tv Fast Money CNBC July 27, 2015 5:00pm-6:01pm EDT
i'm perfectly happy with it. >> that's your carpool. thank you so much. that does it for "closing bell." dan greenhouse, stephanie link. "fast money" begins with melissa lee and the gang covering the fallout after china's stock market had its biggest one-day drop since 2007. >> "fast money" starts right now. live from the nasdaq marketsite overlooking times square, i'm sara eisen in tonight for melissa lee. our traders on the desk are tim seymour, pete najarian, karen finerman, excuse me, and guy adami. tonight on "fast" could the turmoil in china be spelling serious trouble for america's most beloved stock, apple? we'll talk to an analyst who was just on the ground. plus one of the best technicians on wall street has one chart that is pointing to much more pain ahead. he'll tell you what that is. but first to this market move. the dow falling as much as 150 points today on the back of that sharp sell-off in shanghai.
ugly off 8 1/2%. is the selling fully china-related here in the u.s. or o'could there be something else, something bigger and deeper perhaps, guy? let's start with you. >> tim talking about china, i think it has a lot to do with china. when the market's down 8% on top of the moves we've seen over the last couple of months it has to have something to do with that but i also think it's somewhat technical in nature. i think earnings have a lot to do with it. i think earnings have been okay but i think the chasm between eps and revenue continues to grow. i think technically the market's done everything right until last week when we traded back up, tested you will-time highs, seemingly failed, had an outside week in the s&p without getting too wonky, now we're going to test again those lows we saw last week or so, 2042. if it holds there, off to the races. if it fails we have to have another conversation quickly. the russell, the iwm, 121 has been the level, closed lower today for the first time in a long time. >> was china the excuse to -- >> well, welcome, sara eisen. i don't know that it's necessarily the excuse today.
it clearly is a big part of what people walked into. if you look at the volatility index, pete can talk about that, we're kind of at levels we've seen in three months. that's in a place where you then trade higher but people are imputing commodity prices upon the global growth story. i don't believe that price is truth, especially when you talk about oil. oil demand's still going to be up 1 1/2 million barrels a year. copper is being priced as if this isn't probably the one commodity that's the most supply-demand imbalance. so copper as guy said -- china as guy said, you can't come in and see this kind of a move in a major indice when also the people's bank of china has indicated they're there to defend it and then the whisper last night was they were stepping away from their own market. that's unsettling when policy makers look like they're panicking markets start to payne. >> that's been the whole worry throughout this china sell-off. unclear, karen, what the trigger really was for the china move overnight. but how much do you think it's affecting u.s.? >> i do think it's affecting us. there's a few parts to it. there's the movement in the indices, which those are very big moves.
obviously had a huge move up and a huge move down. then the other part of it is what's happening in the underlying economy? and those may be two totally separate issues yet both are scary because i do think a lot of data shows the underlying economy they're slowing. so you know, i'm somewhat concerned. we are long biased. and i stay long biased. but i'm concerned. >> pete? >> you know, when i'm looking at the volatility index it really does say something. when you just go back a week ago the 22nd we were trading at 1205 and here we are today now trading and we actually got over 16, we're over the 50-day, over the 200-day. it says a lot about the zmim sentiment. we're not just talking about a move in china. 8 1/2% move, 7% move. these are moves to the down side that are massive, significant beyond words. the fact that not only the commodities but the rest of us are following along makes a little bit of sense to me. actually it's pretty impressive. you look at the spider sitting on the 200-day moving average, financials, health care. those have been the areas in this earnings season that have been absolutely those that have been leading the way.
