the group. Generals did not want to get in this group simply because companies were just spinning wildly. They weren't generating returns. They're going to be generating better returns in one. Oil goes back to forty five or fifty. The returns on capital are going to be an pretty pretty significant one. Quick final question before we let you go. I know we gotta get the BOP assigning just a second here. Here's here's my question. Hedging a lot of people come in day saying. You're not counting the hedges. The market overreacted. The hedge books I get it for this year a lot of them. Wpa and others done. Well what about next year? The data shows that hardly anybody is hedged at any limit for next year. We lost Mike Bradley. Or You did like the question Michael Bradley. You can hear me a good laugh. Their much-needed on Monday night. All right so we'll get more on oil and OPEC in just a second but we are coming up here. It's five thirty right now. Split DOWN The middle. If you're just joining us out their list of people are stuck at home or they're working hard all day they're not just sitting there watching the markets all day like we are so. Let's go down to BOP assigning to talk about the day. That was an Bob. You've been down at the NYSE NOW. For How long. You're not trying to day yourself. But how long have you been down there for us? Twenty three years. I've been the floor reporter at the New York Stock Exchange. And you don't see days like this very often. Brian Thank Heavens it was it double whammy. That's the problem. The inability to figure out the economic impact of Corona virus on corporate earnings. Well that's bad enough. We had to deal with that. Then you throw in a sudden price war between the Russians and the Saudis on oil and you have the makings of a very ugly day in a particularly ugly open. That's what I concentrate on here. Within three minutes of the market open at nine thirty three am eastern time. The stocks were halted what system-wide due to circuit breakers that kicked in when the SNP dropped seven percent that triggered a fifteen minute trading halt. This was the first time that the modern circuit breakers had kicked in. And it did. Its job. Basically jobless to pause the market create liquidity stocks then rose when the market real fifteen minutes later but the damage was done. We ended right near the lows for the day energy stocks in particular clobbered. Exxon down twelve percent. That's the lowest close since two thousand four for Exxon. If there is a poster child for the woes for Energy Halliburton three trading halts one for the S&P five hundred nine thirty three and then to individual trading halts at ten. Am and ten twenty two. You See Halliburton closing down about thirty. Seven percent other economically sensitive groups also got hit hard particularly banks and industrials J. P. Morgan down thirteen percent or so. That was the worst decline since the financial crisis in March. Two thousand nine on a single day. Industrials like Boeing Caterpillar. United Technologies all down nine to thirteen percent. This wasn't though complete bloodbath. We finally saw some differentiation in the marketplace. Some stuff held up a little bit better than others. Generally they were consumer names and not just Walmart. What was the only stock that was up for most of the day? Not at the close but most of the day defensive names Pfizer United Health down but outperformed the broader market same with proctor and gamble. Same with Johnson and Johnson. Same with Pfizer. All down three to four percent horrible days but far outperformed the broader market down seven point six percent. Only good news here. Today is the circuit. Breaker did serve to halt the horrible sentiment of the open and the reopening things were a lot calmer and the vicks in fact did drop after we reopened although still very very elevated. Brian back to you know Bob. We are glad that you are down there. Twenty three years of historical knowledge and wisdom and dealing with this. Never flustered Bob Bassani. I WanNa Tim what you lived in Russia. I want to ask you a question about OPEC because if oil help drive us down okay. Here's the thinking and I wrote about it this week. By the way I think could still up on. Cbc Dot Com the Russians extensively wanted to punch US shale in the face because trump put sanctions on Rosneft. Rosneft is the big Russian companies. Run by your such an who is Putin's former employees and extensively best friend. Well trump didn't put sanctions on Russia. I mean those were legacy sanctions on Nordstream. Put this if the two can talk. You think there's any chance that there's anything we can do back channel to get Russia back to the table with the Saudis and get the OPEC deal done which stabilize oil and bus the mark yes but ultimately you have to ask what what is Russia's negotiating tactic. And what are they trying to achieve and you know my view having spent a. Lotta time in Russia is first of all I can just tell you that the the oil and gas industry gets more profitable as the ruble devalued and we get in crisis moments because actually the the oil prices are higher levels of taxation at higher levels of oil but more importantly they are a they have local ruble based costs which actually get cheaper when the ruble devalued and their dollar exporters. So they're much more profitable in this kind of an environment. So Russia doesn't mind this environment they also have a budget which fiscally breaks even at forty three dollars a barrel Saudis at eighty five a barrel. So who's got more pain on the budget side and Saudis been very clear about their move away from well and they're twenty thirty and the chaos in Saudi Arabia. Right now that we're also hearing anecdotally. I think is something that Putin seizing this helps. Putin's negotiate in the Middle East. Putin's got a game plan. He's got a game plan of helping Venezuela other wounded OPEC players. This is part of the whole tactic and I don't think Putin needs to rush to the table here. Frankly that's just a view and therefore it's a view I have this volatility doesn't serve anybody but US shale is free cash flow positive above fifty and Putin knows that it. What's interesting is I thought we wanted. Lower oil prices. I thought we wanted lower rates. I thought we wanted a lower dollar. Now you get everything you want and look what's happening to the market sort of be careful what you wish for things. So I'm SORTA with Tim on this thing. I don't see any compelling reason for anybody to go to the table it is war. It's it's economic warfare and it pains me to say it right right now. We appear to be losing forty. Two long term support is where I've been saying for a couple of weeks. Slash Muncie area. I never expected it to break down this precipitously but once you break down you get below thirty dollars. Then you're at a world of hurt you look at that twenty six fifty five level so I don't. I do still think that people for the most part want lower oil. They don't want it for this reason. But ultimately a bunch of companies are going to go out of business. It's going to be survival of the fittest if anyone's left and then we'll recoup yeah really grow but until that. I think you're going to see lower for longer again. You heard Mike Bradley. Fifteen to twenty percents equities could be gone away by the way. Many of them are down ninety nine percent. I mean literally that's the number or the market crashing through several key technical levels in today's brutal selloff. Is there any support anywhere there? Macara's Carter worth over at the plasma any support. Any work harder up in his hands together. We just pick pick you levels. But let's let's first talk about the concept of bear market now you know. Headlines are focused on the twenty percent and really no one knows where that came from. But let's let's use that if the Russell three thousands of broadus investment Agri have covering essentially entire investible universe which is obviously the SB five hundred plus the next twenty five hundred stocks. This are the numbers. Two thousand four hundred sixty seven eighty-three percent already down twenty. So is that a bear. Or how about down twenty-five seventy two percent of the constituents are down twenty five or let's go further. How about thirty sixty percent of the constituents in the largest agate we have already down thirty. It's a bear market and call it what you want. We know what it is and it's presumptively not over. Where can it go? It's anybody's guess. But let's look at some lines so actually Same same deck here for the SNP and this is the point right twenty percent. I mean sixty sixty percent more than half or down twenty-five so we have a few big marquee names are holding up as if as they succumb. We know what happens so in terms of levels? Here's the long term chart. This is the financial crisis. Low the sixth of March. Two thousand nine this is. Us debt downgrade in two thousand eleven. Right here the two thousand sixteen industrial earnings version right here the plunge low of December. And so where we simply to come down to trend which is twenty five hundred. That's another seven percent perfectly reasonable but the real question is could we get to the December lows I mean. Could we give back this entire ricochet of the past year? We know the SNP is not it but the transports have already taken out the the bank index already taken out the low the Russell. Two thousand the energy. So let's look at each of those and then let's quit the SNP were to get down to its ricochet low of Christmas. Two thousand would be another fifteen percent. The Russell Two thousand on the other hand would be a mere four just four. That can happen tomorrow at nine thirty to happen next week. But the point is that's a foregone conclusion and then here's the real issue. Look at some of these other aggregates what we have in the transport. The transports have already taken out there. Christmas low and the key here is they never could make a high never confirming what the SNP was doing and finally take a look at the bank index never confirming the SNP's new high and has taken out the low. None of this is good and sure you can get bounces along the way but bear market a lot of problems and let the dust settle before getting really excited about buying it. We'll see if the dust does settle. Come on over. I mean so care. Carter's charter I think I did the math a little bit. We look at it up. Maybe we could have another seven to nine percent down the S. and P. Five hundred ought to hit that twenty five hundred super-low Nice Elbow Save. You're on the radio off elbows practice. Long-term support online right thinking about those are pretty important. Reference wants the owner law the the US debt two thousand eleven. The two thousand sixteen law in the two thousand eighteen where we just simply touch that that seven percent but From there it's anybody's guess. The real issue is the market which made a new high was never confirmed by most global. Iris Banks the transports and they call into question whether we do really test the December though so you talked about the Russell is being only four off of that. Unbelievable guess launch low which pointing is itself was down thirty percent so does that make it more attractive relative to the other ones relative to an absolute. Yes that's one way to look at and one could say says it's so much worse therefore it has more bounce central but I think it's because it's got so many things that are played i. It's waiting and financials as you know is almost double that of the S. and P. and small regional banks with rates and so forth are in real trouble. My haunt. She is that it's just a it's a preview of coming attractions for the beer. Indices and come in attractions are not things we tend has like the coming attraction of bad movie. I mean the bottom line. Is You see more downside? Likely ahead I think. That's that's the message that I would convey but I think it's also it's also this. Let's say it's not about the downside. Switch the subject. Let's say we never go. It's there's always downside and investing. We know that this is not you know tiddlywinks. It's about the upside. The upside is capped. If you look at the statistics on how long it takes to recover from a twenty percent decline. The median takes about two years. That's right that's the problem. I and maybe where you're getting two but let's cut right also to literally the shape of these charts. Investors are become so inured to expect a V. shape recovery and we talked about in the context of economies and is the is going to be a v-shaped recovery from the current avars who knows but but charts themselves. That's a big ask and we have the off the December that's the and usually you don't meaning it's tricky to pull off of either rare us or common you you heal you. Cure ricochets are impetuous impulsive. And they're Carter worth card. Good stuff there on those charts. I mean really long term that Russell Chart was incredibly dramatic Carter. Thank you very much needed. Time like this president trump meeting with his economic team about the corona virus and the economy and sensibly the stock market within the past hour. Let's get out of Ayman Jabar's who is at the White House with more Brian. We were told that that meeting began shortly after four PM this afternoon. Not sure whether it's broken up or not but I can tell you that the vice president's press conference on Corona virus which was scheduled to start at five thirty has now been pushed back to the top six PM and they have replaced the vice presidential seal at the podium with the presidential seal at the podium so it seems likely that we will hear from president trump at the top of the hour now and we may get a readout on what he decided if anything with his economic team. I was told they were going to go into that. Meeting and present the president with a list of options in terms of economic stimulus and response to the corona virus economic damage. That we've seen so far so as you take a look at that podium now in the briefing room we do expect to see the president there shortly here and we'll also have a chance to ask him about his meetings upcoming with those Wall Street. Ceo's that coming up on Wednesday and then the vice president will be meeting here tomorrow with health insurance as well as part of the administration's Corona Virus Respond. So we should have a little bit more news for you here in about twenty minutes time right. I don't WanNa put you on the spot with rumors and speculation. But I mean I know you're there you've got your ear to the ground. You're literally seeing some of these folks walk around is there. You think there's any real shot of some kind of massive stimulus. I mean literally sending thousand dollar check to small business owners or or tax payers. They're skeptical of that idea. Here right I mean on Friday. We heard Larry cudlow dismissed that as helicopter money pointing out that. It hasn't worked in the past when George W Bush tried something similar. They don't like that idea here on the other hand that was about three thousand points on the Dow ago. The Larry Cudlow said that. So we'll see where where the thinking is now. My sense is that what you've got here is a largely free market oriented economic team and a largely protectionist president of the United States and so those two things are not always on the same page and the President. is definitely one For big gestures He's one to to sort of go for the moonshot solutions. A lot of the time So you could see a scenario where the president looks that menu and says I'm going to go for the biggest possible option here but we'll just have to wait and see. I don't know what they presented him with in that meeting. And that meeting may have just broken up or be about to break up right now. Hey aiming it's Tim can you? Can you talk about the health? Czar talking about the economy today is. Can you explain what that was? It was unusual so that was the. Hhs Secretary Alex as our who came out On the driveway behind me this morning. He was doing some television interviews on another network then afterward he came over to where the press was gathered to try to get some questions to him. He came over to the microphones and gave a prepared statement about the stock market and said that the president has delivered the best economy and that the fundamentals of the economy are strong. He reacted the stock market. He said it's been very active today but the economy ultimately is strong. That's not a message. You typically hear from the Secretary of Health and Human Services at the White House usually. That's a treasury secretary. Message National Economic Council Director Message Presidents typically don't don't talk about the stock market really much at all But in this case as are