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tv   Fast Money  CNBC  November 21, 2016 5:00pm-6:01pm EST

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i have plenty of retail discretionary. i think the consumer is in pretty good shape. you have to pick your spots. i like the department stores. >> are you going to be shopping on black friday? >> i will be here on black friday, with you, i believe. >> i'm on amazon. >> exactly. and walmart's deals start at midnight. stephanie, michael. thank you. see you bright and early. that does it for "closing bell." "fast money" starts now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tim seymour, karen finerman, dan nathan and guy adami. that man there, peter schiff, euro pacific capital in danger of becoming extinction. and energy stocks pushing the markets to new highs, but dennisgartman saying don't trust the rallies. he'll be here. and the one site that has tim seymour so excited, he won't stop talking about it.
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what it is and why he's so bullish. the dow, the s&p, the nasdaq and the russell i'll all hitting new highs. should you keep buying stocks at these levels? guy. >> scary, mel. welcome back. we missed you last week. >> good to be back. >> so try to be a little more sincere. >> i missed you too! >> thank you, appreciate that. for me, it scares me up here without question. i've been scared for months now. i'll say this. the key has always been, in my opinion, the russell verifying this move to the up side in the s&p and over the last couple days it has. so iwm continues to trade above 130, i think it's okay. sectors you want to still be in we have been steadfast, defense stocks continue to work. we talked about amazon post earnings. a very good chance 700. last monday before you left, it got down to 710. we talked about it that day on the reversal, said here is an opportunity, rallied almost 10% since. that's interesting. u.s. bank corp on the banking side. there are names to continue to
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work. as long as, again, in my opinion, the russell, the iwm, stays above 130, all systems go. >> before we might have been cautious about this rally. really, with the dow, setting new records, but here we are across the board, making it more convincing to you going into year-end, the gains will hold. >> removing elections, whether you like the outcome or not, removed something that was a major hangover for the markets. if you want to layer in the fact people are comfortable with potential tax policy and red winds, things they can expect, i get it. the economy in terms of pmis, manufacturing, we're rallying ahead of this election. last week, retail sales, none related to the election. jobless claims back to 1973. housing starts that were back to august of 2007 highs. so you have plenty of reasons to see why the economy should be doing better. if you have an environment where you could take regulation and headwinds away from small businesses and rates going up 60 basis points, which is what people wanted six months ago, that's worth it. >> isn't that an issue, though?
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rallying ahead of those things. the idea of an infrastructure package, the idea of lower taxes. you know, all of this stuff and deregulation, financials. i would be surprised -- >> the economic data says it's happening. >> i understand. >> not deregulation. >> the market is running ahead of it. so now at all-time highs, that's my point. so i think there is more risk. the higher we go in front of we even have this president-elect come into office, i think there is more risk to the market. >>. >> look, i think the vix below 13 is a gift and something you should take advantage of before christmas. my point is that you have an economic backdrop for saying, you know what, guess what? that and remove all of this uncertainty, even though i agree with you, i think political uncertainty has never been higher in this country. >> i -- >> are you buying protection? >> yeah, the vix here -- tim pointed out, $12.50-something at the close today, that is almost as low as it's been for the year. so i think if you want to hold on to what you have, i think this is pretty good protection to have. but this rally was pretty
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impressive today. pretty brood-based. tech coming into it. so google -- it was interesting to me, facebook, which on friday announced $6 billion buyback, i'm very happy, up 4 or 5 bucks. but $6 billion buyback from facebook is really -- it's a gesture. it's not an act. when you look at apple's buyback, that's $175 billion. facebook is $6 billion, beginning in 2017. i'm glad they did it. it's a nice gesture, but not financial engineering. it is a gesture. >> right. >> glad they did it. >> maybe the wrong gesture, though. a company growing the way it is, made huge acquisitions. if i was an investor, i would be scratching my head. >> great balance sheet, excess cash. they don't need -- they have excess cash, i think the -- >> is that how a growth company should be using their capital? >> yes, yes. >> can i just make -- >> google, too. >> the high we are we go, and we could be off to the races. in the last three january/february periods, we've got some significant selloffs.