you look at citi and jpmorgan and morgan stanley all those names, you go through the health care names as well, they're both signature on the 50-day moving average. they've pulled back as well. i think we're sitting on an area that really is something where you ought to be concerned, you should have been buying protection. we've been pounding the table -- >> that's kind of it, where have you been. there's nothing here that hasn't been going on for months. and if you remove the m&a activity in biotech and in pharma and in health care and then certain parts of the tech world you really don't have a lot of reasons why even those places that are showing leadership should be. the financial sell-off to me is the biggest concern because this is the place where i think people are able to one price in better earnings power. multiples were the most attractive within the snch s&p. and a yield curve that was rising. and look where the ten-year is now, breaking down and bond yields telling us something as well. >> don't you think that was the move? >> 100%. >> the dollar weaker -- >> everything is at a critical low -- from the russell to the tnt. the ten-year, 2 1/4 as we went back higher in rates was
resistance. it blew through, went to 2 1/2. what was resistance becomes support. at 2 1/4. now we're back through it. i still think yields go lower. i think tim and i would disagree as to the reasons why. i think it's deflationary in nature. with that said i don't think it augurs anything particularly well going forward. getting some deflationary signals in commodities. we'll give you that. speak of the market sell-off the s&p 500 briefly dipped below its key 200-day moving average. is this a signal for more pain ahead for stocks? carter worth is cornerstone macro's head of technical analysis. he's checking the charts at the smartboard. what do they show, carter? >> sara, thank you. three things i want to look at. just the chart of the market itself. all the moving average is is an automated trend line. meaning obviously the market's been ascending and of course our moving averages are ascending. i've got both the 150-day, which has a higher hit rate in back tests and the 200. you can use whatever you'd like. but we see quite clearly the purple line being 150, that it seems to be the closest one in terms of measuring trend. and what we know is that despite
the ebola swoon when both didn't help us we've tracked the 100-day quite closely but the very issue of trend is now in question. essentially these lines are flat. we're basically not in an up trend anymore, but internally it's really worse than this. so two pictures i would show you. just a week ago we were within one point of making a new, yet new all-time high in the s&p. and yet the total number of stocks making new 52-week lows is surging. and then made again a surge last week. so we were within a fraction of a six-year high, all-time high, and yet new lows exploding. that's not a good internal argument for the market. and then i think this is maybe the most telling chart of all. a two-panel chart. the top is the s&p, the up trend that is or isn't in question. but the bottom panel is back in the locker room, meaning this is the scoreboard on top. this is a bit like the cavaliers, lebron james. this bottom panel shows the number of players on the team, the number of stocks in the s&p
that themselves are in up trends. as the market has made new highs for 13 months, each new high has been achieved with a lower percentage of stocks themselves still in up trends. so what we have is again a few big names carrying the team. and now we're starting to lose them. apple's in question, certain biotech are in question. so if you lose your leadership and your weakest players get weaker, energy, materials, industrials, who puts up points for the team? that's the problem. >> yep. certainly a concern. thank you very much. carter worth. let's trade these comments, pete. clearly breadth is more and more of an issue. >> we were talking about volatility. the one thing i would focus on right now, i look at these financials. we talk about where was the leadership coming from, health care and financials. i look at the financials individually. george, citi, you look at these names, morgan stanley, they're all trading with implied volatility that's below historic. i know the volatility itself for this s&p 500 is higher, we were just talking about that. these are trading extremely low. the news is out. because of the fact they've already reported earnings.
if you want to play these names i look at jpmorgan around 68 right around the moving average. i think that's the way you play it. through the options, not through the stock right now. >> guy, i kept sthig of the fang, which is the jim cramer term for facebook, amazon, netfl netflix, google, these big cap tech stocks that are driving the major averages and everything else isn't catching up p. >> and facebook we're going to hear from. i still think facebook blows through $100. we traded closer last week. let me push back in terms of the financials. there's one financial we've loved across the desk for a while that is not participating and today had a really lousy morning, came back late and it's been blackstone. you wonder what's going on at bx that the stock seems to -- or people that are trading the stock seem to see that the rest of us don't. has not traded well now for months. i'm wondering if blackstone is trying to tell us something about the financials going forward. >> my guess on blackstone might be pressure on fees for this model. i don't know. because they've done an extraordinary job no doubt. >> they've got a cfo going over -- >> that's the other thing. real quick, that's interesting
when the cfo, the heir apparent to blackstone rung the whole place leaves to go work for air bnb, a lot of interesting things going on there. >> there's a lot from wall street tech companies reporting. finally to you, carter worth. do you have anything to say about the financials moves? >> we've had some leadership beyond just tech and apple and others. of course financials has been one. health care in general and certain consumer. but just as implied in your conversation, we're losing a little bit of steam in financials as well. each day some of the things we've counted on are starting to falter. enough of that and you just don't have the energy to move higher. >> thanks very much. we'll leave the conversation there. thanks to everyone. up next, stocks sold off hard today, but there was one big cap tech stock that actually held on to its gains despite the downturn. we'll tell you what name it is and whether you should be buying it now. plus teva out with a huge deal for allergan, and meg tirrell is here with a very special report on the biotech name that could be ripe for the next round of
takeovers. we'll see if there's any left. she's naming names. and later, could the magic kingdom be on the verge of getting a little more magical? the comments disney ceo bob iger made about disney maybe looking to buy more. we're talking acquisitions. who should he buy next? much more ahead on "fast."
