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

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finalized. i would be more concerned if you're an investor in terms of pressure on shares with something like a lockheed martin relative to boeing. air force one is essentially a one-off project. but there are defense projects at boeing. so there certainly could be some concern there, as well, for other defense projects. >> mike? >> yeah. it's obviously going to be the way he does which is business so to speak. the overall defense budget is not that high, but he really wants to fix ate on. >> do you think the number changes? or is there wiggle room? the reason why people like these stocks all because they thought it would be going the other way? >> we don't know. honestly, we just don't foe if there is going to be some kind of new line. >> and before we let you go, just pivoting back to the market, mike, dow 20,000, we didn't get there today. dropped 32 points. 50, 60 points away now. >> you have an absence of momentum here and the s&p 500 struggling under its own high.
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so obviously can go either way, you're so close, within a rounding error. but it doesn't seem like it wants to seize it with both hands right now. >> we mentioned earlier the vix, volatility index, below 11 today. you might argue it only has one way to go, but reflects how quiet things have become. moving 103. >> the vix is reflecting the calm and anticipating calm over the next 30 days. but if you look further out, the vix futures are somewhat higher. so it should pick up in terms of expected volatility before too long. >> you would think. red arrows as question close things out. the dows lower, the broad spp, the small cap russ sells, we'll see if things can turn around tomorrow. thank you, michael and to eamon and phil, as well. that does it for "closing bell." thanks, everybody, for tuning in. "fast money" begins now. welcome to "fast money." we begin with breaking news. president-elect donald trump meeting with the ceos of boeing and lockheed martin. phil lebeau has the latest. >> melissa, when you look at
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these meetings today, a couple things. you heard the comments from president-elect trump after the meetings. where he essentially said, look, we're requestigoing to get the down. we don't know what the costs will be, whether with the f-35 or air force one. but it's clear that he has essentially told the dod and his generals, as he refers to them, that he's going to stand behind them. and that they are going to negotiate for the lowest price possible. we did hear from boeing's ceo, dennis mullen berg after his meeting. he came out and said donald trump has his hands and a good grasp of the economics of the air force one project. and they are going to be able to work on reducing the cost. remember, donald trump came out two weeks ago with a tweet saying $4 billion for two air force one 747s is too much money. the cost is out of control. it has to come down. dennis mullen berg said, yeah, we can do it for less than $4 billion. a final price has not been set. that remains to be seen what it
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ultimately will be. but it's clear, boeing's message to the public was, we met with the president-elect. we understand his concerns. we will work with him. we did not hear were marlin usen, the ceo after her meeting with donald trump to discuss the rising costs of the f-35 joint strike fighter jet program. but we did hear from donald trump, who said, look, we wanted to talk about the costs, and we are going to get the costs down. so the interesting thing will be when they finally set those prices, melissa. that will be the telltale sign in terms of, okay, are we noticing a difference. and let's hear from boeing ceo, dennis mullen berg, about his commitment to bring down the price of the air force one project. >> we're going to get it done for less than that. and we're committed to working together to make sure that happens. and i was able to give the president-elect my personal commitment on behalf of the boeing company. this is a business that's important to us. we work on air force one,
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because it's important to our country. and we're going to make sure that he gets the best capability and that it's done affordably. >> again, the final price that will be set for air force one for that project for the two new 747s, that remains to be seen. but you can bet, it is not going to be over $4 billion after donald trump has made that very public mark out there in terms of this cost has to be much lower than that, and there you see dennis muilenburg leaving mara lago this afternoon. we saw this with carrier and now boeing and lockheed martin. >> art of the deal. and phil, a couple key differences between these two companies that you know, our viewers probably know. but it is worth pointing out that air force one for boeing is much smaller overpart of the revenues where lockheed is much bigger. boeing has the commercial business. lockheed martin does not. the pressure could really be felt by lockheed. whose ceo did not come out and make a statement. >> absolutely. and there are a lot of unknowns
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with the f-35 program, which is particularly why she may not have made a comment. she might be saying, okay, we have to go back and see truly what we can do in terms of bringing down the cost. and yet at the same time, meet the capabilities that have been set out there as far as benchmarks for this program. that's far different than what we're talking about with air force one. which is essentially a one-off program for boeing. they've got the commercial business. yes, they have a defense business. but they have got the space business, as well. much more diversified. the f-35 is not all of lockheed martin, but it's a big chunk of the company's business. and it's crucial to future earnings and future growth. and that's why i think people are looking at that meeting with marlin hughesen and saying, okay, ultimately what will change with those contracts and with how much this will mean to lockheed martin. >> all right. phil, thank you. phil lebeau in chicago with the very latest. and we mentioned the differences between the two companies and it is worth noting, the two companies have really performed very differently since the