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this year, we know the market was down 12% at one point at the lows in february. back in 2015 a 6% selloff. so the higher we go, we're 5% off the mid october lows. >> so before i felt like you were reluctantly bullish. >> no. >> a week ago. >> well -- >> right after the election. and now -- >> because of what tim was saying, took a massive overhang off here and -- >> now you're saying be cautious. >> because people were caught offguard here, no doubt about it. and this massive group thing, where people are like this is great. so now we have a situation where the sentiment has shifted. >> that's a good point. people massively offsides in many ways in terms of predicting who would win the election and the market's reaction to who won the election. and here you have a massive outperformance on the market. so, i mean, putting all those things together of -- is this rally justified. >> i haven't thought it's just for a long time. for many different reasons.
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so doesn't matter if it's justified or not. here we are now. i'll say this. i don't know what can derail it. and i've been looking for reasons why from now towards the end of the year. people will chase. the only thing that scares me is something that tim brought up when he said the vix is a gift here. when the vix gets down to these levels the last two years, it's been at levels where the broader market has sold off from. >> so what are we buying today? this week? >> before elections, what was working. value, overgrowth, financials, industrials, health care on some level. things that then also maybe have renewed i mpetuimpetus. what's interesting, you can find relative value in big cap tech, something to get back in this. >> karen? >> i didn't buy anything new today. but protection here. i want to own some of that. >> i would say some of the stocks that had a massive counter trend rallies that were otherwise underperformers, starbucks, mcdonald's and a lot of retail. i think you can lay them out here or take profits. if you just got the sort of bounce they have had in the last month or so. i do not like those sorts of things. >> guy? >> you stay in the defense names
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and banks that are slow and steady wins the race. hammering this u.s. bank corp. they made an all-time high today, if it didn't, it came close. and railroads will play catchup in the kansas city southern since election day has all it's done is gone higher. i think that continues. >> with markets hitting record highs, have bears been trumped? who better to ask than peter schiff, noted bear himself. he joins us here at the nasdaq. peter, good to see you. >> nice to be back. >> nice to have you. >> are you willing to throw in the towel a little bit here? >> not at all. i'm one of the few people who wasn't sfrifd by trump winning. and you have to remember, why did he win? >> so did you position for that and were you one of the few people who predicted the market's reaction correctly? >> very few people thought he would win. >> you did. were you positioning yourself prior to the election? >> i've been positioned for a long way. i didn't change based on what i thought would happen in the election. my point is, the reason he won, the reason so many people voted for him, was because the economy, the recovery, is an
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illusion. so many people who invest have bought into this recovery narrative, the fed bought into it, certainly the media, and president obama. but the voters knew there was no recovery. but just electing donald trump president doesn't solve all of the economic problems that caused so many people to vote for him. so we still have real problems in this country. and this fiscal stimulus, there's $20 trillion why it can't work. because if we actually try to cut taxes and raise spending, with the enormity of the debt we have, we're going to need even mormon tear stimulus than the past. we have to do even more quantitative easing. the fed has to reverse and cut interest rates and it's not going to create economic growth. but it is going to put a lot of upward pressure on inflation that is already now above what the fed supposedly says is its target. >> you're saying either your guy, trump, doesn't have all of the tools and can't fix everything and this is a big illusion or you're saying that actually, the economy was probably in better shape before we got into this. and that you have a backdrop
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where if anything, again, 2014, arm get done is coming, 2016 at the highs of gold, saying this is your ultimate defense against armageddon. where are we, and i guess ultimately, you're a money manager, you have a big business. i'm sure your investors think you do a great job for them. where have you been positioned and how do you position for this, because gold is not the answer. >> first of all, that's not the question. but i have been positioned the same way for a long time. and i'm not talking about arm getten. you like to use that word. >> it's your quote. that's your word. >> well, i think that there is a major crisis coming, bigger than the 2008 financial crisis. and i was telling cnbc about the 2008 financial crisis for five years, too. that's why they started calling me dr. doom on "squawk box." so, i have a long history of warning about problems in advance. and then when they happen, you know, i get vindicated. this is a bigger problem. and as i said, the problems aren't solved. trump is not my guy. i preferred donald trump to
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hillary clinton. but the problem is, trump is just promising in many cases more government. he wants to solve the problem by government creating jobs, by spending money on infrastructure. he doesn't want to tackle for political reasons the real problems that are underlying the economy. we have been living beyond our means for generations. i mean, look at the enormity of our debt and it's all been kept together by these artificially low interest rates. if we actually try to have legitimate economic growth, we're going to have to confront the problem. we have been content to blow one bubble -- >> '820s and '90s was a sham too? >> i'm not going back that far. generation is, what, 20 years? we have been growing this national debt. we have been growing our trade deficits. trump talks about the trade deficits, but you can't solve them by renegotiating our trade details. >> how long can you be positioned for an outcome and still convince investors to stay with your fun? i mean, i'm not sure what your returns are, and you can tell me and they may be fantastic.