earnings alert on baidu just out with its earnings. josh lipton in san francisco with the details. >> sara, when it comes to baidu market pros ask are investors willing to stick around and see if all that spending the company is doing pays off? not if the action after those latest earnings report is any indication. baidu had already been under real pressure heading into this print. the stock, the chinese search giant down more than 13% so far this year. now it's down a lot harder. at least part of the worry, all the spending baidu does on mobile and offline services. remember, baidu allows users to both search and buy items such as movie tickets. it's one way the company tries to differentiate itself from
rivals, but that spending can also pressure results. baidu just reported q2 earnings per share that beat but revenue just in line. expenses rose sharply, surge 81% year over year. and that was mostly because of promoting those same offline services. turning to q3, baidu guided for third quarter revenue that ways bit light relative to expectations. on the conference call expect questions about the outlook for spending, mobile monetization, how those non-search businesses are doing, such as baidu's travel and video sites. sara, back to you. >> thank you for running us through that report, josh lipton in san francisco. tim, brutal afternoon. you're long this stock. >> i'm long the stock. and i've been long the stock for about a year and a half. i've trade add round a bit. i've got an average cost around 160. what i'd say about the 180 level, very important level, and somewhere just below here i would maybe take some chips off the table because nothing has changed on the story here but i do think that the stock is stuck in this gear. it's a show me stock. having said all, that i think this is a very, very, very good company and a very good valuation at 28, 29 times.
they're stim growing about 40%. everybody know sg & a was going to go higher. there's no big surprise here. they have to invest in their future. they are dominant. if china wasn't selling off this wouldn't be a move. but again if you look to today as the close it's a $20 move on the stock. a 10% move ultimately that we had today. i'm not jumping out the window today. nothing has changed. >> it's sort of a double whammy right now because they've got the macro concerns where everything china sells off and the margin problems here. >> right. and i think the one thing i'd ask tim is does it concern you that they've broken through? they were at the 200-day and now the 50-day. now well beneath that. and you almost wonder is this a time to maybe take the chips off the table and come back another time. >> that's why i brought it up, because to me the level -- 180's the level where i could take a few chips off the table. i think you should have some stop levels, especially if you think the stock trades as technically as this one does. 205, then 200. now 180. break of 180 be concerned. >> gene munster likes it of piper jaffray for what it's worth. a rough day for the social
stocks. that kicks off our top trades tonight. the entire group feeling the pain. facebook and twitter ending lower by more than 2%. both companies reporting earnings this week. guy, we've got twitter tomorrow, facebook wednesday. >> and linkedin on thursday i believe. let's go in order. twitter tomorrow, $35 has been the line in the sand. yeah, i know it closed below there today but basically right in line with 35 bucks. everybody is expecting a disaster which they'll probably get. but if it's not a complete disaster i do think you can see a relief rally in this name. i think you stay long it against 35. facebook is actually sold off since that 99 and change high we saw a couple weeks ago or last week. i still think facebook, the metrics of facebook, the last six quarters have been unbelievable. their move to mobile outstanding. that goes higher. and linkedin their valuation is ridiculous, i don't think it can be replicated. some people upgraded the stock. 250 price target. gun to my head i'd rather be long the stock here. >> these are going in totally different directions this year. >> couple things to look for tomorrow this year is the ceo search situation. i don't know if we'll get any update there.
and then i don't know if we'll get any comment on whether or not they've been approached by anyone. that's something that's obviously been thought about a lot. is jack dorsey just here as an intern while they look to sell it. but i think, though, if the numbers are bad enough it will trade down. beyond what you think might be the floor. >> wouldn't this be a good quarter for them to just throw -- >> a kitchen sink kind of quarter? yes. actually it would be. and maybe they'll do that. if you're listening it's a good time. mark everything down. facebook i think it would be great. although as guy said it's had such a run on nothing it's hard when the bar gets raised so high as you go into earnings. >> next up green mountain. big day, big name, and a big gain for this one on the back of a call from goldman sachs late friday reiterating its buy rating on the stock saying that the stock at its current price offers compelling buying opportunities for its investors. we should note since the start of 2015 this stock is down more than 45%. tim, you and i have talked a lot about this. >> i'd probably be talking --
i'm not long and i probably talked about being very constructive on the stock at 125 and maybe even around 90. there are some key levels on the stock. what goldman is saying is the risk reward, if you look at the total value of this stock, is around 60 bucks. worst case scenario coal does nothing. the installed base grows at zero percent and the margins get worse. this is where the bears are lining up. i say cold is -- and this is their ability to sell the cold drinks and also combine the hot stuff. the coke partnership to me i think is a big driver for this name. i think they have to increase their stake. i think coke needs to be in this space. and i think it's an exciting time. i think there are catalysts for the stock. the valuation -- they trade at the low end in even staples right now. and i think it's got-tone a place where the thing -- and this is what goldman's saying. they're saying this stock is cheap on a -- >> they use asymmetric up side risk which is analyst talk for very cheap, right? >> i think the concern is it's very cheap but can it get any cheaper? without coca-cola getting more involved i think this name is just death right now. >> is it cheap enough for coke