clearly felt like he he wanted to deliver that message he came out. He delivered that message. To the microphones turned and walked away and didn't take a single question so it was clearly a planned thing but it's just an unusual thing for them to do that way. Yup Thank you. Lord image average aiming at the White House. We are waiting that press briefing as well guide down if we got some kind of fiscal package literally stimulus of some kind. Small Business direct payments. That helped of course it will. I mean it's and I don't know the answer the Steve Does and I actually don't know the answer their circuit breakers on the way up. No yeah which is fascinating to me used to be. I think but now he's eleven different stocks stuff on the way down. But you don't really have that methodical. I bring it up absolutely now quickly. If you can remember back to. I think it was February. Eighth Two thousand sixteen market traded down the Patriot down to eighteen ten. If you recall in August of the previous year yet china-taiwan deval. The market was on thin ice and cratered. That day. In the aftermarket that day you saw Jamie diamond by a significant portion of J. P. Morgan stock for himself when the soccer was trading fifty three. I think you had a Deutsche Bank bond offering as well and you had some sort of OPEC News and yet three things. The market never looked back. If we get a hint of that to your point casinos were buying their stocks to absolute absolute. You had a hint of that. Then yes is the answer you know. That's what the market wants. I'm not necessarily sure it's going to get it. We'll see but I think Brian it's a case where you use. We were all we're talking about tonight is uncertainty and yes fiscal path. Forward can give you some confidence. I think it'd probably gives you more confidence that that politically were able to get things done at a difficult time which are in the best interests of the country but I just think right now. This is the issue with stepping in on on on multiple fronts It doesn't mean that that asks have to get a whole lot cheaper but the grinding around in the sense that equities are GonNa v-shape and get away from you even on a fiscal package when you still don't know The credit story of a number of companies in and again people are starting to talk about big industrial companies. But certainly go through those transports and I don't want to name companies. At this point. I do think that they're fiscal. Would help more than the monetary would help. Let's forget the stimulus package under Obama's past. I think February eleventh or something two thousand nine the market bottom like a week later now very different scenario than I get it. But if you're looking for any acquainted to the break any kind of stimulus whatever it is. Well today's big selloff tried to send some investors into gold. But not as much as you might have thought yeah. Gold tick tire a little bit. But certainly not the move. Many may have thought Spring Bill. Baru Bill thanks for joining us here onset things. Were you surprised? Was it just that everybody was selling so much. Nobody had any money left over to buy gold. Seriously that's a good point because really if you look back in two thousand eight. Gold sold off in two thousand eight. It wasn't until the aftermath. When it rallied in two thousand eleven thousand nine hundred went down to about eight hundred dollars in two thousand eight. So I've traded gold for more than fifteen years. Cut My teeth on it. I've always lived by the narrative. You don't Wanna be buying gold when everybody's screaming for it. You WanNa be capitalizing on goal that you already own at that time so I think goals struggling around seventeen hundred right now and today you would imagine it should have gotten out above there. It couldn't behind gold. I came on the open the S. and P. That'd be sold off another hundred points and so. I think you don't want to chase there's GonNa be a buying opportunity and it's already up eleven percent this year so you look from that standpoint. It's not the time to be buying. Wait for for pullback here about silver yeah. That's another great point. Look at all the medals. The medals got creamed. I think platinum was down thirty bucks. Pleading was down thirty bucks. Copper was down silver silver. Can't get going and I think that's another thing you want to keep a pulse on because when silver finally turns that can be really great breakout that could send sin gold to new all time highs if silver ever catches that bid and keep an eye on your trading gold watch treasuries the yields and one thing that concerns me a little bit in the near term is. We've seen when quantitative easing q one. Q Two q three yields bottled within a month of that every time so if yields bottom and come up a little bit that's not support for gold but again that aftermath is what goal will help would break up. I gotTa Tell. You I've been a gold. I never got gold. I never got it so I thought. Part of the fundamental story was inflation hedge right. We couldn't be heading toward toward a non deflationary scenario. How is it that that that doesn't undermine the gold? I think you're right. I mean it's a narrative that's been flipped upside down. I mean we're going into a deflationary environment right now and really. I think it's GonNa be driving off the dollar two dollars week. Goal is going to be priced dollars and again dollar was down a whole percent the dollar index. Today more than that maybe but couldn't break out so I think you've got to kind of forget that narrative for a little bit but there's Times if we get an uptick inflation you've seen supportive for gold that day or that week when you look at. Bitcoin has it helped or hurt. If feels like it's helped the movement or the or the movement of money back into gold and if you WANNA make a headline here people have talked about five thousand dollar gold. What's your upside? Target Target long-term? Do you have any multiple thousand dollar target range because you hear that it could be the five thousand range? I don't put those those really absurd kind of outlandish targets out there. I think it is realistic. That C. Gold above two thousand twenty two hundred twenty five hundred and the aftermath of this speaking of Bitcoin. Though I sort of took it off my radar my everyday radar recently or Turner last year. I think you gotta keep a pulse on it but I think it was bitcoin down ten percent today the fact that it couldn't capitalize on that. I mean it's not a safe haven but again we're gold is you would think it'd be a safe haven capitalizing on a day like this. It didn't it's the aftermath. We'll get you back on talk about more of the industrial metals. Well wonder what their signal is. What listen to all these companies most valuable commodity in the world? We know what it is right. Now thank you very much. It's not gold all right. Let's talk about this Gold Guys Assembly Sammy and go back to. I was actually working in one thousand nine hundred ninety seven I remember the day market was cratering much percentage wise much worse than we're seeing over the last couple of weeks and gold quite a bit then all of a sudden the cratered. We saw it again. I think Oh eight. Oh nine. There have been periods in history. Where you say you don't go to go higher and it doesn't it actually makes sense for myriad of reasons not least of which source of funds of people getting out of things they have prophets in. I happen to think gold. The story is not going away and you again. Don't ask me but I think the next big problem is not going to be the rates continue. Go down when this. Genie is out of the bottle. And you get this inflationary period where I know. Nobody thinks it's coming. First of all there is inflation the Fed just chooses not to measure it in other conversation. Second of all the Ternan. This is going to be so violent. That the Fed's GonNa have no bullets and that's when it's going to be a story. There will be a time this year in my opinion where you walk in. It's two hundred dollars. People are looking around and the next day. It's up another you. Can you can time stamp that sucker for me. Guy Dominated the bold gold prediction all right. Today's sell off. Also drawing huge moves in the options market. In fact let Mike Cohen San Francisco. Mike told me you're going to talk about tonight and I said there's no way that's true based on the stats but apparently it is. Tell us about the put by. Yeah so we were looking at H. Y. G. Which is the high yield bond? Now it is conventional to see more puts than calls trade in this thing but nothing like what we saw. This morning the put volume was outpacing calls by fifty to one and actually of all of the. This was the second most active in terms of its buying. And it's pretty extraordinary because the only one that was higher was S. P. Y. Which is obviously a much more. Heavily traded instrument overall implied volatility. Which was right. Now we're looking at the price of ninety day at the money volatility in H. Y. G. is basically a ten year highs right now and the activity that we were seeing that. I was looking at. The March eighty-one puts nearly forty thousand of those were trading for about two dollars. Those are making bearish bets in H. Y. that it could essentially re-test levels that we saw in two thousand sixteen. And actually that's an interesting point because the two thousand sixteen lows. We are seeing stress. But we aren't seeing a crisis necessarily in these prices a lot of the issues. Is You know Brian. Like in the energy space for example the equities trading like grim death. This could potentially go a lot lower if we take a look at where yields are which are still under six percent so I think there is room potentially to the downside that seems to be what some people are betting on my co choice of unbelievable numbers there. Mike thank you very much I tim Seymour. I honestly I'm not the pro. You are. I just don't know if I've ever heard of or seen those types of numbers held pro. Let's be clear about that when we when we look at the H. Y. G. And you look once again maybe. The term of the night the word of the night velocity this move down quickly to those deck twenty four two thousand eighteen levels where high yield was hemorrhaging. And again what happens is there's no bid there's there's absolutely no one to step in and what we heard For Mike on the energy side what I was hearing from high yield and distressed traders that I speak to Reasonably regularly certainly during days like this This is this is where we are. And there's no sense that assets have really found a price again if you're if you're looking at higher first lien loans in the high yield space. These things have gapped wider. So you can imagine as you get further down the curve. So what what? My Co is telling us. Is that options. Traitors or people that are playing in the high yield space view that this move is set to break those December twenty eighteen lows and this is a credit move that I think is going to be equity negative one quick Dale q d which is investment grade that index also down normally with rates lower. It goes higher download. Report there all so we are coming up at the top of the hour and of course several key markets in Asia. They are about ready to open for the day. Let's get your setup now. Cbc's will caloric who is live for us in Sydney will outside. Expecting another significant damage does come to Asian markets. Who sold the Nikkei? Coming off around five percent. Yesterday it's looking can employed open eight hundred points down which would suggest around four and a half percent drop is interesting because the only strength was seeing is of course in the. Us dollar yen cross but also Australian markets are expecting another considerable. Sell down as well right now. The futures US showing Iran about a full point eight percent drop off when it does come to strong in markets. But I suppose the one saving grace is the fact that we've already taken our licks when it does come to the energy sector. They did see the worst day ever saw yesterday. When it came to all those plays at the same time we really hit that thirty percent drop off or perhaps they will be a little bit of as meant when it does come to those energy plays as well and also just quickly do touch on the fact that these straddling prime minister is speaking now. Fiscal stimulus is expected to come through shortly. So the hope is that we might have say a little bit of a turnaround in the Australian markets. Moving Guys Tar Wilkerson Sydney waiting. On that open it'd be circuit breakers. There thank you very much. We got some breaking news right now from Wilford Frost joining us by phone about this meeting with Wall Street executives in the White House tomorrow. Wilfred what can you tell us a brandon? I can confirm not tomorrow but on Wednesday the White House meeting with President trump will go ahead with the bank. Ceo's Wednesday three PM Eastern time The Nation's biggest seven bank from J. P. Morgan US BANCORP and all in between Have BEEN INVITED. Maybe more as well but certainly those seven have been invited and I know at least two of those we'll send that CEO. I would imagine all within the most senior executive and the other than of course J. P. Morgan with Jamie Dimon currently out of action. Some industry these have been invited as well including the ABA. The American Bankers Association. So this is taping up to be quite a large significant meeting not often you get all of those individuals in the in the room at the same time. Of course there are taking place to take place in the White House with the president when they three. Pm Eastern Time. We'll for thank you very much Wednesday three PM Eastern. I moved it up day guy but maybe they need to have tomorrow. Instead of Wednesday will these executives be able to do anything about what happened in the stock market. Not necessarily. But I think it'll be. It'll definitely be calming force. Look again. We're not here to hype up when it's hard to everybody when things are going lower. It is what it is. I mean this is what we're limited. We gotTA deal with it people getting together. It's not a bad thing. If something comes out of that that's fantastic. I do believe that we spoke about this earlier. There's going to be day whether it's this week or next week. You see the Dow Jones Industrial Average up anywhere from twenty five hundred three thousand points. It's not out of the realm of possibility given what we've seen and quickly if you want to look at something. Carter talked about it before that one. Twenty eight level or so in the eye wm. The Russell is a huge level. Now we can hold their the Russell. Never it never verified the move up and he s and P but if they can hold one twenty-eight maybe lead us back to the way up in the S. and P. Five hundred so for me the most important thing today at least is that one thousand eight level and the I W R one twenty eight on the I w guys all right so we got about ninety seconds off. We've been commercial free for the last hour. So let's try to figure something out for tomorrow. Not really a final trades. Tim just kind of getting text. Like your is the market going up to me. And certainly kind. Of A do's and don'ts and look my view is that there's been extreme selling that there's many things that are oversold and as much as I've harped on fear of credit. Here's what I think you should do. I think you need to have a plan. So don't not have a plan so forget the double negative have a plan on stocks that you want to own and at what level you want to own them irrespective of the apartment requires doing a little bit of work requires having a. I think a bottom up view on things but also. I think that's really. You have to be without emotion. I think you have to look at what today's lows were whether it's a single stock or whether it's the overall market index and I think that's where you start to look for a bouncer. Wait for the panic to subside. A little bit on corona virus. The more we learn I think the less panicky will be the first of all. You don't have to do anything but would I'm looking to do ad positions. I love like Google as it gets cheaper every day. I'm not looking to buy protection here. I think he missed the boat. If you're looking to buy protection too so it was painful but it's absolutely necessary and you know what this one doesn't feel good but I think it's the best possible thing we'll get through this as well. Brian good words. There guys create showed an commercial free for an hour. Thanks very much. We'll see you tomorrow. Mad with Jim Fidelity value is automatic. Starting with the rate you can get on your cash when you open a new retail brokerage account learn more at fidelity dot com slash trading fidelity brokerage services member NYSE SIPC.