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i don't know. if you're going to stick with certain positioning for five years, six years at a time, isn't that a difficult sell to investors when the market may be starting to go the other way? >> not necessarily. i mean, look -- >> and many people agree with the basic premise that you're putting forth in terms of our economic problems. we just don't know when they're going to happen. it's a difficult way to position your portfolio. >> it's not. as long as you're patient. look, i mean, how long did it take the subprime market to blow up? i was patiently short that market until it blew up and i collected, you know, on that bet. i mean, you find where people are wrong, and then you can position yourself to profit when the crowd realizes that they're wrong. the way this is going to work, right, is as interest rates start to rise, and look at what is happening now with the long-term bond yields, look at what is happening globally. foreign central banks no longer want them. >> bond yields going up more around the world. not a u.s. phenomenon. >> america is the world's biggest debtor. we have to pay that interest.
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somebody else is on the receiving end. >> record lows -- >> no, no. >> our interest payments have never been lower. >> that's interest payments. that's because interest rates are low. what happens to our interest payments when rates go up? we've got a record amount of debt. and our economy is all fluff. our gdp is all service sector. >> okay. >> so we are very vulnerable. >> last quick -- running out of time. last quick question. we know your position on gold, you like it. in terms of our positioning for this scenario, which is worse than the financial crisis, are you actively short the markets right now and do you remain short until that day comes? >> no. as i have been saying -- every time i come on the show, i don't think the market is going down much, because i don't think the fed will allow it. they are trying to create an economy based on asset prices and asset bubbles. and the wealth effect they believe in. so they will not allow -- >> so how does a financial crisis play out in this scenario if it's going to be worse than the financial crisis of '08, how does it manifest itself in the market? >> this is going to be a currency crisis and sovereign
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debt. the bond market and the dollar. that's where you're going to see this. because they are going sacrifice the dollar. >> short whose asset class? >> short the dollar by being long foreign assets. and by being long gold. but i am not short any u.s. stocks, and so the u.s. stock market going up doesn't hurt me. i'm not betting against it. but i'm betting against the phony nature of this recovery and the fed and by buying foreign assets, investing in foreign markets and investing in gold. and look at the returns that i got during the bush presidency. everybody was excited about bush. but look at the returns on gold and on foreign markets and on merging markets from 2001 through 2008. they killed the u.s. stock market. >> foreign markets the first to sell off if the u.s. blows up the way you're talking about. it happened already after the election. >> i think when the u.s. blows up -- it's the u.s. in trouble. not supplying us with goods we can't pay for. >> peter, thank you. peter schiff, euro pacific
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capital. >> the rates going higher because the economy is improving, or the thought of economies getting better under a trump -- i don't know. i think they're going up for the -- some of fears pete just talked about. i don't think people want to own our debt. >> the bond has gone up more than the u.s. treasury and the the jbb -- >> i don't know how -- i don't know why that's working that way. but the move -- the knee-jerk to the reaction, 172. they're 230 now. that's more than just an economy. >> every -- >> i don't know why that is, is my point. >> coming up. is amazon making a big play for live sports? we've got the details and developing story right after this break. plus, imagine if you could only buy dividend-paying stocks. what would you do with bonds crashing? top fund manager from black roc on where he sees value on high-yielding stocks. and oil continues to rally. dennis gartman says there is something you cannot trust. he will be here to explain when
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welcome back to "fast money." i'm susan lee. jack in the box stock down 2% in after hours. earnings per share came in ahead but revenue pretty much in line. jack in the box saying an extra week of business helped in the quarter. here's where the story turns negative. company-wide, same-store sales missing badly at just half a percent in the quarter, whereas estimates calling for 1.6% gains. so a third of what the market was looking for. meantime they also boosted dividends by a third. 33% more in payouts. jack in the box down now three out of the past four sessions. in lined with what we're seeing across the other restaurant names. they have outperformed so far since the election with expectations that $650 billion in tax cuts will mean more eating out. also trump's limits on the overtime rule and repeal of most of obamacare will help cut down costs of dining names and possibly boost profit in the future. back to you, melissa. >> thank you, susan lee.