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president-elect actually tweeted about the costs of these various programs. when he tweeted about air force one, saying that the costs were out of control. boeing is since up by about 4%. lockheed martin down since trump tweeted about the f-35 fighter program. how do we assess the impact of this negotiation on the defense stocks? >> on the defense stocks. you brought it up with phil. in terms of -- the f-35 is far more important to lockheed martin than air force one is to boeing. boeing's ceo says how important it is to him. let's face it. in terms of revenues, boeing is $100 billion in revenue this year. give or take. we're talking about a few percentage points in terms of what they're going to do. in my opinion, you sort of let boeing off the hook easy. if you read between the lines, that's what he's telling you. boeing trades at 16 times forward earnings, inexpensive rival. i think the stock goes higher. lockheed martin, and tim brought
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this up last week, as well. far more important the f-35 to their business than air force one to boeing. so that's why lockheed will probably be under pressure for the foreseeable future. if you see it down 3 or 4%, you buy the stock. >> it's funny. the trade had been you buy defense stocks until republican administration -- republican-controlled congress. this is still not to say that the overall defense budget won't be increased. so they might be squeezing the margins, but overall -- >> lockheed, when this was at peak margins -- the stock has got -- it was from the standpoint of is there anything that can come out of this for them? absolutely. they can cut costs, they can bring this down a little bit. peak multiples, peak, you know, margins. so i look at the stock and say, lockheed is going to continue to slide here. i think the negative news on it, there is no reason to buy lockheed. boeing, i love boeing. i think boeing is a great stock. and i will say, there was some news that came out a couple days after this tweet. i believe it was, and i could be wrong, there was a dividend increase or a buyback.
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>> $14 billion buyback. and increase of dividend by 30%. >> so that's part of the reason why it's up. >> f-35, 20% of lockheed sales to this point. think about the exuberance they should have had on the election. any pullback is an adjustment to a move they probably shouldn't have. by the way stocks in lockheed's case went from 180 to 280 over the course of 15 months. so these things, one, had big moves. it make sense. boeing is the one, yes, better mix of international sales that's positive. except for there's been an attack on the chinese. this is the -- a major customer. and to say that boeing isn't going to be affected by tariffs and trade wars and things when, in fact, there is one other major player. >> on both the commercial and defense parts of the business? >> i think certainly on the commercial side of the business. and we're talking about companies. we're talking about their stocks. that's what boeing's core business is. and at the end of the day, to say that boeing is unscathed because -- >> so no touch for you. >> i don't think you need to chase any of these stocks. >> there is a broader issue here, too.
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this new administration is being labeled as pro business. this sort of activity is not particularly pro business when you think about it. the sort of saber rattling via twitter and having these sorts of meetings. and from the boeing standpoint back to the air force one, this is kind of an easy one. an easy one for trump to pick. it's also an easy one for boeing to give a little bit and they look like they're being supportive and then they move on. and like you said, mel, i think the military spend is 15% of their sales. this is a one-off deal with the air force one and they can move on. i just want to make one point. you talk about the buyback, this stock trading 17 times forward earning and also has a 3.6% dividend yield with the stock at all-time highs. i think this stock gets bought and pulled back. >> the broader markets now. call it the grinch who stole 20k. the dow coming ever so close again to that magical milestone, but closing 57 points shy. so when will it come? tom lee is wall street's biggest bull and certainly not a grinch. he joins us here on-set.
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tom, you're feeling just as bullish as, say -- >> or grinch-like. >> you know, 100 points ago, 200 points ago on the dow? >> yeah. i think for the most part, anybody who is long-term oriented should feel pretty bullish right now. pretty optimistic. so, yes. i don't feel like a grinch yet. >> the opposite. in terms of the sectors you like, this is interesting, because tell com is not a sector you would think you want to buy into a rising interest rate environment. why do you like it here? >> i think telecoms can be one of the sleeper hits next year. one, it's a seven-year laggard. any investor needs to be looking at the bottom performance groups to find opportunities. it's a big inflation trade. capital intensive, net neutrality could be a big tailwind for them. and you look at the stocks trading 12, 13 times earnings. you know, if they get a market multiple, you're talking about a 50% move.