to buy outright? >> these the one potential -- >> do they need to? >> i think coca-cola's done a nice job of getting themselves in all kinds of other areas. i don't know if necessarily this is one of the areas where they see as much growth as they do in energy drinks and milk and everything else what they've been investing in. but i'll tell you what, implied volatilities are through the roof. this is not one of those -- if you're going to buy the stock use this as an opportunity to sell some calls up above against it, turn it into a buy rate. at least it cushions the down side. >> they have had some missteps. coming up teva's $40 billion deal with allergan, is this just the beginning of a huge onslaught of m&a activity in the biotech space? meg tirrell's going to be naming names for us next. and while we wait for that here's what else is coming up on "fast." >>. >> announcer: that pretty much sums up china. and we'll tell you which mega cap tech name could soon feel the pain. plus, is disney on the hunt for acquisitions? we'll tell you what disney boss bob iger said about the
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business, aesthetics, eye care, g.i., women's health, urology, infectious disease, these are higher margin higher growth businesses for us and so now we can double down, build those therapeutic categories up and also look for future transformational deals like we did the allergan deal. >> that was the president and ceo of allergan earlier this morning on "squawk box." shares of teva and allergan soared on news that teva will acquire allergan's general ericks unit for $40.5 billion. that acquisition solidifying teva as the number one maker of generics and as you heard from the ceo gives allergan flexibility for a few acquisitions of its own. who could be next? time for a little stock therapy with cnbc's biotech reporter and resident therapist meg tirrell. busy day for you. >> it has been. the question everybody's asking as you just alluded to is what is allergan going to do with that $33 billion in cash it's getting from this deal? part of it is in stock. it's going to own 10% of teva after this. there's a couple names that have
been talked about a lot today. people saying allergan is going elephant hunting. this is a phrase ronnie gallop at bernstein used. the names he mentioned are amgen, abvee and biogen. and these are really big names. biog biogen's a little smaller after last year. folks thinking that as they're getting oust generics they want to get into the higher margin business where they're trying into vat and get meta reimbursement for their drugs as brett saunders was referring to there. you actually saw amgen's stock trade up about 4% today on this. the flip side of this is perhaps allergan is actually trying to shrink itself into a nice package to sell to pfizer. and of course pfizer's been looking for a deal since astrazeneca last year failed in the $125 billion bid trying into vert to change its tax base into the uk. this could potentially give it the ability to do so in buying activists with now allergan, branded drugs because they already did that big deal to buy haspira and generics. those are did-two ways allergan
could go here. people say that brett saunders known as the chuck norris of pharma m&a is going to do something big. >> that's a pretty good nickname. >> he's the best thing that ever happened to biotech m&a for bankers ever. >> chuck norris? >> no, brett saunders. >> even better than mike pearson from valiant? >> i don't know. >> where are we in the cycle of health care m&a? it's already been such a frenzy. >> it's hard to believe that it could continue or even accelerate. but that's what it sounds like from all the deal talk we're hearing today because not only do you have what allergan could potentially buy but then we have mylan and pergo still left there and you're wondering what mylan has to, do does if inkras its bid to lock down perrigo and could perrigo lock down a sale to get a better buyer than mylan? >> mylan was down double digits. >> long mylan, long teva which we call a texas hedge, as teva dropped their bid for mylan but was rewarded i guess, good earnings on the street. liking this. but it seems like as long as the street keeps rewarding large
acquisitions even if they're dilutive, even if they're expensive, why not continue to do it when you have those huge cash hordes? >> it is interesting to see the acquirer being rewarded. >> this deal sounds so friendly, right? these guys -- the head of generics ran allergan at one point. lightning the mylan deal -- i think people are throwing a premium on this deal because they think they can work together. >> guy, what's your trade? >> pete has talked about ways to play mylan vis-a-vis options i'll let him do that but i think identifies yers interesting. pfizer's definitely in the game. the stock's traded well in the last six months. i think mylan down here is big. i don't think there's any way anybody buys amgen. a 10% premium on their market cap makes that $135 billion deal. i don't think there's any shot of that happening. that said i think amgen should have gone up regardless of this. i think valuationwise it makes sense for a lot of different reasons. >> and the valuations are going higher and the deal prices are going higher as well we should note. thank you, meg. our resident therapist meg tirrell. up next will the carnage in china continue? we're counting you down to the open in asia and taking you live to hong kong right after the