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and relief of the fast food stock. susan mentioned. take a look at these numbers. mcdonald's up 4%, panera up 12% and chipotle up 9% since the election. so i go to our chief jack in the box correspondent. guy adami. >> i'm the chief qudoba. >> i've never been to either. >> how many times have i ask you to go. ? >> or anywhere. >> well, that's just countless. i mean -- >> listen, think should have sold this stock and maybe it will happen tomorrow. this stock should have been sold off. only down 2.5%. the eps was fine. the guidance for 2017 to me is the problem. people will now start talking about jack in the box being too expensive on valuation. that said, made an all-time high today intraday. down to 3.5, 4. you buy it when it does. >> this goes to dan's point, we
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don't know what we're going to get. rallying on all of these promises. >> the consumer has got a tailwind when the consumer had a tailwind with lower oil prices and jobless claims that were at record lows. it comes down to valuation. jack has finally gotten to a place where earnings can go to a lofty valuation. this is not a name you want to own. you want to own yum, mcdonald's, even dominoes, which is a higher value and more growth. >> from food to sports, amazon could launch a premium sports package with its prime membership and could be bad news for disney. julia boorstin has the details on this developing story. julia. >> reporter: hi, melissa. sources confirm that amazon has been in talks about buying up digital streaming rights to live sporting events. it could be bad news for the tv business, including espn, as sports are considered key glue holding the tv bundle together. the "wall street journal"
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reported they have been in touch with the nba. on this report that amazon could be creating a premium sports package, perhaps a bundle with its prime membership, amazon shares ended up higher and disney with espn, stocks ticked a bit lower on the news. now, amazon has already been strengthening its relationship with the nfl, partnering on a series called all or nothing, and according to a source close to the situation, amazon was interested in the nfl game that ended upstreaming on yahoo! as well as the digital rights to the games that twitter ended up live-streaming. but most of the major sports rights are tied up for years, which is why amazon approached one world sports and disney's espn about more niche sports such as games that air on digital service espn 3, according to a source close to the situation.
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amazon has already reportedly been in talks for international nba game rights. amazon, the leagues, espn, are not commenting on this report. melissa? >> thank you very much, julia boorstin. dan, could this move the needle for amazon? >> not right now. amazon is going to great lengths to make that prime membership more attractive to their consumers. growing prime very aggressively. and they know the more people are going to buy in more stuff. i don't think this probably an immediate threat to a disney any time soon. but what twitter did with thursday night football, we know it's not a tremendous success one way or another. but it kind of i think expanded the use case for twitter for consumers. i think amazon is going to mess around with some of this stuff and probably get it right. >> it seems smart of amazon to get its toe in the door. yes, a lot of rights locked up for years. but when those contracts are up, they will be there, and an nfl or an nba could possibly parlay this into more of a commerce relationship, as well. with the amazon platform. >> i mean, they're just dominating on so many fronts.
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i can't get into the stock, but the story is really good. i mean, i think for twitter, it's got to be -- that's a big competitor for twitter, maybe not right away but something to think about. although i did see nfl looks like viewership is -- ticking back higher, post election. which you would think would be good for disney. but i guess this amazon news weighs heavier than that. >> the premium multiple for disney is a thing of the past. 2% of the people in the states are cutting their cable subscriptions. that's been the core. coming up, oil soaring 4% today but the commodities dennis gartman says don't trust this move. i'm melissa lee, you're watching "fast money" on cnbc, first in business worldwide. in the meantime, here's what else is coming up on "fast." >> imagine having to buy dividend stocks while bonds are crashing. >> it's like a nightmare. >> it is. but a top fund manager at blackrock says now is the time to buy. he'll explain. plus, tim is serving up the pitch. giving what he says is the
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♪ don't stop believing >> one of the top three worst songs ever. >> really? >> don't stop believing, garbage. >> there was a time for journey, though, for everybody.