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telecoms is an easy buy next year. >> basically talking about two stocks, three stocks, four stocks? >> there is derivative plays, the tower stocks. spectrum trades. i think it's the whole complex. i mean, it's really telecom media compared to silicon valley net neutrality winners. >> i'm curious what the positioning is of your clients. how much in cash? where are people? >> i think people have filled up their gas tank with a lot of stock. like with more than, you know -- remember, most of this year, this was a battle against sentiment. people were really bearish and i think we -- i think anybody who was constructive took a lot of criticism. now i kind of feel people are pretty long equities now. so i don't think you're playing sentiment at all in 2017. >> so there is no -- because there isn't a thought in the market now that there is still a lot of money in bonds and still a rotation that's ongoing. you're saying whoever is going to be old although indicated to stocks has a full allocation now.
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>> well, i think there is an allocation story on future savings flow, right? because everyone -- the u.s. household saves $1 trillion a year. so every year, $7 trillion. the last period, none went into the stock market. so there is fuel coming from there, but you know, do i think there is this huge rotation that starts next year? you know, it's going to -- it's going to happen, but i don't -- i don't think it's a flood gate. >> back to the tele co's, do you see the potential for m & a. we have the time warner/at&t deal. is this the sort of thing that can lift the sector beyond what we think are valuation scenarios? >> i think, dan, that's exactly right. when you see people talk about these deals, they're really consensus critical. talking about these aren't going to happen. these are smart, strategic moves and it makes sense. if you believe net neutrality is changing. i think the telecom and media sector are doing some smart things. >> when you see the market sort
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of grinding the way they are now, and granted, we are in the year-end holiday period, people are gearing up to leave with their families, et cetera, forcing the range very narrowing today on the dow is 40-something points. the s&p very narrow, as well. do you see that as a good sign we're sort of just pausing or bad sign that we're not doing anything? >> well, i mean, i think it's -- we're two weeks into the end of the year. so i think everyone is just dialing things down. i'm sure the machines are, you know, saving some processing power. and i think i've heard some people talk about this. i think it makes sense you don't see as much selling because of the chance for tax changes next year. >> so just holding but not doing much else. >> yeah, and i think people just don't want to lose money. but i don't think any of our clients are trying to make up performance in the next two weeks. i think people just don't want to be surprised. >> all right. tom, thank you. >> thank you. >> tom lee of fund strat. >> at&t started to go down over the summer as rates started to
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creep higher, which made sense. but at&t turned on a dime around 35 bucks. we talked about it in the fall. that stock has actually gone higher as rates have gone higher. somewhat counterintuitive. but leads me to believe there is something going on far greater than the time warner deal. at&t is poised to take out the highs of the middle of this year. >> yeah, i agree with you. i think at&t is the one to own. 8% earnings growth. the company is managed very well. made some i think great strategic acquisitions. so that is in my buy, no question. as far as other sectors, biotech, again, is a name that's out -- a sector out of favor. i think you can look to scoop that up from a relative value perspective and i think it could have a good year next year. >> i was selling some at&t yesterday. i think a lot of this is a rebound from, again, the deal should have knocked it down. internet e-commerce travel and leisure stocks. carnival. these are stocks where they have tremendous earnings growth. i think they have been left on some level -- fantastic businesses that tend to control the markets. those are the things you want to look for here. >> yeah, and i would just say
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back to the m & a thing, it seems there is going to be some mega deals coming in 2017. it could be cable, wireless, content. coming up, want to beat the market? of course you do. a simple strategy that's been working for decades and we'll tell you how you can profit later this hour. and tim seymour, the ambassador, says there is one stock that could have your portfolio looking pretty. he will tell us the name and make his case later this hour. much more "fast money" still ahead. what's the value of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. welcome back to "fast money." a news alert on honda. hey, phil. >> melissa, honda and waymo, the new name for google's self-driving car project. wageo and honda to incorporate the autonomous drive technology into honda vehicles. this is officially being called discussions. but let's be clear here. if these two ultimately work together and it's every indication they ultimately will, if they agree to work together, those vehicles that wamo will work on will be incorporated into the test fleet here in the united states. let's take this a couple steps further, melissa. what you're seeing is a company that's already worked with chrysler on chrysler minivans,
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part of the test fleet. it's now entering discussions with honda and will likely see those in the test fleet at one point. there will likely be other companies, other automakers approached by wamo. and you see a company here with waymo, working with automakers to get its technology into vehicles initially for testing, but it sets the stage for what we're going to see in 2020, 2021, 2022, when the next wave of autonomous drive vehicles really starting to out into the public and go beyond the test fleets phase. so that's the latest. honda and waymo in discussions to incorporate self-driving autos into the fleet. >> phil, what kind of technology do they use? mobile parts, or -- >> a number of suppliers. you're talking about lighter and radar. there are camera sensors involved, as well. so what you have here, it's a little early to say this company
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is definitely going to be a winner, because waymo is using some of the technology, but all of the players in the same orbit there, mobile eye or nvidia or other companies all in that same orbit here. this is the beginning of that next step towards more automakers saying, okay, let's take -- take this a little bit further than just -- you know, a couple dozen test vehicles out there. >> phil, thank you. phil lebeau. obviously you think about tesla. one advantage, it has millions if not billions of miles already recorded on their fleet of cars, because they have had them out there using semi autonomous technology. >> yeah. well, it's interesting. he mentioned nvidia too. so obviously tesla is going to be huge in the autonomous thing ultimately. but invidia, 10% of their sales is going to auto right now. that's their graphic chips being used for the infotainment, but moving more into the autonomous segment.