OPEC SNP Tim Seymour Brian Sullivan US Mike Bradley Tony Dwyer Canaccord Steve Grasso Putin president Corona J. P. Morgan Wal Mart Russia Mike Karen Firemen
Fast Money 01/08/20

CNBC's Fast Money

45:32 min | 1 year ago

Fast Money 01/08/20

"What is decision tech by fidelity? It's technology that can help you find a stock based on what's trending or investing goal. It's real time insights and information formation delivered in your own customized view of the market. It's smarter trading technology for smarter trading decisions and it's only from fidelity pretty open an account today at fidelity dot com slash trading fidelity brokerage services. LLC MEMBER NYSE SIPC yes it does work it will find live from the Nasdaq market site. In Times Square. This is passed money. I'm Brian Sullivan. Your trader tonight are Tim. Seymour did Nathan. And we're also joined by Chris. Brown is that a technical analysis as strategic research partners or tonight on Fast Carlos. Goan speaking out DOC. After his wild and energetic press conference we have insights from our interview with the fugitive former leader of Nissan Constellation brands investors. They're fired fired up right now. Turns out it's investment cannabis. Maybe not as bad as once feared the rest of the industry follows suit and bed bath and beyond bad. BB Y shares. Getting an F.. The stock is down. Twenty percent. Effort withdrew its sales guy sales guidance and sales in the quarter tank stock. Actually down about twelve percents right now. It is fast it is fluid and is a big job for the new. CEO All that moorhead but let us begin with this kind of like bed bath and beyond but wild twenty-four for our for your money moments after we got off the air last night. The news hit that Iran launched missile strikes on Iraqi military bases at House. American troops thankfully nobody was hurt. The attack s and P futures plunging then. Iran calmed down a bit saying it would stop there. If United States to not launch any new attacks futures immediately rebounded making up nearly all of their losses markets open pretty much flat until shortly after eleven am eastern in time. I was when president trump addressed the nation saying Iran quote appears to be standing down just like that stock searched. The Nasdaq closing at all. Time highs again so goddamn here. We are yet another potential crisis but yet more new highs. What do you make of it? Well I think I tried to make this too complicated. I mean clearly. I've missed the terms of the broader market. Rally this for quite some time but maybe it is as simple as this. Maybe it's as simple as if the Fed keeps adding liquidity on a daily basis again. We'll say by April this year. If at current pace the balance sheet will be at record highs. I think that's madness. It doesn't matter. And the fact that passive investing is a thing and money flows into the market regardless of headline. Now we're you know loss of life side. I don't even think the market cares regardless whether or not something did escalate last night. I think it's so it's so insulated from outside news that it just seems so guy follow up on that so what will matter. I don't now the five on the Federal Reserve. And your guy saying this we. We know that the quarter of a trillion dollars a balanced that was basically added at the end of the year. And and we also know that we're here on this show not necessarily talk about the travesty. In the sadness of life to talk about what was gonNA move markets and we can have a parade of economists all hotels. The same thing the geopolitics at least in the short-term medium-term don't do anything to change the economic path and in fact I'm not gonNA. I'm not going to simplify simplify the tree and more down to that but even that is something that we've had a cascade of economists telling us that that's not changing the path and the economy is what matters for mark. Okay I want to get the safety trade risk reversal Dan Nathan because there there's more there's all this stuff now on the Internet about maybe more stuff over Iraq right now you don't know point one is we are in a nervous market. We should be nervous market. How do we protect ourselves if you are still just as guy said possibly putting in your 401k five twenty nine? IRA whatever whatever. Is there a way to buy a little protect sure. Well that's a good question and I think if you look at two thousand nine hundred and I were just talking about this. We started off on January second or whatever Adam we never looked back right it was off to the races. That's not a really common occurrence and if you look at two thousand eighteen the S. and P.. Five hundred did have three peaked. ATROP- declines at averaged about six and a half percent or or so. Nothing horrible held that uptrend. Now we broke out in October. We're up about eight percent. We make new highs. It seems like every day if you're looking at ESPN a lot of people were looking at the Vix last night when they saw the future future getting hit in the victims spiky a little bit never up that much you know at the money. SNP five hundred whether it'd be SPX SBY puts looking out a couple of months little glucose a couple percent to ensure yourself so if that's something that you're saying I had a great two thousand in one thousand nine hundred. I'm not so certain that up. Twenty eight percent. Maybe we put forward a little equity equity return given what the headwinds are worried about. Maybe the next time we see bombs LAMDA. Maybe there's gas in them. Maybe they're a little more accurate. You may want to have portfolio protection especially if you WanNa let things run a little bit and not panic like we saw last night and a lot of different asset classes. I would echo that I would say the ten day Coleridge shows the lowest. It's been in about eighteen so there's complacency out there. We have to be mindful but I WANNA make a distinction between a pause or consolidation and a top and there's no technical indicators at top is being put in place right now. Eighty percents percents above their two hundred. That is a broad market and look at the new high list today. It was risk on stocks the casinos. LVS and winter the brokers Goldman Sachs Morgan Stanley Ellie. I think that is a growth. In twenty years getting charts reflect what we know and what is the fear is what we don't know that this may not be over. We wake up one morning and have more headlines that are worse. Let's hope not but the charts aren't going to reflect the geopolitical risk. I think the question is does positioning. Reflect the maturity of what we've seen stocks over the last twelve or thirteen months the biggest influence last year. We're in low VOL stocks. That's where the excesses I agree. I think you're right Chris and I think the breadth of the market is certainly impressive since October. Three really since the SNP up twelve and a half percent but what has led the way even during that time is the triple cues. I mean big Mega Cap Tech Beck is up six percent to the SNP. During that time. Into what Dan is talking about look. I don't think people are worried about staying even from last year I think. What if anything with the market worries about with the geopolitics? You're talking about. Brian is that. There's not a ten percent pullback. There's a twenty five percent down because people look at some of the absurdity of the world and anyone who got a mind on two thousand and eight lift. That believes it can happen again so if anything I think it's your ten percent out of the money that's really the protection that people should have the confidence to go to sleep. An an invest in this market is because it till the Fed and central banks. Really start pulling away the punch bowl this marcus moving sideways and we're growing at two percent that's fair and you. You mentioned a skittish market. I mean maybe correctly but at thirteen and a half was actually lowered today. I mean how skittish is the market with Vixen. It's not at all and I think it again. I'll say it again. Maybe I'm wrong wrong. Probably but there's a complacent there's a bull market. There's a bubble in complacency the fact that you know people continue to be rewarded which is fine for buying in markets that that you know seemingly just go up at a certain point that ends and I think we're a lot closer to it but I've thought that for a while I wanNA bring it back home because we're talking about some of the geopolitical stop up you know one of the trades that I thought would have caught some steam if we thought that the trade situation was abating and that global growth was kind of coming back a little bit green shoots in Europe I would have thought that. US domestic domestic names. We'll think about russell thousand about small caps would have acted a lot better. We talked about the SAP broke out in late October. And it's up eight percent the Russell two thousand the I w the tracks is up three percent it really lags. It's not particularly impressive. And the only thing that that's kind of saying to me right now is that that domestic. US domestic thickest paying a little bit more attention to the trade stuff. Maybe didn't abate as much as we did in December and therefore I'd keep an eye on that one okay so the big market turnaround maybe leaving some investors on edge or maybe not the vix fourteen. The Dow though effectively traveling seven hundred points for its lows overnight into today's close. So how should you navigate. applegate these wild swings. Should you be more nervous than the market thinks joining us now as Canaccord genuity is chief. Market Strategist Tony Dwyer. You're sitting patiently Tony Listening to this conversation. My guess is you will say no. There's not a real reason to be afraid right so put words in his mouth. I haven't really we know any position the big gutter a minute before the show starts giveaway secrecy. The bed come on the big ball is usually the most bullish on the show and the most you know all year. I've come here last year and to what we've been talking about before Brian. The guys printing the money keep tevin either going to print the money and we keep trying to figure out if it's good or bad right or wrong it just is what it is now to your point exactly I feel like I'm the least Buller. Strategist out there right now. Everybody's ramp and their targets to thirty five hundred everybody's picking out in the bears that are switching the put call ratios are historically high the Money Movement into leveraged funds ETF is historic bullish. Ones is really rampant. I really kind of I see about five percent upside. I also think that you could have five to ten percent correction just because it's up too much. There's too much euphoria anticipation the overall market. I would say up to more than five hundred and by too much. I don't think it's too much. Valuation was fundamentally fundamentally. I think we can go a lot higher over time but there's times in the marketplace where you don't need to chase the next tick with fundamental backdrop of credit and all the things that in turn and the pivot in the global economy. There's no way you WANNA be negative in my view. But there's times where you can just just not chase the next tick and if you wanted to buy just wait for a little bit of a pullback and we're in that zone so because I did readers notes Brian. I read that in fact you're not concerned about the spread of junk over over investment. Great which is around one seventy five and that you probably more talking about a pause but you you mentioned valuations and that actually is what worries me I mean positioning is what it is but I think that can move pretty quickly but I look at price to sales I look at it and I certainly look at pe ratios and ICS back to levels. That I think we haven't seen since some of the most bubbalicious times when when you look the average multiple for the S. and P. Five hundred operating earnings it said nineteen times when cornflakes between one and three percent which has been since nineteen ninety five and then back into the nineteen sixties. Timmy Timmy. So you don't even have to go back there to find a higher multiple then we're at today from nine the third quarter of two thousand sixteen through the third quarter two thousand eighteen. You actually traded read it at one thousand nine or higher so actually where we are or higher so these targets that we put out a ridiculous because you're guessing at a point in time of what it should be. It should should be nine thousand nine or higher. I'm twenty times which gets me my thirty four forty. Could I make it twenty one times if I wanted to play the game. I just think it's the process. It's important accordin and in October early October when it said on the desk and it looked like the end of the world was comment and everything was rolling over on the trade war and it got to pessimistic. It was time time to get in the game because the guys printing the print them on the not gonNA print it forever. The Fed's balance sheet may not expand forever but they may even start to reduce. This is going to be heresy. So you ready for this okay. In a primary currency you can print as much money as you want as long as you're the primary currency so the idea that they cannot do this. They're out out of bullets his clearly by the expansion of the balance sheet not been correct so again. I don't want to say whether it's good or bad right or wrong. I'm not that smart when they tell. Tell me what the game plan is. I don't need to be smarter than you. I have to listen to. But they didn't tell you what the game plan is actually said it wasn't Qb. I mean think about it. They said that was a a mid cycle adjustment for the three consecutive rate cuts that started in July but what happened with the balanced they said was not. QE qe nothing to see here all his way any right but it doesn't matter matter. Think about this. It doesn't matter of its Curie or knock Ya. It's money coming into the game but I would take it back further. The dovish pivot in early January. Was the game changer. It was nineteen ninety five all over again when they went from tightening monetary policy to easing monetary policy in an administration that was under duress. Right which has an analog to now and the market gripped it and ripped. It went up thirty. Four percent followed that up with twenty percent year. Nineteen ninety-six almost thirty percent in nineteen ninety or thirty percent in one thousand nine hundred seven twenty percent and we have to stop with this all over it can correct. I think we're going to have a correction. I'm just asking people to not chase the tape. But until you have excessive valuations which you know. I don't think they are on the operating earnings spaces or aw aw all the money is coming in. Because Dwight soft and alphabet facebook their earnings hair and their structures bagged at the TRU. What so here's the thing to me? The high yield debt market is really important. What I buy you'll dead at this? Titus spreads not a chance but what is telling us is that there's so much money available to companies to borrow at such a cheap interest rate. There's no way I should be able to buy the house I could buy because but I can't. Because interest rates rates are so low companies are the same way. What do they do with it? And Manet buybacks the whole nine yards equity friendly things and you know what turns a five percent down to fifteen percent of that is is credit and there's not a lot of evidence of credit event going on right now. How does the dollar rates factor into this draw down? Is that a weaker dollar story or a stronger dollar store. Chris I love the dollar. It's it's never a positive for the market right because when when it's going in the favor of sap companies well it's currency translation. It's not organic does matter but when it's going to hurt the company's all out dollars if if you look at it at the dollar index is at the same place it was at the end of two thousand fourteen despite all the calls throughout that entire period of how much by the way good point Tony. That's why we haven't talked about the dollar index because been sitting there flat right dwyer great analysis good discussion. Thank the honesty and the candor. Thank you S. and be targets no matter they never have dude but what does matter Guy Hachette early and you another Mr Honesty. Said I don't know in my point on everybody's mind in the same five stocks the triple coupons or whatever they are does alphabet care if some ships get mind in the Strait of horror movie apparently not I mean in terms of the downside. That was sort of my answer. I don't know what's going to take. You