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welcome back to "fast money." a record day on wall street as the s&p, dow and nasdaq, as well as russell closed at all-time highs. here's what's coming up in the second half of the show. energy stocks on fire today and one oil giant in particular that traders see surging into the end of the year. we've got the name. plus, it's the one big box retailer, our very own ambassador, tim seymour, is calling cheap. will the other traders agree? he will deliver his fast pitch. first, we start with the move in bonds, because the yield on the ten-year bond posted its biggest two-week gain in nearly two decades, a number of the
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so-called safety trades in danger. breaking it down is a man known to live life dangerously, himself. cnbc's dom chu. hey, dom. >> you know, melissa, danger is my middle name. it's -- no, not really my middle name. but still, if you take a look at some of the safety trades, they are starting to unravel since the election. and the interest rate picture you just referred to is what we're talking about. besides the ten-year yield, you have seen this surge across the yield curve, including huge moves in the two and five-year and traders pricing in a 95% chance of a rate hike in december. so as we take a look at some of those trades that have worked in the past that are unraveling, we know that the interest rate sensitive ones are the ones coming undone the quickest. if you look at the three worst-performing sectors so far just this month in november, you've got consumer staples down by 4%. also the real estate investment trusts that new sector just installed, not too long ago, the 11 sector in the s&p also down by a little over 4% just this
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month alone. and by far, the worst-performing, a 6 therz decline in utility stocks. these hefty dividend payers whose payment checks when interest rates go higher getting hit the hardest. melissa, as we talk about what traders are talking about down here on the floor of the exchange, it's about whether or not we do see interest rates continue to rise. i spoke to art cashin earlier today, and he said he expects to see at least near-term move into the up side for those ten-year yields. remember, nothing goes in a straight line, and we're already in statistically improbable areas. back up to you guys at the nasdaq. >> thanks, dom chu. with yields surging are there dividend-paying stocks that aren't in the danger zone. he helps manage more than $37 billion as co head of the equity dividend team. tony, great to have you with us. >> great to be here. what. >> is there to the notion of
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dividend stocks are not the place to be? >> i think it's really critical to distinguish between high-yielding stocks and stocks growing their dividends. at blackrock e we have been focused on dividend growth stocks. we seek to provide a competitive yield that's current but grow that dividend over time. and that makes all of the difference in the world in today's market. >> one of the sectors you like is financials. did anything change after the election? i mean, how much of this move in financials that we have seen recently is based on the fact that one, we have seen the yield curve steepen quite a bit since the elections and two this notion that regulation is going to be a pullback. >> so i think we were on a reflationnary path before the elections. unemployment was improving. that was translating through the phillips curve into better wage growth. we were also seeing inflation targets, cpi, reaching the fed -- the fed targeted level. so we were seeing reflation to begin with. the trump presidency, i think, just accelerates that. so we're going to see improving
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net interest margins as interest rates rise out of banks. also, the deregulatory impulse that trump has. that could also be good for banks, both in terms of their underlying earnings, as well as their return to shareholders. so we expect to see more and more dividend growth out of this sector. >> so let me ask something. we saw going back a year or two, the hunt for yield and anything yielding just got pretty far ahead of itself. could we be also at the beginning right now of fun to flow away from what you're trying to do, no matter how attractive it looks. if the money just wants to be somewhere else, what can you do about that? >> it's an important question, one with he ask ourselves. so we have been saying for some time that the bond proxies, reits, utilities, staples, they were overvalued. so they were very highly valued relative to their history. to us, that spelled risk. where we saw better opportunities was in dividend growth stocks. where we saw valuations. actually, one standard deviation lower than the historical averages. and we looked at banks and said banks are a great hedge,
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particularly in an income portfolio against rising rates. one of the few sectors that benefit from rising rates. we looked at that as attractively priced insurance, if you will, against rising rates. and that's how it's worked out so far. we think there's still room to go. we look at both fundamentals and valuation. in terms of fundamentals, net interest margins are still at a bottom, and still there's a lot of room to go up there. we think lending growth should be good. we think we're in a reasonably good economy, which should be good for loan losses and like we said, we think deregulation improves from here. and so we see earnings improving. and then when you look at valuations, they're still very attractive. we look at the financials in our portfolio, paying at 12 to 13 times earnings so still very attractively priced, some trading at book value still. >> tony, for the brooder market, can rates move too quickly. you have seen a significant move over the last week to ten days in the ten-year specifically. is there a scenario where rates
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go too fast, too far, too far? >> definitely a possibility. we think of equities as the best house in a tough neighborhood. so when you look at bond yields, they were at 35, 40-year lows, they have come off those lows, but still low by historical averages. we think about assets being overpriced. we see that in bonds. equities, if you look at the s&p 500 multiple, it's about 18.5 today. that's a little higher than long-term averages of about 16, and that's where the risk from interest rates comes in. but it's modest. >> tony, thanks for joining us. if you want to be in dividend stock, what would you be in? >> so i look at also -- the dividend is great. so a commitment to capital turn is important. let's look at large cap tech stocks, intel, microsoft, cisco, 2.5 to 3% dividend yields and also really kind of at the forefront at -- you guys may be surprised at secular shifts in commuting. microsoft with linkedin.