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that's part of the reason this stock is up 200% this year. it's one of the biggest stories going on right now. tech is really the new frontier, which is the automobile. >> and that's why an xpi was bought. absolutely in the same areas. >> i'm with you, dan. it's the first thing -- i think the stock is a phenomenal stock. and again, the reason why it's up. i wouldn't necessarily -- phil made the point -- very important point. it's very early to play these stocks for this particular sort of partnership that's being established. we're talking a long runway here. i wouldn't jump into invidia. >> back above $200. i don't know what's going on, but i will tell you, every time they try to bury this stock below $180, it comes back, and the stock will be up $5 quietly. and i think it's going to make a push to all-time highs. we can argue valuation and in terms of what their business model is. in terms of the stock, it's very hard to be short that stock. >> you know when the climb started? when elon musk was invited along with the other silicon valley
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ceos. >> i agree with you, guy. in fact, i've been pretty bearish on tesla two days ago. i noticed they broke out above the long-term down trend. so having said that, when i hear this talk about self autonomous cars and competition coming into the space, i think it means you sell tesla. people are acting as if tesla is the only game in town and they're not. there is going to be enormous. still ahead, the dollar making a major run higher in the last three months. can the search continue? commodities king dennis gartman is here. i'm melissa lee, you're watching "fast money" on cnbc, first in business worldwide.. in the meantime, here is what else is coming up on "fast." looking to beat the market? >> you bet your butt. >> a simple and easy strategy would have had double the market's return in the past decade. we'll explain. plus, tim is serving up the pitch. giving what he says is the hottest stock to own. the name when "fast money" returns.
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♪ ♪ i don't care about the presents ♪ ♪ underneath the christmas tree ♪ ♪
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welcome back to "fast money." here's what's coming up in the second half of the show. tim seymour is going to head up to bat. he's got a fast pitch that says will blow the traders' minds. but will they buy in? he'll make the case. plus, check out shares of micron, soaring 10% after hours, and this after a 40% climb in the stock this year. so how much more room does the stock have to go. we have got those details. first, as the dow inches towards 20k, a few names that got it to 10k have since become the indexes' biggest laggards. one strategy could make them worth a second look. dom chu is here to explain. dom. >> oh, melissa, there have always been a lot of investors out there who love those divine dividends. and over the long-term, it's a key part of the whole profit story in the market. so we'll take a look at some current dow stocks to help
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illustrate that part of the story. yesterday, on the show, we pointed out how since the dow 10k number the first time in march of '99, there have been three big laggards in the index. ge, pfizer and merck. since then, ge has posted a drop of nearly 14%. merck lost around 22% and pfizer has dropped by around 30%. but if you look at total return, which includes the dividend payments, it's a much different story. both ge and merck posted a total return around 45%. pfizer gained roughly 25%, and apple up over 9100% and even more impressive, 10,000-plus percent if you factor in dividend payments. and in a broader context, the overall dow jones average has doubled in the time frame. but if you factor in the dividends, the total return is a tripling of your investment. so, melissa, as we focus on dow 20k, for many investors, it's about not losing sight of not just price levels, but also what's not reflected in those
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headline numbers, and that's those divine dividend checks. back over to you guys. >> divine dom. thank you. let's trade some names. laggards. which do you want to buy. >> you probably have 9% eps growth, give or take, 3.9% dividend. hasn't really gone anywhere. it seems like it's been a $32 stock forever. but if they can make breakthroughs in oncology, get immune kn immune know therapy. i don't think you're going to get crushed owning pfizer. they report at the end of the january. if you ask me to pick one of the names, pfv will get you done. >> we saw when you add the dividends in versus -- significant. a rising interest rate environment when dividend stocks seem to be more out of favor than in favor. how do you think about this? >> i think it's actually very important. i think a stock like ge, to me -- by the way, i think this is an environment where jeff