could have made a very cogent argument. Last night was the start of something. Clearly it's not. I don't no. I wish I was smart enough. I do think a weakening dollar could be that I do think rates going back down could be that I think the gold market goes up every single day. Could that'd be telling you something but you know what to Tony earlier point. The Fed's giving you the playbook you just got to play by their rules all right good discussion guys in the macro markets. Now let's turn to the other major your story that we're following right now. Follow up to that tragic airplane crash in Iran. Here's what we know right. Now the Boeing seven thirty-seven went down shortly after takeoff from Tehran. On crash killed all one hundred sixty seven passengers and nine crew members on board. The cause of the crash is not immediately known. It's getting out of Philo. Bow with more on this developing story fill at first. It was mechanical failure. I heard you on this morning on Squawk box about it. Has the narrative shifted at all all as he has gone on yes. It's shifted primarily because this doesn't add up Ryan increasingly when I talk with people who have been aviation accident Inspectors or who have worked with the NTSB or with the FAA who. Now do this for a living as as a consultant whether it's with airlines whether it's with Boeing whether it's Airbus all of them have said the same thing none of this adds up and their primary feeling. Is this look. You just. Don't have a plane two minutes after takeoff which is on a normal flightpath hit. Hit Seventy nine hundred feet. There's no mayday call. And then boom all telemetry stops. No that doesn't happen in a mechanical failure. Those planes are designed even if there is a fire to give the pilots and opportunity to get back to the airport or to find a place where they could possibly land the airplane. None of that happened in this case which is why people are saying okay. Something suspicious here. Will we find out the answer. Maybe not Iran saying it may not turn over two black boxes or the cockpit voice recorder and if they don't turn that over well in this environment the odds are the NTSB in the State Department will never be able to work out. A way for Boeing knowing where others to get their hands on those two so it may remain a mystery. So as you take a look at shares of Boeing. Yes they were down pre market. When word I came out about this crash came back a little bit during the day? I would say that this stock is under pressure today. Brian more because of the downgrade by Cowan which said look the Max issues will will mean a lower free cash flow. I think that had a better a greater impact. I should say on this stock then the circumstances surrounding this crash again. More more and more questions than answers and really suspicious if Phil Phil how long you've been covering airline sector more than twenty well more than twenty five years now well then and twenty five years we have seen black boxes not get found. Unfortunately there are things in the middle of the sea where he just cannot locate. Have you in twenty five years ever seen a situation where the black box is is located but not turned over. I haven't seen that but it's not surprising. The country where the accident happens. They control everything. So if you haven't country look if there was a plane accident in North Korea is likely we would get the black box if we wanted it. No Oh and it's pre- it's a similar situation going on in Iran right now doesn't mean it's not impossible look at some point around may say. Here's the black box. We're going to turn it over to investigators so so we can all analyse the data but at this point the early indication is they're not planning on turning it over now but that that North Korean Air Koryo would be a forty year old 707 oh seven or illusion. Aircraft not been three year old. Exact blowing 737 Philip. Thank you very much you buy. So let's talk about the stock angle because as you adroitly noted that's what we do here even though it was a tragic obviously terrible incident. Here Tim on Boeing Company. That's what we do. It was hard to believe the headlines this this morning especially as we are digesting missiles from Iran Iraq. But when you consider a Boeing Ukraine and Iran all on the same sentence and it crashed airline airline. I mean it's so tragic and the problem here. Is that if you looked at the stock. The stock didn't really digest this in the way that it was a continuation of a mechanical failure. So it tells does you that there's something the market believes this more spurious because if in fact this was mechanical failure. Stock should be a lot more. There are big problems for Boeing and there's arguably still the people in this desk that feel it's touch. I haven't been one of them but I can tell you that based upon this news today. I don't know why you need to go and buy it. You know it's that simple. We are all speculating that there there could be foul play. There could not be ridiculously. Tragic and Boeing is still right now in the middle of this yet again with Ukraine airline. I noticed one of their newest and best jets literally how they described at one of their best. All right coming up we have got a can't miss interview with the fugitive ex. CEO of Nissan Carlos Go Show Cruiser Cabrera sat down with Mr Gone in Beirut. You're going to hear more that really fascinating interview with an even more fascinating press conference. It's morning on fast money right after this. What is decision tech by fidelity? It's technology that can help you find a stock based on what's trending or an investing goal. It's real time insights and information delivered in your own customized view of the market it smarter trading technology for smarter trading decisions and it's only from fidelity open an account today at fidelity dot com slash trading reading fidelity brokerage services. LLC MEMBER NYSE SIPC foreign the Nissan German Carlos Jones speaking for the first time since fleeing house arrest in Japan go go holding an hour's long news conference this morning. In Beirut former auto executive -secutive denying accusations of financial misconduct and said he did not flee Japan to escape justice rather injustice seem to see contributor show crucial boroughs sat down with a rare one on one. She was also in the room. During that press conference she joins US live from Beirut and I don't even know where to begin Michelle because that press conference that was something I don't think the business community has ever seen before. Yeah it was pretty extraordinary to be there more than one hundred journalists in the room for different languages that he conducted that news conference in French English Arabic Portuguese. He didn't want to end. It seemed until he had gotten to everyone if possible at first he tried to conduct it almost like a talk show host trying to walk through the audience but then photographers claim. They couldn't get good video of him so he went back to the podium. When I sat down with them we talked about a number of things? One of the things we discussed as to. Why is it that you think the prosecution against you in Japan was invalid? Alad and why do you use words like plot in conspiracy. Why would they want to do that to you? I explained to reasons first. Reason is the decline of the performance of Nissan where I started to be extremely frustrated with the management that In fact I put in place but he clearly psycho shows very nervous this about this job because he knew that you know presenting Granola with forty three percent of the shareholders. I had the power to remove him from the job at any moment which in a way which is justified if I build. The performance of the company was tiny. That's the first reason the second reason as I said there is a lot of people who really did not like it kind of merger merger with Renault and as long as I was heading their lines they trusted I would protect the autonomy of Nissan Protect Nissan. From you know the fact that the the French government wanted to interfere into business that the Japanese Thai couple But they said well why do you know why do we have to wait for this guy. Why don't you get rid of this guy? Get Him and the frontal we got two of the influence that has on us and they were right. You're saying that the the desire to keep Nissan as national champion was so strong they were willing to destroy you and your reputation without any doubt the the look. What look at the statements that were were made by psycho? After I was arrested. Look look at the to do to cooperation. The complicity between the prosecutor a Nissan to support they got from the Japanese government. The whole thing doesn't make sense for me. It was obvious and they got what they wanted. Except that today is running to the. That's the only thing that you think about is about. Will people be able to route the company and the answer so far Dr after fourteen months answer is no because the companies operating profit is going down The the the the gross has completely disappeared the market capitalization of Nissan and went down by more than ten billion dollars. Everything's going on. We also discussed of course his incredible escape from Japan. Japan is international cloak and dagger Story Worthy of a Hollywood movie you can hear about that in my interview with him which you can see the whole all thing on. CNBC DOT COM and. Brian also talked about the allegations against him in Japan and in some of the allegations that have appeared in print in places like France. Where Renault now is headquartered so you can see his answers to those questions as well in that interview who is unbelievable? Press conference incredibly forceful to the way the way that he went through. Those slides is one by one but he is not out of the woods yet. I mean Interpol is put out. I think in a restaurant for both him and his wife I mean is it possible. He may never again in his life. Be Able to leave Lebanon. It is possible he also has a French passport. He also has French citizen three the and Brazilian citizenry and neither one of those countries extradite their citizens as well on principle so in theory he could go to those countries but with an Interpol whole notice. You have to worry about. How do you get from place a to place? Also there are allegations in France. Because that's where Renault is headquartered quarter so you have to consider those issues as well but yes He's trying to figure out if that's going to be possible but he also said I asked him straight up it said listen. What if you have to spend spend the rest of your life in Lebanon and he said well? It's better than spending the rest of my life in Japan. Show Chris Cabrera great interview there as we said the whole thing on. CNBC DOT a Tom. Fascinating story as well. I know it's been a long day. Michelle thank you very much Tim Seymour. I know listen you you studied the world you know corporate governance. This is an unbelievable story on almost every level this will be a movie and this was an extraordinary day and a guy that needed to get his voice. Heard and maybe maybe due process was not being had Japan Bruno trades at a discount and trades at a discount for a lot of reasons but corporate governance folks when you're looking at a discount rate for a company Part of that is truly based upon either transparency parenti or a macro factors related to the sovereign nation. Is it a national champion company. which in many cases means that the country itself feels like they are more important than the company? I don't know if that's what went on here in Japan but it certainly part of the reason. Bruno has been trading at a discount despite some exciting news about some potential strategic partnerships the company's been talking about with some US player and he also said that he was offered basically double his pay to take the GM job. And he's like. I should have just taken that I've got. I've got the movie by the way going baby. Maybe going Michelle's interview can see more of it with Carl's going on our website. CNBC DOT COM in the meantime. Here's what else we got coming up on fast got foam. Oh after missing out on last year's Munster rally. Don't worry Chris Barons got three must own names for twenty twenty and later we'll break down the after hours action in bed. Bath and beyond post earnings is the new. CEO Turning things around. We've got that in a lot more when fast money returns all right. Welcome back to fast money. Let's take another look at how we finished the day on Wall Street it. It was really a wild twenty four hour curious today. Yeah we did finish off our highs but the Nasdaq Yup. Where we're sitting right now? Once again the big winner hand again. Yep You you got it another record close so with twenty twenty now in full swing. We're looking for the stocks that you simply don't WanNa miss out on the New Year so let us go off the charts with Chris. The breakdown topics Chris I got three. I think three must own names. This year will start with a very big stock facebook. It's really been dead money for the better part of the last two years bumping up against that to ten level bump up against that to ten level you had a forty percent drawdown in two thousand eighteen gene. So if you're looking for the bear market here it already happened. What I think is very curious about the last number of months that two hundred eight moving average has really started to hold as support? We did it twice in two thousand nineteen and the breakout over. The last several days I think is very compelling. We're looking to eighty maybe three hundred on this one on this year I think it speaks to overall tech and software. Generally getting better next time I WANNA talk about alongside is GE. We obviously know how terrible this one has been down eighty over the last couple years but very quietly over the last eighteen or so months we have this base starting to take shape getting up through eleven. A A couple of weeks ago was a very big deal I think on its way to fifteen. There are twenty five analysts who cover this stock only five of them have a price target above above the current level. So I think the analyst had to take their numbers here and then lastly we'll go back to the tech world consumer driven out of China. We like China here. I think the best way to play is Alibaba another stock that basically has spent the better part of the last eighteen months just in this big base in this big range just starting to break breakout I think any consolidation back to the fifty. Maybe worst-case two hundred is an opportunity to buy stock. Stock Trades about two fifteen to sixteen. Today I think ultimately apparently Going to two eighty or three hundred so facebook g e Baba I think three great longs for two thousand twenty all right. Thank you very much Chris for own wanted to come back over to the desk and trade this information okay. These names facebook. Gee Baba stick out good or bad for either anybody here on the facebook make sense. I mean I think facebook's has talked. We've done well with this year in terms terms of levels and stuff we said textbook back over the summer in terms of its retracement levels. Chris mentioned the chart levels. Now we're seeing levels. We last saw in July of two thousand eighteen certainly appears Pearson. So we're breaking out to the upside. You probably own it. In earnings at the end of the month I would say this though again. I don't think there's anything wrong with taking profits into that number we have have seen tremendous drawdowns. The name over the years. The last couple of quarters have been unbelievably good to the upside. But you know what I think. Now you're playing with house money. I would take a little off table Kris Bryant of three really interesting names because they're they're rarely together in the same other than when a great charter says. It's time so in the case of Baba the fundamentals there to make the most. Oh since I mean you you really have a case where on a peg ratio so price to earnings growth this company. That's trading certainly sub one. It's arguably you know. Twenty five twenty six times There's a lot of catalysts to name which also include that they may be spending off their alipay. They may be spinning off. Certain parts of their financial empire but but really looked their core e commerce business is is growing and that's exciting also that IPO locally means there's a lot of quitting the name the other side of the world it's not a surprise stocks fifteen percent since that's secondary anybody have a view in G. Because I know you guys talk a lot about Alibaba and you talk about about Facebook G. You're really interesting about all three. These names Brian is. They've all weathered really bad. Macro Stories facebook antitrust it'd be not for the level of GE Chrissy the business is dead right seventy percent of China. So I like stocks that don't go down on bad bad news and I think all three of them start to exhibit those characters over the last year or so and that's a compelling reason to own these things until we better macro year facebook really interesting. 