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and intel bought altera and they want to do more ai chips. when you have companies repositioning themselves for future growth and they're also committed to capital return, you know, that is kind of interesting to me. so those are names that are trading, you know, a little above a market multiple, microsoft, intel below. maybe you have an ibm that thul should be splitting up its cognitive business. those are reasons i would look to stocks like that. >> companies that advance their dividend payout. and so high-quality companies that might be trading at a discount. phrma health care, forget the overhang although that's a nice edition. these are free cash flow general active that continue to grow their earnings. i think this is probably the best place if you think about things that haven't moved as much since the elections. >> at&t, which is basically round-trip the entire year. start of the year, 36 had that huge run-up as people were searching for the yield tony was talking about. got up to 44. here we are back at 37 bucks. i think it held the level it needed to hold on november 14th.
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against $36.50, give or take. i think at&t has a chance now to get back into the low 40s. >> still ahead, crude oil surging nearly 15% from its recent low. why is commodities king, dennis gartman, telling investors not to trust the news? he'll be here to explain. plus, timmy, tim seymour, warming up for his big pitch to the traders, a name he says you need to own, right after this break. we love knowing what's happening. so the nest cam security camera looks after things and alerts your phone if something's up. hey, need a glass? no matter what it is. hey, dad. ♪ the medicare enrollment deadline
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welcome back to "fast money." we've got an earnings alert on palo alto networks. it's tanking in the after hours session. seema mody has the story. >> expectations were perhaps just too high. the security player did see double digit percentage increase in total revenue and billings, but guidance for the second quarter came in below analysts' consensus, plus a sizeable increase in stock-based compensation weighed on profitability. shares down about 13 or 12% in extended trade. keep in mind, this has been a hot stock this year. hacking -- as hacking becomes more prevalent. investors have been piling into cyber security stocks, shares of palo alto up 40% from its june lows on the expectations that companies and governments will
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spend more on palo alto's products. but it's dealing with heightened competition from other cyber security players and something analysts have mentioned in the past, melissa. >> seema mody, thank you. dan nathan. >> the analysts are offsides. she mentioned stock-based compensation. you know what that is? a loss of $1.90. so this thing is trading at seven times sales and the sales are decelerating. so it's a really tough go. yeah, we've got hacks and people need that stuff. but i don't know. who is going to pay for this? meaning the company. there was a takeover premium into it. i suspect this thing probably has lower lows. >> all right. time now for "fast pitch." we have a trader make the pitch for a stock they think is worth a buy right now. so when they're done, the other traders here will tell us whether they are buying in or not. so tim, pitch away. >> here's the pitch, guys. let's talk about lows, a company from darling to expensive to now cheap. why am i buying lows? first of all, they announced earnings last week.
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those earnings were not good. they missed. in fact, their same-store sales comps show they're significantly different than home depot. but guess what? at 14.5 times next 12 months, these guys trait at 500 basis points cheap to home depot. it's a bargain. second, housing trends absolutely improving. household formation is improving. fixed private investment is improving. these things are all great for home improvement companies and arguably lowe's and home depot will get the major benefit. and technicals, strong support for the stock. if we look at the chart, you can see that $64 has been a low at the stock and a low we have hit a couple times. it's a low that was tested last week when they announced volume was over 18 million shares. that was four times. in fact, the third-biggest volume day. that to me was your capitulation. again, if the economy is growing, this is a name that was very popular in a world where the economy was, eh. valuation, it's now cheap. this is the time to actually come back into lowe's and buy this home improvement name. >> all right. anybody have any questions? >> i have to agree with
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everything else he said. do you think the decoupling between target and walmart, are you seeing similar now between home depot and lowe's and does that concern you? >> i like the question, guy. in fact, when i think about growth, walmart, which trades at 16.5 times target at 17.5 times, less growth for a bigger valuation. if anything, you should be asking about what are they doing differently than home depot. it's sg and a costs. it trading at a discount. valuation wise, a lot more here. >> karen has got a question. >> yeah, so do you think what we saw, the pause in the consumer over the last few months before the election was what happened here? and once it -- now we're passed that? the acceleration? >> i -- look, karen. if you're buying barnes here, because, in fact, they're actually goodbye lending more and there is more confidence in the entire sector. the drying on home equity loans going straight into your house. and household formation is only growing. appreciation giving people incentive to spend more on their houses. all those reasons why home depot
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and lowe's did well in 2015. these were darling stocks. the backdrop is even better now. >> all right. time for the traders to weigh in. we ask, are you buying or selling tim's pitch on lowe's? karen finerman. >> yes, i am. i am buying. does that show up? yes, it does. i love the consumer. they're alive. >> really? all consumers? even the other -- >> yeah. >> guess what dan's position is. dan, what do you say? >> sold to tim. i'm a seller. and i'll tell you one thing. tim, you know carter worth. when i look at that chart. >> oh! >> it better hold. if you look at the long-term uptrend that had been in place in 2011, it broke that, down 17% from the all-time highs. i'm not loving it. you've got to come equipped with a longer-term chart. >> you should come equipped with a new view on the market. you have that thing wrong. but anyway, let's wait for guy and see what he has to say. >> i know. >> i'm going to say that -- i'm -- see what i did there? i'm with tim.