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welcome back to "fast money." u.s. markets taking a hit today after chinese stocks were slammed overnight. all three indices falling with the dow closing at a six-month low. the s&p 500 about 3% off of its closing high. here's what's coming up in the second half hour of "fast money." disney ceo bob iger says the company might be going shopping, but who is buying? the traders give their top picks for what could be disney's perfect match. plus twitter earnings on deck for tomorrow night. a top analyst explains why he thinks the stock is in trouble after this report. that's later in the hour. but first we start with china where stocks plunged overnight. the biggest one-day loss since back in february 2007. we're now about four hours from the market open there. let's go to cnbc's susan li in hong kong. susan? >> hi there. yeah, sara, we're just four hours away. it was quite a dramatic day yesterday. i should remind everybody we did come off six straight sessions
of gains. we're up close to some 15% from the trough as we saw earlier this month. then somehow all this panic selling, this liquidation taking place in the afternoon session, we had 1,000-plus stocks. limit down 10%. big oil and bank majors down some 10%. and the reason i'm hearing all this selling was triggered was apparently the china finance securities regulator, or the one that's been buying up all these shares, apparently they were concerned they were running out of money. so they had to liquidate a few positions and sell off to repay some of the interbank borrowing they've been doing. this news hit the market and a lost retail investors because chienate mainland markets are 80% retail driven. they got wind of this and thought maybe the government wasn't going to proup the market anymore and hence we saw this massive selldown. we also had some technical levels as well because there was a bit of resistance trying get above the 100-day moving average for the shanghai comp and some say if we didn't get above that level after six days of rallies,
well, it's going to be tough to get above there. also we had some poor economic data as well. industrial profits were down compared to the month before. things are not getting better in china. this comes off that pmi number which shows a 15-month low. and they had the shrinkage and the trade surplus. things were going the wrong direction yesterday. people thought it would be safer to take some money off the table. >> susan li in hong kong. thanks for running through that for us. pete, the headline in the south china morning post is china support measures crumble. >> whether it's real estate, whether it's equities, everyone's been talking about bubbles over here for quite some time and whether or not the government's completely propping this whole thing up. and i think we all have our own opinions on that and everybody on the desk might have had some concerns. i think we should have concerns because we are seeing what's going on over there and obviously one of the names everybody likes to look at is apple. how is apple affected by this whole thing in terms of china right now? certainly you have a huge number of sales over there, but actually the americas are still where apple has the most sales.
it's something where you're leaning on the growth, you're expecting the growth, and i don't think necessarily the growth shows any signs of slowing, at least yet, over in china. >> we're going to get to the sectors in a moment. but guy, there is a difference in terms of the materials. it seems like the materials and the energy and the commodity stocks are getting hit hard on the china news than some of the retail and consumer stocks. >> the poster child for global growth, specifically china for years, had been freeport mcmoran. look at that stock today, down 7 1/2%, probably trading at -- it's got to be close to a ten-year low. at a certain point it makes sense but they seemingly push the buttons at all the wrong times in terms of acquisitions over the last six or seven years. freeport mcmoran, you'd love to pick a bottom but it's been very hard doing so. i think it has further room to the down side from here. >> talking about apple and china, sticking with that theme here, we're talking about what -- brian blair, excuse me. managing director at rosenblatt securities. he's got a buy rating on the stock. brian, thanks for joining us.
that is a big question, because apple has -- china has been a huge and very important growth driver for apple. the executives played it down on the conference call last week, but is it a concern to you? >> you know, it's not a concern right now because apple is doing so well over there. i mean, you know, all their key metrics are growing. iphone units grew about 87% year over year. their revenues were up over 100%. and the revenues from china are about 27% of apple's total revenues. so clearly a critical market but you know, as was mentioned earlier there's been no signs of a slowdown. they're outgrowing every metric that's available right now in china. they're doing well on the app side. they're even doing well on the mac side even though units are small. we're certainly watching the consumer over there. but as of right now there's no reason to be concerned regarding apple's position in china. >> it's karen. let me just ask you something. sounds like you're positive on apple. where do you think the stock should be trading right now? >> i think until we see a catalyst because they were a little short on iphone units last quarter i think until we
see a better iphone unit the september quarter it probably deserves to be trading right now in the kind of 120 to 130 range. but i do think if they show a better september quarter and they have a strong guide on what looks like solid momentum still for the new 6s and the refresh of the iphone 6 that the stock can move toward the 140 level and that's where my price target is. but they need to prove it now because this last quarter iphone units were lower than expectations. they gave some reasoning for it but i think they're going to need to really show the street that they can continue to grow iphone units. and that december quarter's also going to be critical. can they beat last year's number, which was a massive 74 million unit number? >> brian, i would argue that even apple china is a reason the broader u.s. stock market has sold off because everyone has imputed chinese consumers are no longer going to buy apple phones. are you categorically saying as best you can that it's either too early to see a china sell-off from their stock market implosion to apple's growth and if you feel that way where do you think they can continue to grow to the last couple years?