'cause you just said it's just come out the other end of something and I'm not so certain about that. I kind of feel like this is going to be like the poster child for s g investing going forward. We know that it's a huge part part of a lot of major indices. That sort of thing so I think that there's a pendulum that has shifted with facebook. And let's be clear here. You know two thousand nine hundred thousand a year where earnings did not grow materially for the first time ever in their history because of all the things that they're trying to get out in front of sales though are downshifting a bit bet at least growth wise. You know there's going to be twenty percent grower. I think for the next few years. That's the guest but at some point if advertisers do leave if user growth decelerating if engagement agent decelerate and then sales growth decelerating the stock at twenty six times is GonNa look expensive especially when you consider regulatory headwinds and some of the other things that might be just mechanical chemical to the way and funds created going forward. All right good stuff there and probably one of the first positive mentions of G in a long time right. Well certainly if two thousand twenty all right coming hang up bed bath and beyond shares. They're well off their lows. That's the good news. But they were down twenty percent at one point. They threw their guidance. Sales fell we're gonNA take you inside. They're no good very bad quarter and whether or not that. Co The new one. Just kind of throwing everything out there right now. Later on ridesharing and restaurant rating take a look at shares of Uber Lift and yell all popping. Today what changed for these stocks that investors have loved to ignore the past to find out with fast money returns and welcome back to fast money. We've got an earnings alert for you on bed. Bath and beyond it is not pretty art sales coming in weaker than many expected. The company withdrawing future guidance. Here's the good news. The Stock Chris Chris down six and a half percent. I say that's the good news because about two minutes. After this results came out the stock was down. Twenty percent weird stock to very very heavily. shorted up seventy percent of past ninety days. I should think this is a stock. Getting better I know the numbers are bad. The look at the response after hours here. They had this down to thirteen bucks. It's back to fifteen fifty. You had a big volume update a few weeks ago around the fifteen dollar level. I think he'd be can hold fifteen dollars tomorrow on terrible news with short interest huge. I think there's eight thousand nine hundred who cover it. There's only four or five buys on the stock. They have thrown the kitchen sink. At this one wholesome level it may take a shot on the long side. Here disagree I mean and this is stock. We've talked about Courtney hosted the show the other night and I said you know what owned it and earnings and aggressive hone it own it post earnings. That was clearly wrong. But I'll say this. The recovery is important and look at this number merchandise inventories for the quarter which is important in this business down fifteen point six percent. Why is that interesting? Think because it's a new merchandise inventory initiative they're taking I think margins will be better next quarter you can make a case that this is a new. CEO sort of throwing the kitchen sink. Thank out and if this stock comes close to opening unchanged tomorrow I think you can have an eighteen and you also brought up. The other day rightly pointed out the forty six percent short interest. I mean this stock has doubled Going into the sprint. So this reaction shouldn't be a big surprise but again you have to ask yourself what's really the future for bed. Bath and beyond guys outside of the central candles that I know you show up weekly for I don't I don't see what they are doing. What's The in store experience that you get that? No one else seems to get. I enjoy the sports but this is what's really interesting in these conversations. We have about some of these big box guys in some of these department stores. This is a company. That's eleven billion dollars in annual sales and it's stuff that almost everything that you you buy there you can get at Amazon so at some point it just got has to get digested. Do they become the. I just don't know and I think that we're GONNA see a lot more eighty dollars stock in. And so. Now here's a story. You know I mean obviously you gotta look at the free cash flow. They have almost four billion dollars in data two who billion dollar market cap you sit yourself. How do you get out of this? Given the headwinds that they have with some of the competition all right. Well let's stay now with some earnings because checkout shares of Constellation Installation Brands S. T. Z.. Stock popping on better than expected results and Jim Cramer sat down exclusively with the company's CEO. He asked about the company's investment in canopy the growth which is not always gone as smoothly as hoped. Well as as you know as well as anyone anytime you have a startup industry either spits in spurts attached to it. What we're excited about? His canopy remains the share leader in Canada and the largest seller of cannabis around the world. Now we're putting in place a person that you yourself is a great season executive who will bring discipline and focus to the leadership of that business so we remain very bullish About it admittedly there will be times when we get spits in spurts and the cannabis business. We think the long term play around that will be quite healthy all right so as always you catch the full interview tonight with Jim on mad money starts of course six. PM Eastern time. So Tim let's talk about. What is your take on the stock right here again? Let's get back back to their core business. which is this is the best in class in beer and these guys are actually growing their business seven percent? They're going to their their their net profit on the business eight to nine percent The Gallo acquisition in some divestitures. Titans this thing up a lot This is this is to me. One of the most aggressive spirits companies in the world. And they've gone after certain markets and they've done it very well in fact they were one of the main beneficiaries of but having to divest Essentially Modesto and they got it. They're moving to cannabis also very aggressive. Was it early. Who knows? I'm David Klein taking over as the CEO there used to be the CFO. Constellation should give. Everybody and I think that's what that conversation was about a lot of confidence here so I am long constellation. Komo Constellation for Constellation But there's a lot of people that like it because it gives them some topics of their cannabis exposure terms of price. Tim was honest the other day might think that in a hit on on this last quarter maybe got ahead of itself in terms of price for the quarters traded down to about one seventy five hundred eighty. Now I think it got to negative into this corner. We'd discuss that. I think valuation makes sense margin seemed to be improving. You know. I think the canopy initiative or canopy investment is going to be really interesting for these guys and Gals. I think you can continue to Own Stock despite the fact that it's up five six percents guy. Presumably the market knows these things and this is a stock that peaked almost two years ago when all the staples rallying last year. This one didn't participate. Okay so I have to just ask what's wrong. What is the chart trying to tell us? Here it's right back at the two hundred two levels fell that In the past one ninety one ninety five level I think is difficult. I'd be gallagher. I think there are better things to do in the sector. Sec Good discussion then well as you know as well as anybody anytime you have a startup industry there are spits in in spurts attached to it. We're excited about canopy. And it remains the cheerleader in Canada's largest seller cannabis around the world. That's a we just heard but up next folks we're GonNa talk more about this great seasoned executives free discipline and focus to the business. I just got off a plane I'm woefully unprepared. Give me a break. All right on deck is a sale in the cards for GRUB and who could be a potential buyer. We've got some opinions and options on that and then later later on one oxygen straighter just made nearly four million dollar bet. The markets could go wild or to tell you how you could make money on it. If I'm still here after the break. Correct all right. Welcome back to pass money. Investors grabbing up GRUB HUB shares the delivery service oriented much of seventeen percent today on reports. It's hired financial advisors free possible sale other stocks centers around that Space Uber Uber Eats yelped they reviewed restaurants also rallying on this report. Dan Do you think there could be much more to the story Listen there was a time last year when I was investing in this in private markets markets. And they really loved this whole theme they like it much less now. They don't like it. It's part of uber either. So I'm not really sure about what sort of scenarios I haven't given it a a whole heck of a lot of thought where you put some combinations together and the two pieces together or worth more than what they are right now. We've seen a lot of money just lit on fire in the last last twenty four months trying to do exactly what these guys do. I think the pizza cough decline that we saw over the last year. And grub tells you that there's a lot of competition sales growth for this. This company has just ground to a halt. It's going to be maybe twelve percent this year. Twelve percent neck so I'm not certain I don't think you go out and buy because they might get Sold I tend to agree. I think this is the area area where you sell the stock. He just went thirty to sixty over the last couple of months. You had what little thank capitulated volume today. Twenty million shares. I think that's good enough reason to let it go here. You're right back at the two hundred. Can we fail here before things in downtrend should be sold at the two hundred. I think rub is the epitome of that any other play. Dubai Uber on this news guy. Because if GRUB hub sells itself or maybe you know changes its model and you've got ubereats sitting out there. Does that make it. Look what no I don't think for stay long. Lift I think is a name. We'll continue to prove itself. I mean the quarters have been good and they have a pathway to profitability. We've talked about that. Push back a little bit here on Grub. I mean if you go back in November weeks broke broke down from fifty nine in a meaningful way. I mean I know that's not that far from here but that's another eight percents so I do think this further upside. I think these things tend to overshoot to the downside and in this okay so they could overshoot to the back to these. IPO's it around a bit. I mean I in this case I don't think there's an invisible sun on this one. I think you actually have a case where. There's been a lot of bad news for this this company and although we said it's going to get better and too complicated and maybe they'll rates and now they have to become a Jim Cramer degrade tweeter newbury's basically had a picture ubereats and he said sell all this stupid business at his worded right and the stock I think he agrees. There's no synchronicity. We've been talking about that too. Medically lift versus Uber. VC's were just pouring money into hoover. They wanted more geographies. It one more businesses. They wanted more. Everything was magic. What but what public look? Investors would love to see a more focused business. And that's one of the reasons. Why would he do it? It's all police lyrics the band police if you have missed yeah I mean synchronicity on this one okay. I'm sorry I didn't know if you play the game with US okay. Well having tea in the Sahara okay. Coming up one options trader is making a big bet on market risk. What are they? And how the Betty. How can you profit stick around to find out as always you're live? The Nasdaq at Time Square. More fast money still ahead of New Year but the same story is two thousand. Nineteen stocks breaking the brand new all time highs today. This part of the president trump announced that Iran appears to be standing down his term after firing missiles at American targets in Iraq. But if you're only looking at the stock market you may not even have realized. There was a major international incident last night. Any more than one. The volatility index is is barely moved throughout the last week vicks thirteen and a half a one trader in the options market. Is Betting nearly four million bucks at market. Volatility could skyrocket in the near future. Mike goes in San Francisco. The options action. Mike what do you see in. What does this trader doing sure so very shortly after the open today around around nine forty? This morning we saw call volume in Vicks outpacing put volume by about four to one. Now it is common for calls to outpace puts but this is still double all the normal ratio that we would see. That was a result of a single very large trade. Somebody purchased seventy five thousand of the February twenty five vicks calls alls they spent about forty nine cents a contract for each of those and the better bet of courses that it's going to rise above twenty five February expiration if you're going to hold it that long and that obviously would be a big increase. I want to point out that the important thing here is that when you're looking at vix options they actually represent the vix futures and we can actually see what they they might be betting on if we take a look at how the vix futures behaved overnight they actually really spiked. They do trade overnight. We saw them spike over eighteen overnight on that news of what what was going on in Iran. Obviously they fell off quite sharply here and earlier. We heard Dan talking. About how the head your portfolio. Maybe buying at the money puts this is more equivalent to buy out of the money puts fifty day twenty Delta puts her so kind of I think what Tim was talking about a way to hedge a portfolio. My guess is that what this trader is doing. Wow that is that is bold bold move Dan Nathan what do you think would you make. That bet did a great job explaining how vix options straight against the futures are pretty complicated for I think a lot of retail investors. But one of the things I think are really interesting. When you see a slug of options trade that the really liquid large institutions? This player came in right after the the opening and bought these things up. And so if you were to get the next set of bombs like I said it's the worst scenario you might see a vix north of twenty and this would be a good way to actively actively bombs away but we're okay all right good stuff and thank you for options action. Check out our full show. which is every Friday five thirty? PM Eastern final trades. You're next all right. Let's picture final trigger horrid Tim Seymour kick US off World is not enough Baba attitude today. In fact I do think this doctor can continue to run in twenty Chris. I like GE here the street hates it. I think those fifteen Two months ago pinterest broke down below. It's ideal price kind of coming out of it here. I think you play for breakout of twenty. GotTa Tell You Jones Ian and Jason do a great job with the music and I think we should give them props which suggested and I will say he lied. Lilly will continue rally in earnings Bryant. Did a great job and you guys are all the land does more appreciate it. We'll see you tomorrow. Mad Money with Jim Cramer begins right. Now what is decision tech by fidelity. It's technology that can help you find a stock based on what's trending or an investing goal. It's real time insights and information delivered in your own customized view of the market. It's smarter trading technology for smarter trading decisions and it's only from fidelity open an account today at fidelity dot com slash trading fidelity brokerage services l._L._C.. Member N._Y._S._E. S._I._P._C..