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>> but tim is over there. there you go. there you go. oh, that's -- genius. >> and i am buying it. you know why? because to hiss point on the technicals, it did bounce off the lows we saw over the summer. valuation does make sense. and if you do see the consumer -- the consumer is clearly confident about something. lowe's stands to win to that, and you'll start to see analysts get on back of that and start to see the upgrades, commensurate with something like that. and the stock will trade, in my opinion, up to the mid 70s. so, yes. >> two out of three buys, tim. >> i love it. it's consistent, folks. those who voted for me, it's consistent with the view you have had on the markets, which is more constructive. good for you, people. >> is he talking to me? >> actually talking to dan. >> were you asking to the desk? hang on. have a ball over there. still ahead -- you can come back. energy stocks serving today as crude oil rallied more than 4%. can you trust the rally? we'll hear from the commodities' king, dennis gartman. you're watching "fast money" on
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cnbc. he is invited back to the desk. first in business worldwide.
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welcome back to "fast money." oil rising to a three-week high today. but dennis gartman ain't buying it. why not? commodities king joins us now
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from virginia beach. dennis, good to have you with us. interesting. you're coming on saying we're not going to buy on a day that goldman sachs is basically upgrading its forecast for oil. today. because it's more tactically bullish on an opec agreement. what are you seeing that goldman is missing? >> i think that goldman is very wise. they're very smart. but i look at it historically. if you have bet upon opec making an agreement and adhering to it, they will reach an agreement. there is no question about that. iran has already said they're in. iraq has already said it's in. putin has already said he's in. the saudis have agreed they need some sort of a cut or at least a freeze. we know we're going to get something on the 30th. the question shall always be when it comes to opec, will they agree -- will they adhere to the agreement, and history says, no, they shall not. they always, always cheat. i have no reason to believe this will be different. venezuelans in extreme difficultly, they need the cash flow. the saudis need the cash flow. yes, they will reach an agreement. and crude probably has another
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buck and a half, $2 to the up side. after that, it will be very, very difficult for crude to sustain a rally. >> dennis, it's karen. let me ask something. how does that cheating get going. how do we start to see an agreement fall apart? >> the same way you always do. at the margin, somebody begins to increase production. the saudis take their production up 200, 300,000 barrels. we produce a little more out in the basin. we know we're going to do that. the iranians have to do that. they have to cheat. you'll see it. and at the same time, we already know that we've got at least 15 to 20 large tankers sitting off the coast, either in scotland or rotterdam with 600,000 barrels each. that's not going away any time soon. it will be at the margin, karen. that's how it always occurs. and then sooner or later, after the first team says we're actually doing it, we've actually broken, everybody else has to. watch what happens. the most important player in this game is going to be mr. sevenen.
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last time you have had an agreement out of algiers, it was mr. sevenen who said, i'm not going to decrease my production. i'm not even going to freeze mine. it's interesting to me that putin said he's in. seche nsaid nothing thus far today. and i not be surprised to see him come out and say he's not in agreement, we're going to produce and let's remember, they're the largest producer in the world. >> so how much risk to the down side is there right now in the price of oil? >> mel, the same thing i've said for the past month and a half. i think it's very difficult to get above $52, because with a $4 contango, that gives you $56 for the one year and every fraccer will make money at that. it's going to be very difficult to get above 52. on the down side, can we see 35 to 38? that's probably as low as we can get it. i have said this before, and i'll say it again. i think we're going to stay within 38 to 52 for a long period of time. and 45 is a very pleasant number for everybody. frackers can make money at that number.