100% was an enormous quarter and i'd love to know what you think. >> right now i am saying that categorically, but it's not my own opinion. last week at rosenblatt securities we did a call where we had a number of people from china merchant securities in hong kong that cover china and cover the broader asia market and it's their view thus far there has been no change in china consumer spending in spite of the volatility we've seen in the local markets over there. but it is something to watch and it's something that people are going to be monitoring weekly because china is such an important consumer. not just for apple but for global consumer electronics broadly. it's a very important market to watch. but as of last week no change in consumer sentiment as far as we've seen. as far as growth opportunities, you know, apple's market share is still relatively small. the iphone's still in the teens in terms of the overall market share of the smartphone market in china. their opportunity is to grow. will they continue to grow 100% year over year? that can't last for very long. but i think we can still get
growth rates of 40%, 50% if the iphone continues to do well. and think about it in these terms. the large screen iphone 6 has only been available in china since september of last year. it's new. and the local consumer doesn't care about small smartphones. and apple's really only been in this large screen smartphone market since september. so it's still new. >> yeah. separate question away from the macro but relating to the china business of apple. there were reports that the police busted a business that were making fake iphones in china worth $19.4 million, more than 41,000 fake phones and 66 fake ribbon cables. is this a risk of doing business in china for apple? >> you know, it's a continued risk. but consumers over there know when they're buying a real apple product and a fake apple product. what's happened for the last five years as i've seen it in shenzhen and when i've strafld in hong kong is sometimes even before the iphone comes out there are replicas of it. but the hardware's not the same, the software's obviously not the same, but it's a way for people to look stylish, to look like they have the latest thing
without paying up for it. so i don't think that's a real risk because the chinese consumer is very savvy and they know when they're buying the real thing. >> brian blair, thanks for joining us from roens blat securities on apple. let's trade this on the desk. pete, is this a buying opportunity? >> i think it is. these dips, and we've seen it before, it's come down to the 120 level and i think that was an opportunity after post earnings. we saw it rally back. now we're seeing another sell-off. but i think to brian's point it's much stronger than folks i think are giving it full credit for. we'll find out next quarter. the refresh cycle still very much the early stages as hes with talking about in china specifically. the americas, we still were growing at 15%. so very impressive. >> we haven't even mentioned the watch, guy. >> no, it's interesting about knowing the chinese consumer -- i just bought a great prada back out on the street. it's amazing. dirt cheap. it was 30 bucks. it's incredible. >> authentic. >> yeah, baby! >> nis use ce use of fugezi. we don't get that all the time. >> if it closes beyond 120 you
wonder if it's going to round turn and trade back around 105. >> you have good taste in prada bags. >> no doubt. >> now we'll talk about this. what else in the u.s. could be impacted by a weaker chinese stock market and potentially weaker economy? tim seymour has three stocks that could get hit. >> ultimately there are three main sectors that i would argue have been the greatest beneficiaries of the china free lunch. if the free lunch is over, watch out for luxury, watch out for retail and watch out for auto. let's quickly look at tiffany, which to me is kind of the poster child for all the u.s. multinationals that at least in the luxury space have seen. this is a five-year chart. tiffany has gone from 30, 27, all the way up to 70 where it's at now. but you've got a case where the multiple on the stock has increased dramatically. nike, number two, this is a company that everybody hears about the wellness and the fitness craze and how nike's stealing market share but actually growing the margins. if you look at nike's margins in china, 32 1/2% versus 22 1/2% in the u.s. everybody's assumed that the
chinese consumer is really what's allowing nike to rerate. and finally look at general motors. it's a case where here where i would argue that the chinese auto market is the most important in the world. gm has a partnership with seic. they too think this is arguably one of their most important markets. they just had numbers out. they were decent. they came in at 4.4%, which was a little better than people expected but those numbers were down. if you look at vw, for example, in europe, over 50% of their sales is china. the chinese auto market, some will argue will be 35 million in vehicles by 2020. this is a company that's been heavily reliant on it. so the question is is the china period going to be something that these stocks are pricing in? you can make an argument that gm's move here is something that's already started to price this in. again, we started getting a lot of the xhienz augchinese auto g numbers before the u.s. numbers. i would make an argument you have to worry about it but the companies trading at premiums relative to their history are ones that would be the most concerned about it. i go back to tiffany i think that's a chart you don't need to
buy today but the luxury spend if you think about this, the 100,000 to 2 million in liquid net that the chinese consumers have that are spending for tiffany will be double the size. that will be a $52 trillion market in the next 20 years. that's something that's not going away tomorrow and i think you'll have opportunities here. >> and also the tourist spending of the asian consumer, when they go around to europe and the united states as well. we'll leave it there. thanks, tim. still ahead, bob iger hinting today that disney may be looking at another acquisition. we'll break down who may be on disney's shopping list right after the break. plus it's not just twitter earnings out tomorrow. we'll reveal the one stock on deck that could be in for some major trouble after its report. much more "fast money" straight ahead. can a business have a mind?