Chris Chris Brian Sullivan Iran Tim Seymour Federal Reserve Dan Nathan facebook CEO cannabis US Boeing Company Japan Jim Cramer Nissan GE Tony Dwyer Michelle
Fast Money 09/16/19

CNBC's Fast Money

45:09 min | 1 year ago

Fast Money 09/16/19

"What kind of Tech Company does the world need today one that applies smart technologies at scale with purpose and expertise not just for some but for all with a I- blockchain and quantum technology. IBM IS PARTNERING WITH CLIENTS TO DEVELOP SMART scalable technologies that help businesses work better together. Let's expect more from technology. Let's put smart to work visit. IBM DOT COM slash smart to learn more and live from the Nasdaq market site overlooking New York's Times Square. This is fast money and I'm Kelly Evans in for Melissa. Leo Today are traders on the death star Peden Jerry Karen Feinerman Dan Nathan and Guy Adama on the big show tonight. Don't want us down day marketable. Tony Dwyer says it's time to play offense the the US what he calls the third mini recession then easy on the clutch and lift finally getting the gear the traders will play the role of backseat drivers in debate that one today but first energy stocks logged their biggest day since January the sector out of correction in this following a major weekend attack on Saudi Arabia's oil facilities if outages extended or if military action is employed in the aftermath. What could the further fall be. Let's start with Mr Donahue. First of all welcome misses the first time you've hosted this show and your father's watching so Mike Evans daughter yet what the whole hour but my today I might live goodies Kevin Steroid guy. You're the best thing anyway so. What's the fallout from this well. I'm surprised the market didn't trade off more. You know over the weekend. I'm like you know twenty five thirty s and p handles easy on Monday. Airlines didn't get crushed big CAP. These big CAP integrated names and oil go much higher. None of it really happened. The S. and P. Close down nine nine handles which is pretty benign airlines down a percent and a half and Delta's recently off a fifty two week highs so to me. This is actually very encouraging day and this is from somebody who's been embarrassed for awhile and saying you know what you gotta be impressed with the price action across the board today encouraging. I would say that's as regards to the market right so talk about the economy last last week we had this pretty hot inflation print and so when you think about this you see crude oil go up the way it did and you see the dollar actually stay bid to me that actually poses. Some sort of issue could be really interesting fed day on Wednesday. What is the commentary. GonNa look like right now because we know that the administration doesn't want oil where it is. They don't want the dollar is and what rates where they are so this could actually create a pretty interesting week as it relates to macro that being said I get you know the S&P is always he's that acts well relative to almost every other equity index change anything for the. Fed Decision Wednesday. I don't think so I mean they've they said the you know the trade issues that sort of not really there's to trade. This is even more. It's more granular than that so obviously oil spiking this much. Ah Ten years ago this would have been a gigantic deal. It's a big deal but it's not as big so twenty cents at the pump. Let's say which is what we could kind of see happen over the next couple of days that the kind of consumer shock where you think they feel like they have to do anything in response to it. I don't think so I guess pretend it depends out prolonged. That is right. If you look at the if the curve you know they're showing growing oil back down you know in the fifties several months out but I think the market sort of poised all right. We're going to have either another big down or another big leg up in oil or or another big lake down. I don't think it settles in Right here interesting so I guess would be we actually see that push back to the downside as as the dust sort of settles Kellyanne we start to see some of this. I mean it was amazing. How many options we saw trading over the last three or four days of last week coming into what had turned out to be grown strand full my goodness. It was absolutely from Occidental. You go across for the X. P. X. All these various names we had seen nothing but bullish activity and it all came in specifically it went to some of the very very very far down the ones that are extremely shorter. Don't waste and some of these names whiting petroleum. Those names were absolutely attacked in terms of buying upside well. They profited it very very well today on what we saw over the past week. What do I close Brown. Fifty percent was what I saw. During the session today said heavily shorted. You know some caveats there but what now are those names where it says okay. This is a short squeeze or some kind of move like that and if you're bearish on Energie then you have to get out as quickly as you got in. I would say that the short-squeezes squeezes only lasts for a number of days. Normally I would say so he was in. I was lucky enough to be in these bill but only because I'd seen all this activity through our algorithms that search for that but it it was just amazing. Kelly and I would say it's very short lived and the reason I said is when we've seen stuff like this in the past whatever the sector might be it works for a little while but the big scheme of things we're talking about oil which I think if you look out further on the chain oil looks like it's GonNa be going back towards the lower end at some point and you see that Karen already with backwardation. A slice drops to the fifties a couple of months out even if it's the case that this hangs on for whatever happened today the fact that we're only talking about the biggest day for energy since January. It's pretty shocking. Why weren't there bigger reactions for some of the the big cap oil and gasoline look at the range just in in crude which started trading last night when you look at like? I was actually looking at the USO. which is the tracks oil it really was there was no real call buying in that last week whatsoever so? I don't think I think that crude came in last week. It was down from the high fifty s to the low fifties you you might have seen some activity in some of these very lever dame's and it might have just been very single stock related but there was no big bats in crude futures and options on crude futures or in the underlying lying that tracks the commodities so to me. It seems like very specific. I just want to make this point though you talked about what does it mean for the Fed. You know we're we're GONNA see you know when we got that mid cycle adjustment. They specifically talked about tariffs there obviously right now. The market has found a bid at least stock market because they you feel like that. At least the rhetoric has been dampened a little bit about new tariffs but we have oil higher. Now we have the dollar bid like just said and we don't have a whole heck of a lot of clarity about what's is going to happen here so there is a shock that could happen if they don't actually cut. I mean. Can you imagine what would do right there on Wednesday afternoon. That would be something that I think. Would you think that would be plausible. Response to what we the oil price action. We've seen well. I'm just saying that the data's been okay the only reason why they did that at mid quarter adjustment was because of terrorists and right now. We're more optimistic about that. I don't know what is this oil shot. Due to the economy also guy to your point earlier which is that you're surprised that in a it's not more extenuated today not only do you have the kind of headlines we don't get out of the Middle East that often but you have energy which would be shriveled to be the smallest sector in the SNP coming into this horrible. I mean you had the perfect setup for major pop and yes. You had a pretty big one but it was relatively contained. What does that tell Roy. Grow tells me if maybe the global economy is weakest. People suggests that it is maybe oils not as important commodities it was ten years ago and you're talking about the biggest supply disruption in history story and again you know the S. and P. basted. It's all time high is down nine handles. I mean that is a remarkable performance to me. You Know Airlines which should have gotten really obliterated today percent and a half two percent across the board. That's not bad so I look at this and say understanding that the situation Saudi Arabia's GonNa go on for quite some time to take a long time to get back online but the market is saying. You know what it's not a big deal. I'm encouraged by the price action and again. I preface this by saying you don't probably one of the more people on the desk but still the longer it lasts. That's where you start to see. The projections go up for how much impact there could be on the oil price couple of other places as you heard Jim Craig. We're talking about earlier today the defense names is that a a place to go. If you think that the next moves here involved the defense stocks you mentioned the airlines American and one point five percent earlier closed down more than that I I think that the people okay so maybe they're not all carried out across the board but Texas banks by the way I've seen people saying this is bullish for the Texas Banks Comerica the light because you get a better profile of the company so they're exposed to for the time being. I would've thought we've seen more of a response to the defense stocks pretty muted right and pretty pretty muted energy the X. L. E. pretty muted so I I mean the market is telling you this is just a kind of not a giant big to do won't turn turn into anything much bigger than this and that the economy will keep pumping whereas looking at some of the the airlines are not hedged. That's not great but businesses. This is still pretty good. I don't know I don't get it. Hopefully down the consumer. Then I guess actually I felt like I thought we'd see a much bigger response even just because the the markets so high well the defense docs though have already had a pretty good year coming in so I think that's part of it is some of its sort of almost priced in right now. I think Dan back to your point though about looking at futures in the USO and some of those I think when you look at the liquidity right now in the leverage that you get from a Lotta these equity names that people can trade. I mean quite honestly what we'd seen last week when talk about something like whiting petroleum they're buying the September nine calls for twenty cents. Today those went to two dollars. I mean you WanNa talk about movement and somebody by sixty five hundred of those and and then they pile on after that to buy a few more. That's what I'm seeing in the market right now and that's why I think they're looking for leverage. They're looking for ways to be able to play what they see coming forward in terms of energy or whatever the case might be but the defense stocks are really interesting as a matter of fact later on. I got a pitch. I might have one of those names in those. That's a teaser pretty good one. We were just talking about crude being on the move. It's been an today but our chart master says when it comes to oil what goes up must come down the plasma. Tell us why we might see things. Go belly up here Carter. Thanks Kelli yes so it's it's all about the gap meaning when you get a security neither gaps down or gaps up news related often. FDA approval restate your accounting or in this this case of course a drone attack. The concept is at the lowest price on the open is higher than any preceding price on the day actually see there's a gap in the chart. We're going to look at this in context of gaps as a principal so let me just show you a little bit of data and then we'll go from there in the past ten years twenty years thirty years there've been fifteen fifteen gaps fifty one one hundred twelve and all of them have been filled except for one one and then if you go back thirty years only two unfilled gap so this gap is fairly rare were. SA- differently well. It's not that rare. The notion that will live on and not be filled is unlikely here we go so the gap and these are not an investable timeframe if one's waiting for this gap to be filled back from nine hundred ninety nine at twelve dollars a barrel of course that's not not reasonable if one's waiting for the down gap when oil was at a peak and starting to come off at one oh three that's not reasonable so these two aside these extreme all the others have been filled except step now. We have one today. I WANNA put the move in context here. Is that gap. Here's the setup going into the move. I mean quite remarkable. Yes yes that once again. A formation of some type or some form can lead to equilibrium disequilibrium but the gap barely changes the long term picture and we kept above the line and we held our gains but not impressive and ultimately I do believe the gap will be filled sooner rather than later so the two major unfilled gaps again. Some one hundred plus gaps going back. There's one way up here not an investment time horizon and there's one way down here again. These are these are tomorrow's launch but the notion that this is a bitty little gap that we saw newsletter not will somehow not be filled. It just doesn't it doesn't wash in terms of the satistics so now energy itself. Here's the XL and what we know is it's relative. Performance has been a disaster and it has failed every single time when when it's come up against it's relative down big move with other value stocks. I don't think it goes much more than this and then finally of course this is either the the sad reality reality or something different energies waiting in the SNP is four point seven percent. It's back to historic lows. That's the great opportunity that some value investor might think or my judgment is that it belongs here all right Carter come on over. Let's trade. I will bring him right away about over with on a big wall on the debt the we cry. I think Carter's right in terms of refilling this gap. We're filling the gap to the downside. I mean again. The price action today was interesting but I don't think it's you know if it was a demand story. I'd be concerned I mean the supplies come back and all different forms. We're not nearly as dependence. We used to be and the fact again that these stocks or the broader market didn't react and meaningful way leads me to believe this is not necessarily a one day event terms that commodity but it's going to back and fill it. Everybody's wrong about that. You know it was okay so we know what price right now a couple of week outing type of event no major bigger geopolitical what if what if that's not how it pans out bigger geopolitical look at that's a force majeure acts of God that you can't handicap so if there's missiles are gonna fly of course it's quite much higher but as of now the market's judgment you guys were all talking about that is muted and I think that's that's the tell that for now. This is not the great event that it would headlines would suggest there's also big difference in the types of crude. We're talking about the ones affected largely going to China big customer over there the US crude. It's light or sweeter different refining capacity for us to handle that in our own country. What are the implications. If oil stays up here in your your China you already have an economy. That's struggling does it kind of cast your trade negotiations with the US in a different light. Bring a man. It's an input. Maybe the Fed these are inputs but I mean it doesn't matter for the market it's so much because it's low waiting as a sector and it doesn't matter if the consumer because of the input price of their total costs if nothing else but by these sectors when they they were at historic lows in terms of the S. and P. and sell them what they were at historic highs wouldn't that have been pretty good overtime hard to denver in fact when a sector got his highest thirty plus percent of the SNP the seventy nine eighty one oil spike that will also work. If something gets higher than twenty five percent financial done attack you fade it but you need a one of your career do it. The problem for guys working on anybody. Here thinks that energy desert doesn't deserve to be the smallest sector of the S. and P. He four and a half percent think that it might be more sign of the bottom than it's been a long term support you do. I mean I feel like you know. It's been so unloved loved so shorted. Maybe the short part of the story is over right