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imutility is going to shine. their business, digital technology business is also growing. a high -- it's a 3% dividend payer. breaking out of a multiyear range and i think it's time. >> you know, mel, that was an astute question. i heard tim seymour on your other show talking about coca-cola. another stock. >> stinky with a dividend. >> but the fact of the matter is, you're looking for, you know, a secular shift in, you know, that business that's textbook. they're paying you 3.3%. that sort of thing. i think that makes sense. keeps you in the game a little bit. >> i agree. i look -- until you lose value. i mean, look. i look at coke, and soda plays are out of favor, in my opinion. dividends, you know, great to have worthless if the stock is going to underperform. i don't want to be involved. >> but coca-cola and ge -- my grandkids. >> if you look from the perspective that i believe in that business, i think the economy pickup is going to
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absolutely benefit. the underlying story there, and the dividend on to it, it's a home run. >> let's move on. after hearing how dividends can turn some of the dow's biggest laggard's into winners, let's go off the chart with chris veron, three dow dividend plays. chris. >> nice to be here. i brought two buys and one sell. and i want to talk about what i think is the most important chart of 2016. it's jpmorgan. this is a 30-year picture. the stock has been sideways since march of 2000. the breakout over the last several weeks has been decisive. of all the analysts that cover the stock, fewest number of buy ratings since 2009. we think this is a decisive breakout. the right price is higher. be a buyer of any pullback. this is still one of our favorites going into 2017. and you still get a 2% yield. next one, we think ibm has turned in a meaningful way. 3% yield. the stock was cut in half over the last two years.
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higher low, higher low. getting up through 167 today. we think 185 is the right price. again, 28 analysts cover the stock. eight buys. still out of consensus. getting better. and then we have one here that we -- that we want to sell. and it's constellation brands. stz. up 900% since the lows in 2011. it traded ten times earnings down here. it trades 25 times earnings up here. has not participated in this rally. 200-day moving average now downward sloping. reduced exposure. we think this is a bear market on the way. >> should we invite chris over? >> yeah. >> i was leaning you were going to say no, but we'll bring him over. i'm just kidding, chris. by the way, obviously stz is not a dow stock, but chris felt strongly about having to sell it. i think that's an interesting one. the fundamentals may match up with the sell, right, in terms of being exposed. >> the stock is expensive,
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expensive, expensive. it's got a lot of mexico, trade issues. the breakout for the stock was the deal where an highser bush had to divest the part of the business. this whole u.s. corona story, and frankly, been priced to perfection. i would be short. >> and you don't get paid to own it. the yield has come down. 1% right now. and you think about what hasn't worked in a rally where a lot of things have worked, this is not on the playing field. so the beverage names, we talked about coke, as well, just not on the playing field. we think those are stocks to avoid. if you own them, reduce exposure. >> anybody like ibm? >> i think ibm is interesting. we talked about it a little bit. five consecutive years of revenue declines and next year, 2017, not only are earnings expected to be flat, which is a good thing for these guys. sales are expected to be flat also. so if these guys ever get their act together and start thinking about how to unlock some share value from their cognitive stuff, then this stock is in play and probably moving back up
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towards 200. >> with that div yield. >> and i think most importantly, when a name stops going down on bad news, it's time to own it. and the numbers haven't been that -- haven't been that great. but the stock has stopped going down. we think that's the first sign of -- that's the first sign of a change. own the stock here. it goes higher next year. >> i know you as a respected technician, chris, probably poo-pooed the idea of dow 20,000. a lot of people like to watch it. where do you see the markets going? i mean, how far can we go? >> i think the most compelling things, not just the last several weeks, but months, it's getting broader and broader and broader. groups that were not involved are now involved. and that is our judge of a bull market. the more stocks that are working, the better the trend is. we think this is getting stronger, not weaker. be a buyer, pullbacks, 2200 is very good support. we think higher next year. >> chris, thank you. chris veron. >> does a great job. >> right on. >> yeah, absolutely. >> how does he rank versus carter worth?