i wouldn't rule it out but i don't think you should take that to mean we're looking at doing that. our siv in terms of acquisitions has pretty much been in the direction of our strategic priorities, which is let's buy content, high-quality branded content. marvel, pixar, lucas obviously good examples. let's buy technology where it gives us an advantage, where we
can use it to dot things i talked about earlier, and let's buy things where it can give us a better or larger global footprint. >> that was disney chairman and ceo bob iger discussing future acquisitions in an interview earlier today with "squawk box." which companies should disney look to buy? let's go around the horn with some names that could be on disney's shopping list starting with you, tim. >> i think it's sony. when i look at sony's business, it complements them. first of all on the gadgets side they can get rid of the sony electronics but certainly in terms of the games this is a great place for all the disney characters. the distribution as bob iger said, use some of sony distribution, you've got a huge footprint, that would be very beneficial. they've already partnered in terms of content on marvel. something disney has effectively leased. why not take the whole thing down. with spider-man, that is. it's a thing where the companies have a history of working together in terms of content. why not make the full splash? you never know. >> that would be a big for x trade, dollar-yen. pete, what about you? >> talking about buying technology and i look at electronic arts. so many different synergies
here. when you look at the cross-licensing, the ramping up of gamings, obviously disney's already got the exposure with espn. they're already on the sporting side and the margins here are absolutely phenomenal. a business that was going out of business is now back in business and i think electronic arts would fit in very well. >> karen? >> he talked about branded content. and to me discovery would be a name that's interesting although i think it's pretty expensive. it would actually not be a small bite, even for disney. but discovery channel, animal planet, those are names you could see as sinnar gist wik some of the other properties -- >> bambi and dumbo. yeah. >> slaughtered animals. both in animation and -- my choice would be discovery. and it would not be dreamworks, which anybody could have bought. it's been for sale for a while. wouldn't be that. >> guy? >> lionsgate. it's probably too edgy for disney. but espn was probably edgy at the time. lionsgate makes sense in terms of distribution, in terms of their content. not a ridiculous valuation. big short interest. now vice chairman michael burns has done a great job there.
i think lgf would be interesting. they report august 7th i believe. i still think the stock goes higher. >> how about new talent? don't they need to acquire that first? >> pete najarian's new talent. you ever see him do sports? >> i'm not new anymore. >> acquire you. that's their next deal. check out these glamour ipos as we're calling them because fitbit is up 119% since its ipo just in june. shake shack up 147% since its ipo in january of this year. so i guess, guys, the question, if we are in for some type of broader sell-off, do these names -- they're the brunt of the selling. >> i think the two names are so distinctly different. when i look at fitbit this is a company that came, i'm oed with earnings and this is a company that has earnings. and if you look at their forward earnings somewhere in the 50s. you look on the other side, you look at shack, there's a limited number of stores in existence so far and you look at their earnings they don't have any yet
and their future earnings are somewhere in the 300s. in terms shack we might love the product we might not want to buy the stock. >> it's a momentum name. whether you want to call it a fantastic growth company, they are doing a phenomenal job and people try to compare them to a mcdonald's or even a yum. and i think it's apples and oranges frankly. but in this market if you have a stock where people have some gains, i think there's a lot of guys in shake shack that are late to the party. they'll be very quick to pull the trigger on the day the s&p gap's down. 680 market cap, no. >> a sign that we're in this sort of growth-starved world. >> no doubt. >> the question is does that continue? >> shack is probably not the name for me. fitbit, though, i get the valuation. but pete pointed out that on revenue and earnings guidance or growth it makes sense and it's a huge short interest. it has sold off a little bit. here's a name that reports i believe on august 15th give or take. i think if you get it around 40 bucks i think you buy it into earnings for the short covering rally i think you're going to see. >> you wore a fitbit, too. >> i did. i think you might do a little
ditty on that. me and b.k. went head to head. that's our tease. >> all right. still ahead, twitter down more than 30% just in the past three months. could earnings lead to more pain ahead for that stock? all the details ahead of earnings right after the break. more "fast money" straight after the break.