somewhat. I mean if you see you could get blasted so badly today. Maybe that's short part is somewhat over which allows for it to recover on only mildly good news. It may interest you enough to get a little bit it actually yes yes it does. There's something interesting. Calculating here asked it's easy to sector right to stocks Exxon Chevron half the weight of the entire sector. So is it good or bad actor. Will you better get those two right. I guess as a process but that's the point is it's not as important as it ever was Carter. How long would crude have to stay over sixty dollars where you confirm and say you know what now this thing is going to be able to hold his as you know how to not fill the gaps that gets you to how how what's the freezer. which gaps are filled most of the gaps if you look back or fill within about thirty days okay so that could be stop? Give it a month all right Carl. Thanks very much appreciate it. Sir Carter wars coming up the United Auto Workers Union striking against General Motors. We'll tell you why the strike could shake up the auto industry three plus one top strategist says the many recessions are over who give his playbook for the next rally we'll from Times Square New York City and there's much more fast money right after after the father and daughter both brilliant in determines can they put aside their differences to fight for justice. UK's the world Jimmy Smits and Caitlyn McGee star in Bluff City Law premiering in December twenty third on NBC well back to fast money nearly fifty thousand members of the United Auto Workers Union striking begins GM today. The group is pushing waiting for an increase in wages as contractual resume this morning. Filipo is at the picket line in Detroit with more fell jelly late this afternoon we heard from the ratings agencies sees about how long a strike would have to go before it would have an impact on the finances and the balance sheet of General Motors. I mean I put some perspective in terms of what General Motors this is likely losing on a daily basis the estimate from analysts they're pretty much in the range of between fifty million and one hundred million dollars one hundred million definitely on the high end most. I think it's probably closer to sixty or seventy million dollars. They're losing production of seventy five hundred eight thousand vehicles a day but remember they've got plenty of inventory. Moody's Moody's out with the report today saying GM's ability to contend with a short duration strike no more than one or two weeks is comfortably supported by its seventy seven days of us. US inventory seventeen point five billion of automotive cash and sixteen point five billion available under its credit facility that seventy seven days of vehicle supplies applies. That's the overall average for General Motors. The healthy industry averages closer to sixty days and also keep this in mind. Kelly the very profitable Chevy Silverado pickup truck. They've got over ninety days supply so it's not like you're going to see a difference at a chevy dealership anytime soon in one last. It's not guys I know. You're probably hearing this music saying what's going on. Isn't this a strike. Ono gone are the days of the chance on the picket line they hired a DJ WHO's playing music music here as they walked the picket line hamtramck land. What are we supposed to read into that plan to be here for a settlement for the duration well. He certainly here for the night. Hes for a couple of hours. It struck us is a little odd but that's what they've done. I have one more question for you so competitively speaking if this is a distraction action for GM for days or weeks. I don't know what people are saying. At this point Ford Chrysler Imports Tesla I mean is there. Anybody who would think would obviously benefit from this or would wouldn't work like that not not not immediately. This would have to go four five six weeks before you would start to see an impact eh dealership where a potential customer might come in and say. I WANNA Chevy Silverado. I wanted this trim level. I wanted this color. What you don't have it. You can't get it. I may go across the street but even then Kelly keep in mind. Truck buyers are incredibly loyal. If you're a chevy guy you're still a chevy guide. You'll wait out this strike. So I think the impact impact in terms of sales you really would have to see this strike extend much further than anybody is expecting before. You hit the bottom line at they've got some more. Dj's lined up then they'll. Thanks very enjoy tonight in Detroit for us. How do we treat it. Well this time you know two thousand sixteen this time. GM was a thirty seven dollars stock you look up whereas GM thirty seven dollar stock and within a whisper of an all time high and the S. and P. Five hundred in the last decade where you can make arguments. It's been the best decade ever for autos and the stocks can't go higher lump that on back and Ford which is even worse story people talking about valuations compelling. I I get it and you just look at the numbers. GM's probably six and a half times. Ford is probably lower the net but the stocks don't go higher when they should that to me is tell I think they're uninvested a broader implication. If the Phil said if this went five or six weeks you may have some issues for GM. This fifty thousand auto workers are on strike. There's about two hundred and twenty five thousand auto workers in America who manufacture cars but the whole industry supports like ten million jobs. You do not want to see this go too long. It brings me back to last Q. Before when we had the government shutdown that was a drag on GDP. We do not want this going into Q. Four is if anything tell you about how how diminished the car. Industry has become in terms of insurance but this is a very vulnerable workforce that we know we know that they're already have the headwind of the tariffs. This was an industry facing. You know that impact so this is a part of the country. That's very vulnerable. Do Not WanNa see this go too much further. It could have broader impacts. I think that it doesn't go very long. I think trump won't let it. I think it's too potent for him. You're talking about the sort of out of all the suppliers and you know that's the kind of wrench he absolutely doesn't WanNa see in the economy. If you're trump though how do you navigate the politics of this because you're very populace president but siding with the Union is not something a. GOP President is typically done. We are always distaste for. GM managed interestingly big-league though he's a Republican Pro Business Republican so you know that's a that is a tough tight rope to walk but I think it's really important if this starts to drag on. I don't think he would want to see how for sure how it would unravel the. Let's not forget this is very early and to Phil's point. We've got five to six weeks before it does become something. That's a bit more concerning so I think for right now. It's a great headline great for us to discuss this thing but this has to get a little bit further down the road before it becomes something that we're all concerned about is we kind of seem like we are two is point. There's no outcome that says you gotTA BUY GM stock. You're really it's just some that are very very difficult. I own. GM for a very long period of time virtually originally did nothing. I collected a little bit of a yield. I'd sell calls but it wasn't enough to perform. Should the company do if they wanted to change doing what they're doing. They're moving offshoring jobs. They're cutting their idling factories. That's what they're doing and it's it's a real shame. The president of the United States can't force a company that has a fiduciary responsibility to its shareholders. The company was bankrupt in the last financial crisis here. They're going to have to make difficult choices every step of the way they've had to do that for decades now to get out by the Trade Agreement at the US MCA that was passed requires more US sourcing and that kind of thing well. I mean listen one of the issues why that is the way that bill is not passed is one of the reasons why the president had issues us with these jobs that were in Mexico and Canada specifically Mexico. There was no confirmation about all the things that were built into Nafta and if you look at people at least dams who don't want to pass. Is it right now they're saying we still don't have those confirmations. We still don't know that the jobs are not going to be more competitive down there so it's really not a new NAFTA. It's just a you know. It looks like it did before. There's no way to really enforce a lot of this stuff to keep these jobs here so the car makers are tied with energy and the unpopularity contest today. No one wants to own. I'm Kelly Evans and you're watching fast money on CNBC. Here's what else is coming up on fat coming up market goal. Tony Dwyer says it's time to get off because we come out of many recession plus to Uber and lift finally beginning it in gear. Don't go anywhere fast. Money will be right-back. Hey folks. I'm sure you all know John Fourth Squawk Alley co-anchor but did you also know that he's got a podcast called. Fort Knox joined John's conversations with great leaders from Tech Sports Finance and entertainment to understand how they made it what they value and what makes them tick. This is something you can invest in subscribed today. Wall Street's tough. Day isn't discouraging. One of the market's biggest bulls. He believes investors should be playing offense because stocks are on the verge of a sustainable leg higher. Tony Dwyer is here. He's chief market strategist at Canaccord genuity. Tony Welcome and you're saying you think we have had some the mini recessions but they're over now and it's clear sailing on on the show a few weeks ago we actually we called for a correction classic strategy and I I called it right but we you know it's it's John the Airways so it was a few weeks ago that we thought that the sentiment got bad enough and that some of the data was already discounted that it was especially on the ten tenure no yield dropping the ten year yield. It was time to get more offensive so the supporting evidence to that in the mini recession call is if you look back at two thousand eleven two thousand twelve when the pigs were there and Greece was going to get knocked out of the euro and the euro was going to break up. That's as bad as a trade war right so the ten year. No you'll got back below one and a half percent percents what was interesting is not tober. Two thousand eleven the stock market bottom down nineteen point six percent the tenure didn't bottom until July of that year so in that meantime the S. and P. early twenty two percent led by the defensive into the ten year yield low in July off their you went up up and additional thirty eight percent two until the ten year got over three and three percent so the whole point here is offense should be on the field not because I have some great economic prognostication Asian but all signs are that the ten year made allow and if that's true it's replicating the two thousand eleven twelve two thousand fifteen sixteen period. Were there was clearly an industrial recession or are you making a call about the ten year going back to three percent or above or I think it will go back to two and a half percent. Nobody on the Planet Planet Kelly thought that we were going to go back to one and a half percent at this point ten years into a cycle right so what I think is happening is going back and looking at the nineteen fifty sorry to do it to you going back and looking at the nineteen fifties. There were four recessions from one thousand nine hundred forty nine thousand nine hundred sixty one. They were very brief. The market only went down about twenty percent each time time and then the market went rip into new highs very similar to now and I think technology just in time inventory. More consumption is a percentage. GDP is preventing that official recession but clearly were having these mini recessions driven by global industrial output and maybe hold argument over whether we are aren't going to have one on keeps confusing the picture because what's really happening. Is You have a bunch of growth scares you have quarters or GDP goes negative or almost goes to zero. You have market correction of ten to twenty percent but that's it's a different story than everyone who keeps bracing for. We're going to have another financial crisis in here. It comes again Tony. Let me ask you this. Though I mean think about what just happened in the last couple of weeks we've seen a major moderation in the talk about trade. We've seen massive stimulus in China. We've seen of stimulatory action by the. We've had this balance in rates. No one thought they were going to go down to one five or four or five or something like that. It just seems like we're in a spot here to get out of your mini recessions what we need to do ten years on from this economic crisis that we had. It seems like it's getting a little untenable isn't it. I mean that's the thing is it sustainable and the other point about getting back up to three thousand. It doesn't break out so what's the thing that breaks it out this time in a sustainable fashion. ECB totally disappointed in action last week there. They're coming. Terry in terms of what they were going to do to make sure that inflation got back to where they want it to be. As what drove rates in the market in the spike in the tenure they got ahead of it not by the raised by Blah Blah so I don't really care if it's twenty five or fifty basis points if they do fifty basis points on Wednesday and say we're done for the rest of the time. Market's GONNA get creamed right. They need to get ahead of the market. The highest interest rate cannot be the Fed funds rate right so what gets us over three thousand and that Dan again the the global economy's week. I'm not going to be the straps getting on here telling you oh it's good. It's getting less bad in the data. If you look at the purchasing managers there's breadth the purchasing managers index positive that's inflected off below the same thing with the OCD leading indicators competent leading indicators for the thirty six countries countries. They follow. It's inflicting off the low you can't have the market is a negative when you hit the highest level of all time but the sequential data's rolled over so that's a sale and then you hit the worst level fall time and the squinched out is getting better and that's a sale to right so. I think that the data is going to get better. Give us the playbook then what does it. What does it look like offense. I I mean Kelly. This is offense this everybody's meaning consumer discretionary financials industrials the motorcycle parts attack and again. This was our call from a couple of weeks ago where you get this reflation trade as long as the. Fed stays ahead of the curve and what shut this whole game people to put this on before their decision Wednesday. That's a big call. You make a caller. You don't know you know the views of fast money. No I'm not the greatest of all times but but again and the whole key to this thing is the Fed has to get ahead of the curve. They have to convince the market that we're not going to become Europe and go into negative I so I asked a salesperson today. Who I begged literally bagged two weeks ago. I did it on their please. Refinance your debt. Please one point four percent refinance your loan right right so I went over to the desk today I said. Did you refinancial no my my husband wants me to wait for lower rates okay. That's what the Fed wants to avoid read. Stop waiting for lower rates as low as it's going to get. Let's get in there so you know this kind of churning. We're seeing in the market today. I think has more to do with got extremely overbought in two two weeks right so maybe oil is an excuse and the Fed meeting who's going to really take an offensive playbook into bed meeting and I don't want. I don't want to suggest to to the to the viewers that I'm GonNa be calling the next tick. I'm awful at it. That's why should refinance. I think I think they they should refinance. You could have a pullback in rates. You know what's going to be interesting is to see how Saudi Arabia response to the oil crisis. You know it's not a news item or they blow up their biggest thing and they're like okay. We're good so I'm kind of waiting and to see what the global response is to the whole attack and that may create a temporary law. You can take advantage of and get offense. Thanks thank you Tony. Thank you so much there. what do you guys think while banks are interesting and you back out the December twenty four th loan