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>> carter worth is like -- what's that mountain with all of the presidents' heads, rush more? chris is on rush more. >> let's put chris on there? >> rich ross? >> we have a lot of folks. >> getting crowded. coming up, check out shares of micron. the deals on what drove the stellar quarter. and tim over here warming up to give us his fast pitch. doesn't want to pull anything. he'll tell you which stock has him so excited, right after the break. much more "fast money" still ahead.
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welcome back to "fast money." we've got an earnings alert on micron technology, soaring in the after hours session. josh lipton has the latest from san francisco. josh. >> soaring is right, melissa. so you look at that stock, obviously, heading into this print. it already skyrocketed. some 70% in the past six months. and now moving higher in the after hours. obviously, it was that q2 guide that really beat across the board. eps revenue and gross margins now. they're expecting 31 to 34%. micron closingly watched, because its chips feed the end markets like pcs. so that derambis, the bulk of its business, the chips in
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computers, key component there for pcs. on the call, talking about the outlook a bit, they were asked, how do you think about gross margins looking ahead, companies' executives saying we are a different company. they noted that higher mix of nan chips. outlined cost reductions in the company. bottom line they said we do have an opportunity to expand gross margins. also questions on the call about some acquisitions they made, including inno tara. they said no significant restructuring costs are expected there. melissa, back to you. >> josh lipton, thanks. seaburg. >> i'm a buyer. our tim covers this stock. nailed this quarter. congratulations, tim. look, the fact they raised guidance is huge. they're extremely conservative usually on their guidance. i love the stock here. >> yeah. >> i think the gross margin guide is really important. i know there has been a lot of talk. obviously, their biggest customers are apple and the hee
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lard. a lot of discussion about how expensive's apple's latest mac book pros are. this will fill in the gap. >> let's switch gears. time for the fast pitch. one of our savvy traders making a pitch for a stock they think is a buy. the other traders vote on whether or not they're buying or selling the pitch. so, tim, you're up. give us your fast pitch. >> thanks, mel. i'm pitching on estee lauder. they make hair, makeup, skin products, all things i care a lot about. and ultimately, here's why i love this stock. and why i think this is the pitch you want. organic growth. ultimately, this is a company that is growing in the emerging world. emerging europe, asia, africa, up 7%. asia up 5%. at a time when organic growth in a lot of industries is wrong, this is right. i think about what they talked about in their first quarter numbers. and their first quarter numbers, fiscal 21, came through. guid guided very conservatively, down 8.5% in three days. this is a company always very
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conservative on their outlook. and in constant currency terms. and yes, very much hurt by a stronger dollar, at least in certain parts of the world. also their businesses actually growing. they reiterated 2017 guidance. it gets back to where do you like the stock and at what valuation. and i want to show you the chart on this thing. ultimately, a stock traded from 98 back down to this level down here. this is -- if we could take this chart back three years, which we will not, you will see that $74 is a level that this stock has held multiple times over the last three years. and actually, it's been consolidating as back above the 20-day right now. the stock has put in a base. ultimately at valuation of 21 times forward earnings. it's cheap to loreal, cheap to other names that dan probably uses quite often. we're in a place here where the stock is now value territory. a huge pullback, reiterated 2017 guidance. the health and beauty and wellness part of the retail segment, by the way, is
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something that people have been talking about in a secular way. the same way they're talking about ath leisure and other things that are growing. market share growing. these guys have it. >> take a breath here, brother. so is this thing -- $11 billion in sales, like you said, a global behemoth in the space, any potential for consolidation? it seems it would be right for that. >> yes. they have made a couple smaller acquisitions in the last couple months. these guys have 7% market share. again, market share that's growing. but, yeah, they have the balance sheet to do it. these are one of the -- this is one of the go-to names. associated with highen end beauty and makeup and this consolidates. >> tim does have nice hair and skin. >> what about the proposal tariffs. you know, the tariff, taxes coming in on imports. how much of an impact is it going to have on estee lauder? >> we have no idea. ultimately, talking about health and beauty products. >> this is an e-commerce internet world. and frankly, i don't see these