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welcome back to "fast money." social media stocks take center stage this week as facebook, linkedin, yelp all gear up to report earnings. twitter kicks off the flood tomorrow when it reports second quarter results after the bell. we caught up with pacific crest senior analyst evan wilson to find out the three things he'll be looking for from the company. have a listen. >> this is evan wilson for "fast money's" "earnings edge." twitter reports tomorrow night. three key points that we're looking for on the call. first, how many monthly active users do they have? our estimate is for 5 million users. expectations are pretty low there. second, how fast can they go in q3 and what will the guidance be? the street's currently looking for 15 1/2% growth. and number 3, any updates on the ceo search. we don't expect a ceo update or real hire until q4. but looking for any details they can give. so net net i think it will be a mixed report for twitter and
really are focused more on what the new ceo will do once he or she comes on board. "fast money's" earnings edge, it's evan wilson. >> so what is the trade ahead of earnings, pete? how's the options market? >> the options aring. a pretty large move. when you look at the implied volatilities, normally in the 30s, now into the 60s it's almost double. essentially they're implying about a 13%, 14% move off these earnings. something relatively sivt talking well over $4, 4 1/2 dollars on this move. the other thing i'd point out about these earnings is aren't going go to know more about this churn? that's been something that's been very concerning looking at twitter and trying to break it down each and every quarter. >> and of course the big ceo question. we're going stoik with earnings here. pfizer reporting tomorrow before the bell. traders are expecting big moves for this stock. mike kuo is in austin with the options action on pfizer. mike. >> yeah, you know, it's interesting, pfizer, this isn't a stock that typically moves a whole lot on earnings. usually the day after 1.2%. but the options trade we saw today was looking out a little further than that. somebody who had already made a
substantial bearish bet on pfizer and was long 16,000 of the august 2835 puts those were rolled out to the september 4th 33 1/2 puts. this is somebody who's making a bearish bet that in just over a month pfizer could be down another 5% or more. interestingly, in the month following earnings that is actually about how much pfizer moves. so even though it doesn't move that much in the day after, over the course of the following month it could move a lot and this trader is betting it could go lower. >> mike kuo in austin on pfizer. for more "options action" check out the full hoe 5:30 p.m. eastern time on friday. breaking news report on procter & gamble. mary thompson in the newsroom. >> dow jones reporting that david taylor will be named ceo of the company as early as thursday. this according to dow jones. he will succeed taylor lafley. taylor is the president of beauty grooming and health care for the consumer giant's
company. and a.j.laffley of course this is his second tour as ceo having come out of retirement two years ago to lead the company through a transition. but again, dow jones reporting that david taylor will be appointed ceo as early as thursday of this week. back to you, sara. >> thank you very much. mary thompson on p & g ahead of those earnings. it doesn't come as a big surprise if you follow p & g because david taylor a few months ago was promoted to oversee about half of total business at this company and everyone's been waiting for a.g. to make his exit. >> and i think then they're waiting for what spinoffs are you going to see? this is the catalyst for this name. and i think procter & gam sbl a stock you want to own. there's a lot of bad news in the price. the commodity deflation is something that really supports these guys but there are some iconic brands that they're going to be able to definitely fetch a decent price for, especially if you look at the packaged food space. there's premium multiples being paid for a lot of these things. i kind of like it. >> i don't know. there's a lot of bearishness on this stock. and a lot of people say that a.g. wouldn't leave until he turned around the company and so far it hasn't been a full turnaround.
all right. we've got your first move tomorrow when we return. more "fast money" coming right up. don't miss my take on what the far east slowdown means for your money. and what you can do to protect yourself. then a big data stock that's crushing it dissecting the big biogen breakdown. "mad money" is next. a new sea chance to tryew look. something different. this summer, challenge your preconceptions and experience a cadillac for yourself. ♪ the 2015 cadillac srx. lease this from around $339 per month,
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all right. finally, it is time for "fast but not least." a florida retiree taking home the crown at this year's ernest hemingway look-alike contest in key west. after 15 years of competing in this contest the former air traffic controller was named papa hemingway at the annual event. the competition is held at sloppy joe's. that's a local bar that hemingway frequented while living on the island. and by the way, one of our traders could have given the winner a run for his money. here's what guy adami looks like after a few years -- a few days not shaving. >> time lapse. no, listen, the final call on my hair. big hemingway fan. >> big hemingway fan. >> let's go around the horn, tim. >> green mountain. in your favor. >> pete. >> dgx diagnostics. had options in there. it's going higher. >> jpmorgan. i like it for a lot of reasons, one of which is valuation. >> guy. >> sara, great having you on
board. the price action letter x today was weird ahead of earnings. u.s. steel on the reversal ahead of earnings tomorrow. >> i'm sara eisen. catch "fast money" again tomorrow at 5:00 p.m. eastern. "mad money" with jim cramer starts right now. my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you money. my job isn't just to entertain but to explain what the heck is going on. call me at 1-800-743-cnbc. or tweet me @jimcramer. f.a.n.g., yep, f.a.n.g.'s back. i said it