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most of the middle eastern countries can make a lot of money at that number. and consumers are going to be reasonably happy at that number. so i think we're going to stay from 38 on the low side to 52 on the high side and i think it's going to take dramatic movements either way, dramatic new news to push it out of that range. >> dennis, thank you. >> happy thanksgiving. >> happy thaig to yohanksgiving you. the gartman letter. >> look, on russia, i think russia is pumping 11.7 million barrels a day. they can't do any more. russia is coming with agreement, because this is where they're maxed out. all of opec is doing that. i think brent is going to be at 55 to $60 by mid january. i imagine oil is in balance right now. >> guy. >> anadarko petroleum, gulf of mexico production. jim cramer called it one of the best deals he's ever seen. the stock has acted in kind. to buy it. trading 64 now. last quarter wasn't great, but
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they're streamlining their production. apc is the way to play it. >> were you looking for clues on how to detect the deal is actually falling apart? >> i just wonder, how long does it actually take to fall apart. >> that nobody is complying. >> yes. >> but they're pumping more than people think right now. in other words, there is no deal. they're pumping like mad. so it's really all about relative to where you get from. so, you know -- >> if it's even incrementally less, still less. >> people have been -- >> so if you're maxed out, you would think oil is going lower. >> i don't think they can do any more. okay. so if you don't think they can do any more, then we're in balance and you don't think it's going lower. >> i think it's going higher. the rally in crude sending energy stocks soaring and the options pits paying attention to one name in particular. that would be exxon. the oil company at more than 1% today. can it keep going? dan is headed to the smart board. >> it can. and here's one thing -- >> he's large oil stocks are not buying what dennis is selling. i'm just going to tell you. the xle, which exxon is 17% of
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that s&p large energy etf, just made a new 52-week high today. that's the xle. exxon still 9% from its 52-week hig highs made earlier in the summer and call volume one trade that caught my eye, largely because of the expiration, december 30th quarterly expiration when the stock was trading 86.5. that's exxon. there was a buyer of 2,000 of those 88 calls paying $1.37 for those. those break even at $89.37 up 3.3% from the trade attention price. one thing that is really interesting, exxon down 9% from those highs. xle, its largest component, actually making new 52-week eyes. this is the break-even on this call. i thought that was interesting, the choice of the last day of the year, and maybe exxon playing a little catchup. we were talking about dividends. exxon plays a 3.5% dividend yield. we know they might be out of the woods. we might have seen a trough in
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their earnings. if you're speculating into the new year and maybe this can get back up towards the highs and have a breakout towards year-end. >> this is not your top integrated pick, is it, tim? norvelths, but some of the fundamentals and secular cysts shifts in that industry are starting to stabilize. i would go chevron and totelebefore that. >> so rather is your choice. exxon or fill in the blank integrated oil. >> or my choice. >> yes. it's a new twist on this game. follow along. >> exxon or conoco phillips. i think the valuation might be a little more interesting on c-o-p. i wasn't ready for the game. >> you played really well, considering you weren't ready. >> i wasn't ready. i never know when it's coming again. >> that's the beauty of the game. for more "options action," check out the full show, friday 5:30 p.m. eastern time. this friday we don't. i'm telling them now --
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>> sorry. >> we're off this friday, because of thanksgiving. but we'll return with the full show following friday at 5:30 p.m. eastern time. coming up, guy looking at one stock he says is breaking out. find out what it is when "fast money" returns. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade. approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five,
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welcome back to "fast money." on this day in 1976, audiences met rocky balboa, the boxer from south philadelphia, well-known around the world. what isn't well-known, where it appeared in the original film. there he is working out on the streets of philly, getting in shape. tim was ultimately cut from the film, a legend in his own mind. >> >> i'll tell you what, i used to really do some things in that meat locker. we'll that for another show. >> sounds awful. the "final trade," please, tim. >> a dan contrarian trade. get down lows. >> meat locker. karen. >> be in this rally and buy some protection when you can when it's cheap. like right here. >> dan. >> i don't think it's contrarian to sell weakness. that's what you got there at lowe's. mcdonald's also in a down trend.
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sell that counter trend rally. >> good to have you back, mel. see you tomorrow night, i'm sure. breaks out to the up side. >> ha ha, i'm off tomorrow, by the way. i'm melissa lee. thanks for watching. see you tomorrow. maybe at 5:00 for more fast. "mad money" 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 make you some money. my job is not just to entertain but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. is there room for both fang and fang to go higher? after today with the market ripping higher to still one


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