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are products that are going to be as subject. and, again, if you do that to these guys, you're doing it a lot of american companies. >> right. >> so time for the weigh in. buying or selling tim's pitch on estee lauder. >> let's start with me. that's what i did on my board. estee lauder and then did a latin thing. caveat emptor. means buyer beware. i'll say this. tim did mention the level that's very important. 74.5, 75, needs to hold there. if, in fact, it does, i think on valuation you can buy the stock. >> dan. >> yeah, i'm going to go with tim. i mean -- >> wow! dan likes something. >> no, but i actually think that this is a name that you probably actually -- because it's down so much in such a short period of time, if you ever tune in on fridays at 5:30, what's that show called? >> "options action"! >> this is a great name to let into a bullish position. >> when dan agrees with me, there is obviously something very good going on. maybe i should be a seller of my
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own stock. just kidding. seabu seaburg? >> i'm a buyer. i think it's amazing. i think that i like the value story here. i like it from the perspective of it's a value play. and i think the organic growth story is amazing. i'm with you, tim. >> let me get this straight. >> go ahead. >> basically, all of you guys said to buy this stock. >> 74.5, i think you can own the stock. risk/reward. >> all we could talk about is health and beauty products. a growing trend. >> why wouldn't you like an you will at that over an he is at that lauder? >> valuation. again, this is 21 times, trading relatively cheap to itself at this point. >> i snuck a would you rather. >> can i ask dan a question? i would ask dan who said to sell downside puts, are you getting paid enough to put on that type of risk? >> maybe we should wait until 5:30. i don't know. >> fine, thank you. >> nice to be back. coming up on "fast."
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we didn't invite you over to the desk, by the way. gold down since the election. if you're tempted to buy, dennis gartman has a dire warning. that is ahead. you're watching "fast money" on cnbc, first in business worldwide. ormation. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
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welcome back. dennis gartman joins us from virginia beach. always good to see you. >> >> always good to be seen, mel. >> we want to play our favorite game with you. and that is "higher or lower." we kick it off with this question, dennis. is the u.s. dollar heading higher or lower? >> higher, and probably dramatically so, relative to the yen and certainly relative to the euro. higher. >> all right. how about gold, dennis? higher or lower? >> depends which currency in dollar terms, probably still moderately lower. in terms of the euro and yen, i think higher. and it's been higher all year long. >> lastly, stocks, dennis. equities. higher or lower? >> it's been a bull market, hasn't it? things moving from the lower left to the upper right. likely going to continue. everything seems to be moving in that direction. perhaps a little overvalued. but still going to go higher. >> all right. tim has got a question. >> dennis, what about the fact that global pmis are at five-year highs and the rest of the world is accelerating?
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why does the dollar have to go higher? >> because interest rates here in the united states are so dramatically higher than elsewhere. our fed is tightening monetary policy, take a look at what's going on with the adjusted monetary base. it has fallen 25% over the course of the past year. quite honestly, creating fewer dollars. and as long as the interest rate arbitrage continues to be in the united states' favor, the dollar is going to continue to get stronger. yes, economic activity is picking up. nice to see the french pmi. nice to see the german pmi moving back above 50 again. ours is moving up. i think everything politically and economically seems to count for a much stronger dollar over time. >> dennis, you said stocks go higher. a lot of people believe a stronger dollar at some point, tremendous headwinds for multinationals, which means maybe the stock market is not as robust. do you see that differently? >> you know, guy, what's interesting is, the japanese had the same problem in the 1970s and '80s when the yen moved from
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365 yen to 50 yen. and all during that time, every importer or every exporter from japan decried but got better and more efficient. the stock market continued to rally thereafter. we might see the same thing here. yes, they will -- the exporters will while and nash their teeth about a stronger dollar but better at what they're doing, and more efficient at what they're doing. >> again nice, great to see you. thanks for joining us. >> thanks for having me on. looking forward to seeing you in january for the tenth anniversary. >> absolutely! dennis gartman, thank you. >> wow, that was a tease. >> nice. because it's -- i mean, it's a very big event for us on "fast money." "fast money" ten. let's trade what dennis was talking about in terms of -- >> i don't think the dollar gets away. gold trading at 11.33 close. short term trade oversold. and as far as stocks, i think stocks trade sideways until the end of the year. we probably get a leg back up the thing of the year in
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january. i think we're going to have another bounce. but i don't think we're going to have a meaningful move. >> obviously, you can't really flake this call without a time horizon this. i think the dollar in the short run may trade a little bit higher. i've been -- i said 3% ago. i thought the dollar was capped. i don't think it goes a lot higher. i think the current accounts in europe and japan, we run into some resistance. >> headwinds for stocks. >> people believe that fiscal stimulus comes in. they'll look past stronger dollar. everything is off the table now in this new trump administration. with that said, energy goes sideways here, which very well may do. want to play levered oil names. we have talked about apc for quite some time. they repositioned their company and can take advantage of the prices we're seeing. i think an darka goes higher. >> let's talk about the vix here. the vix known as the fear index, hitting, in fact, its lowest level since august 5th of 2017. what does this mean for the options world, stan? >> so let's take a look at it. as far as -- listen, vix under 11, it gets a lot of headlines