and unlike Citibank cities traded between basically sixty and seventy seventy two on a number of different occasions over the last year and we've seen a pretty big moving city since Tony made that call from sixty one to trade it over seventy today I still think the banks sort of in rangebound and we can agree to disagree on that front but going to my earlier comment the fact again that the stock market I think held in extraordinarily well in the wake of what was pretty. We could have been really negative news to me is pretty encouraging and again. I'll say I'm this is coming from the sky and thank you all guys coming got uber and lyft revving up on upgrades today could a rideshare revival really be on the way we will ask plus pizza warming up to pitch one name that he says is a home run. Give us the name. What's more fast money right after this analysts. HSBC upgraded those ride hailing companies to a buy rating while lowering their price. These targets shares are up about three and a half percent of peace analysts at HSBC were saying both stocks down over twenty percent in the last few months. Regulatory concerns are already priced in everybody. Everybody are the roads all clear for Uber and lift you cancel that right. I don't know about all clear but you go back and look lifts quarter which was a month and a half two months ago into stock was trading sixty one or thereabouts rebounds. I thought it was a really good quarter. They basically gave us a pathway to profitability and the only thing that was sort of overhanging stock was exactly that this overhang in terms of shared shares he was the quarter when they said they were losing billion dollars because of all the you know the IPO related comp and all that and which of the and you go back to lift score quickly. I mean lift. I thought was a very good quarter. The problem was the two hundred seventy five million shares. Were coming out August eighteenth. The stock traded from sixty two down to forty one and you know what what the price action over the last couple of weeks. It's been good. I'm not suggesting it's going back to sixty two but I still think you can see it move from where it currently is to the mid fifty s I think when you look at the two names they are distinctly different and I would actually look I go towards lift. It sounds like that's direction. You're going as well Scott. I gotTa See Uber. Tell us what their pat. The profitability is we. We haven't seen that they just continue to burn up money us up two billion dollars. Whatever the numbers are the five billion that you just brought up butt lift on the other hand actually gave us a glimpse of hey look. We we see a path into the future where we start to get ourselves and make money. That's important to me because until you give us that why are we investing and I think that's why all these analysts analysts have been offsides for so long with these targets that are way up here and they're going to continue to ratchet them down. Kelly because that path is very very difficult. And when do they get there. We still you'll have no clue winner uber gets. What about the fact that Uber gives you. The UBER EATS option which lift doesn't offer and they're thinking party. Analyst argument here was look. You know you're basically getting that for free at this point. That's a losing endeavor as well right. I mean that that's so competitive so I don't even know that that at some point that's valuable but that that makes me also lean toward lift instead of you know. I was talking to early investor lift and told me that not only was that guidance really encouraging so the first just one post. IPO that they'd never actually missed an internal guidance that they'd given as a private company so they'd been guiding investors appropriately so I think when you get to their Q. You three in probably going to be in early October early. November and they beat again and now we know what the overhead supply looks like as far as the lockup. I think the stock doc gets back up to the high fifty. That's just my guess as long as they do that again in a nice lift colors over there Karen sporting but to me. I think you're play. It's a pure play on North American ridesharing if they continue to execute and show a path to profitability. That's the one you want to be and I can't really speak to where there's a lot of things going on. Even with the California crackdown crackdown and other states might be coming and I think the sentiment got really bad newborn last week gun on the halftime. Scott had bill gurley from benchmark early Uber Investigated Brad Gerster from from all timid or both of those guys seem really kind of geeked up down here about the story here and so these are geeked up higher to well you guys have been here for people not only did they not sell share and the lockup lift and probably uber but they're adding to these. I'm not speaking for those people but they're adding to them and that's what sort of action that you. WanNa yeah all right. Let's move on talk about Amazon as well look at the shares today under pressure following a Wall Street Journal report that the company has changed its search algorithms two favorite products with higher profit margins Arjun instead of customer relevancy bestseller status sold off nearly two percent today an Amazon spokesperson told CNBC. It did not change search results to include profitability. It did acknowledged. long-term profitability is a factor it uses when evaluating new search features. Bueller as we thought we were going to guy on this whole thing that you don't want them jumping in on this Amazon. I still look at Amazon probably the only guy in the desk who thinks it's this but I I look at it in an incredible valuation in terms of height of where it is so I'm a little bit not as bullish is probably most of the people on the desk. I've missed this run. I continue can you to miss the run because I still think this is a company. That's literally not what everybody thinks it is. This is a cloud company the best and the biggest that exists and this is all just just a side show on the other side of things so these things I think don't matter as much to me as the entire cloud world. Aws which is still came over Microsoft and overall there are a lot you could make the argument that cloud is actually less and less important when you think about the competition that's coming. Obviously the pike keeps growing up but their share keeps diminishing their profitability has stead been steadfast fats and that's one of the reasons why this stock is still around. That's where the money I understand but like I think back to this story what's really interesting. Is that this third party selling some of the deals they've done with brands like Nike on their platform. This is going to be the future of their business. Why did they buy whole foods. They're doubling down on retail. They want retail to become more profitable. They've we've used. Aws Profitability. They help them kind of sustained some of the losses and the other stuff but you know this is a company. That's going to do over two hundred billion dollars in sales. They are just percent of consumer spending and they have an avenue to become much bigger so to me. You know just low margin. That's the problem I I'm not gonNA the by it. You could make the argument if you pull up a chart. It just broke below the uptrend that had been in place from December. The chart looks broke into me so near term stories like this aren't good for and it only adds to the potential for regulatory issues because this is the sort of thing but a lot of people are going to Squawk to Congress about. I thought absolutely was what kind of scrutiny is it going to drop. Thank you all still ahead. Batter up stepping up to the plate to pitch one defense. Sake says is gearing up for a big breakout. He'll give you that name plus. Check out shares of Toll Brothers Today Day taking off and one trader is betting homebuilder has even more room to run. Don't go anywhere. There's much more fast money. After this delivering Alfa Romeo most important investor summit nine years running strategy from leading Alpha generators direct access to policy makers and government as leaders on September nineteen see his calling the shots now go to delivering Alpha Dot Com to attend this year's blockbuster event you will come away way with ideas that you can put to work in mmediately plus. Special Guest Vice President Mike Pence talks economy and trade war impact reserve. You're spot now at delivering Alpha Dot com welcome back to fast money markets feeling the heat to kick off the week with the the Dow breaking its eight-day win streak and just two of the major. SNP sectors closing in the green so if you're wondering where to get the Best Bang for your buck fear not our peanut Jerry stepping up to the clean his staff. Take it away well. This is a stock I actually even bought today and I'll tell you what I was getting more and more convinced as I was looking into the depth of the stock we saw some option activity tippety here but General Dynamics first of all the CEO who's been there and was put in as the C O two thousand thirteen stock moved from sixty six to one hundred ninety one since she he was put in place so that's number one number two is I love the idea of the aggressiveness towards Cybersecurity with the acquisitions ten billion dollar acquisition. That was made just just last year so I like an aggressive. CEO Who's actually knowing where this company needs to go into the future and that's exactly what I think she did with that purchase now when you look at the fundamental story here you you get a nice dividend yield. This is a stock that right now trades at about fifteen. Maybe a little bit higher than that a little lower than some of the competition although Lockheed if you look at a forward if somewhere very close but I see a lot of growth here as well some of the positives about the earnings and cash flow cash flow about three billion dollars a year very strong when you look at the earnings because that's grown over the last five years by about sixty plus percent and then you look at the revenues as well extremely strong so they're hitting it out of the park in my opinion. I think there's plenty of upside side. We talk about valuations that all the time about companies. This is a company despite the fact that the SNP is that highs take a look. This stock is not at highs. I think there is room to the upside aside for General Dynamics to get back into the two hundreds in the not too distant future by the way today. They were buying upside calls. The two ten strike calls to the upside so somebody somebody thinks that this stock does breakthrough two hundred. I happen to agree with them. Who wants a question question. You know I'm GONNA I'M GONNA agree with you. SAUTEE that ahead of time but what's interesting. This is not just an aerospace company beneath right now. You mentioned information technology in terms of revenue the basically doing the same thing as aerospace. You mentioned valuation. Shouldn't they get re rated. I'm not compare it to apple but the same way apple's being rated Russian general dynamics being rerouted as well I would I would be on side with that as well and I don't think that's happened yet but if if that does I think that actually does the stock even more guy. They've got four different. They have twenty five percent. Give or take in four different categories all of them very obviously asleep very close to equal not quite twenty five percents but close to that in terms of what is really driving this company you you hit on a couple of them. I like what they're doing. I think that acquisition was huge for for them and that's what really gives them a lot more diversity in terms of where are you going to get your revenue growth well. I think they figured it out all right now more questions. Let's get to the vote. Are you buying Pete's General General Dynamics Drum roll. Please Dan Yeah I'm buying. That's a good That's a good presentation. Here's a stock that obviously this cyclicality they do. There's some secular trends that they're doing. It's cheap stock. It's a mid single digits. EPS grower. It looks good Karen. Yes I'm not a great artists that defense from your football days. I thought it was a housing development housing development either way. I'm a buyer I like to pitch defense to put the guy just say yes on make it easy for you. Say you know we bought him out in. December like many stocks did. I don't know if we're going to retest the old highs back in March eighteen but I think when you get close so I say I'm me guess buyer here on. GD take a Bow Pete Bear Toni Braxton Bragg's. Yes the death because boated but are you at home buying piece. Pitch General Dynamics you can vote right now in our twitter poll ad Ed. CNBC fast money and we'll reveal the results later in the show plus check out our Kramer Cam. Jim Is laying out his big winners and losers in today's huge oil move do not want to miss his take on today's developments. That's coming up on mad money top of the hour. We're live here at the Nasdaq in times square much more fast money still ahead. Welcome back to house money and check out toll brothers up more than five percent today breaking out to a new fifty fifty two week high and surging to double digit gains in just the past week. Bank of America upped its price target on that homebuilder only from thirty eight to forty. We're over forty already today but that call also the options market into a frenzy. Nathan is here to break down the action. Yes so this is interesting today. You know usually you don't see this sort of activity on a broker raising price targets. It's on a group of eight go back. A little bit to a Tony was saying about playing a little offense here with this kind of rape move. You know here's the deal call volume or total options volumes fifteen times the average daily volume most of that was in calls today. Traders were buying calls right out of the gate when the stock was thirty nine bucks. Have the stock closed up forty seven six so this this morning was traded thirty nine bucks. They were buyers of the October forty one calls. The largest block of the day was a by eight thousand of those for forty three cents. Those obviously appreciated a a lot throughout the course of the day looking to play for some higher highs here. Let's go to the charge real quickly. Look at the one day charter this thing like Kelly just said new fifty two week. Mike Hi look at it on a two year basis this stock and the group in general we're down a whole heck of a lot that forty one or forty ish level was Kinda near-term technical Nicole resistance a level. It had not been over obviously as we said in over a year but look to the upside the stock was trading as high as fifty at some point in two thousand eighteen. Sit cheap cheap stocks trading about ten times. We know that obviously these aren't huge growers bid low single digits earnings and sales but if you think that there's kind of so supply demand dynamics that were just shaking up by this rate move. That's why these names are moving lastly right there. That's implied volatility. The price of options in toll brother's got really cheap into this consolidation. The stock had been in over the last few months so making long premium. Directional bets in options was a good way you to do it and I think that's what traders were thinking today. That was a big move. on the close appreciated. Dan For more options action tune into the full show this Friday at five thirty PM eastern time but don't go anywhere because up next final trades. It's time for vital trade before we go L. Let's go around the horn. Kick it off. We had some monstrous buying dish today. NFL tickets go browse Karen. Yes final trade actually was the final trade that I did today buying some more S. and P. Blitz. I think Vick should be higher on Dan. yeah lift really feels like it's trying to bottom here in the mid forty and guy you have fun. Did you yeah I don't see anything to all the hard work. I just say go around the horn. What's next excellent point. I think they're actually treadwell. Da Elder sister excellent guys. Thank you all very very much just spent a lot of fun that does it for us. We'll see you back here tomorrow. At Five mad money with Jim Cramer Begins Right now at Matthews Asia we uncover unique companies across Asia prime to benefit from consumer. We're trends that broader international funds myths find out what a dedicated allocation to Asia can add to your portfolio at Matthews Atia. Dot Com slash opportunity.

Kelly Evans Fed Dan Nathan Jerry Karen Feinerman US GM Saudi Arabia Tony CNBC Sir Carter General Dynamics Tony Dwyer China Ford Toll Brothers IBM General Motors Jim Craig