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here, doesn't go down there a whole heck of a lot. but it doesn't actually mean that you have to run for the hills. and one of the things that -- really important to think about over the next couple weeks, we're in a scenario where there is very light trading and things are likely to pick up in january. but today call volume is about two times that of puts and that's generally the relationship with calls to puts in the vix. it could really only go to zero from 11 where it is right now. and it's not likely to go much below 10. here is that chart. mel just said the last time it traded below 11 was three weeks before this massive vol spike we had on august 24th, 2015. this doesn't mean a whole heck of a lot. what is important is looking at the vix futures and looking out to january, they're pricing about 14. so that's considerably higher and then if you look out to the summer, it's at about 19. that is the long-term average for the vix. but what is the vix doing? it tracks options prices on the s&p 500. if you look at the spy, which is the etf that tracks the s&p 500,
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implied volatility, the price of options is obviously very low. that's here in the red. and it's at about 10%. but here's the most important part. this is realized volatility. that's how much the spy is actually moving around right now. so you can have option prices at one year lows. the prices of options can be actually expensive. so one of the things you hear this all of the time, with vix at 11, buy protection. i don't really buy that, because that's when you own a bunch of options that are just okay. so to me, you know, you have to look at it where it is relative to how much the underlying is moving. >> for more "options action," check out the full show, 5:30 eastern time on friday. coming up, guy looks at one auto name he says might break out soon. you remember what that is? >> yeah, i do. >> more "fast money" coming up next. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade.
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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.
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welcome back to "fast money." time for a little buzz kill. shares of twitter tanking, taking a hit today, down 5%. this is netflix's twitter account, hacked this morning. the message you see here, from our mine. trying to expose security flaws to the greater good and on top
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of the chief technology officer resigning, the 11th executive to leave the company this year. so does twitter have even more problems ahead? seaburg. >> it does. a name we talk about a lot on this show, twitter. the stockstill flawed. no question about it. and the departure of the cto today, perfect example. this guy was waiting around for a sale. there's no question in my mind that he waited for a sale, the potential of a sale. sale not there, he's off the table. this stock is going lower. there is no doubt, it's going to test the old lows, probably go lower. there's no way this management team has their eye on the ball. not finding a solution to attract new users. they have just figured out solutions to make the platform better for current users. it's not going to work. >> and snap is coming. a great piece in the "new york times" a couple days ago talking about how snap -- not snapchat, is not courting influencers and celebrities. a more authentic plat conform. snap is going to be all over the place. and q3 might have been as good as it gets for live, with the election. you may see the company go x
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growth. >> the expectations for these guys are absolutely zero. >> yeah. >> and let's face it. the model is maybe not working as you would like to see in terms of growth. but it's working. and the people -- it's unique and the people that use twitter swear by it. it has value, it's probably more of a media property than a tech company. >> they don't know that either. the sentiment doesn't seem like anybody knows what it is. and i've got to tell you, now that the election is done, i'm kind of over it. you know what i mean? let's get back to talking to people rather than tweeting at them. >> so old fashioned. >> i like when dan is old fashioned. >> old-timey. >> ye old timey. time for the "final trade." >> a name like ge, a name that has commitment and investments in energy. i'm a fan. >> cop. visibility into the pipeline, visibility into asset sales, a stock that can do well. >> yeah, so iyt, the transport index for you. maybe turning a double top.
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>> guy. >> good to have you back, mel. i did miss you. i want you to know that. we never talk about hmc. tim brought it up, this google car thing. above 32, breaks out of a three-year down trend. >> i'm melissa lee. thankstrend. >> i'm melissa lee. thanks for watching. "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. people keep asking me if they've missed the move, if it's too late to participate in this incredible rally. the answer? if you want to understand how this market has been able to


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