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tv   Fast Money  CNBC  December 23, 2016 5:00pm-5:31pm EST

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awesome. >> service, leader shm, and i can tell you the employees have told me directly how proud they are to represent your firm, john. thank you for joining us and a very merry christmas. >> most welcome. thank you. >> john montgomery, the founder of bridgeway capital management. and merry christmas to all. that does it for "closing bell." "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's sometimes square, i'm melissa lee. tim seymour, brine kelly, brian grasso and guy adami. gold having its worst stretch in 18 years, but the charts suggest it could be flashing a buy sign. and despite trump's love of it, twitter has lost 12% this week, prompting one analyst to call it, quote, unquote, toast. are any of our traders buying this stock? they'll weigh in. and later, one of the hottest trump trades showing signs of cooling off. we'll tell you what that is and how to profit. first, we start off with the losing streak that very few people are talking about. and that is the chinese stock market. check out shares of the fxi, the
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etf that tracks the chinese stock market. lower now for eight straight days. tracking for its worst month of the year. this all comes as chinese state media warns of looming trade showdown with the u.s. how serious could this be, and which stocks could get caught in the cross-hairs? ambassador, we kick it off with you. >> first of all, the question is, is china a currency manipulator, have they been engaging in unfair trade, practicing for a long time. all arguments on both sides of the ledger. and no question that china has been accused and convicted of dumping steel, of dumping a lot of natural resources, dumping a lot of products. when you look at the currency, the chinese yuan, they're not manipulating the currency. and chinese currency has outperformed a number of core trading partners of ours, relative to the dollar. i don't think they should be called a currency manipulator. and, in fact, they are now weathering their currency against asia and made that change last summer. that was part of the pain that
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took the yuan to where it is. if you want to know what the trade is here, ultimately, if i look at the chinese internet name trading in new york, reliant on the chinese consumer, and that is alibaba, ten-cent. these names getting destroyed on the concept that if a trade war really takes center stage, that these companies will suffer. i don't think they will. and in the same way people are pricing it. >> here is the question, though. is the fxi down because of the president-elect? >> i think it doesn't -- i think -- >> he had his sights on china. >> right. so, listen. it is one of the catalysts. china certainly has issues. they built this debt-fueled economy. you can't grow debt faster than your gdp forever. that story ends. we have seen it end 100 times over. we know how it ends. it doesn't end well. so when the chinese economy does slow, they will have problems. you're seeing outflows on record levels at this point in time. they're having issues over there. their bond market crashed, capital controls. and they're pegging their
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currency. they are the definition of a currency manipulator. >> pegging it to what, though? >> they're pegging it to a basket of currencies. which is a brilliant move, by the way. because all their voices are in dollars. they can go out there and climb, hey, we're having steady currency and their invoices of dollars are genius. >> first of all, against a number of nations that are primary trading partners. >> invoice those companies in dollars. >> the currency has been largely floating freely against the dollar. >> and what? they set a band every night. >> hold on. >> but the band -- >> this side of the desk is fueling the conversation right now. >> so -- >> so i do believe that if you look at freeport, freeport is down 15%. that's your proxy way of trading china. steel down 13%. since the november highs. eem down. these are all ways that china is
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really -- reacting to the overall market. i do think it is a trump trade. i do think that's the negative activity. but with most of the trump trades, you do get a level or an entry point. we're getting there. i do believe that these are going to be buys. i think that the bite is -- the bark is always worse than the bite. i think the rhetoric meeting reality will come to a point where china is going to be a buy. i think we're very close. >> well, you know, i tell you, steve i know talked about this. i know tim did earlier this year when u.s. steel was a 7, 8, 9, $10 stock, talking about the potential for that to move to the up side. now you turn around today at the end of the year, a $36 stock. a lot of people -- probably correctly, by the way, are saying the stock has run way too fast, way too far, way too fast. but, you know, if this protectionist stuff takes place and he starts speaking, he being the president-elect, specifically about we're going to protect our steel industry and stuff, one has to wonder, can we retest the levels we saw in the middle of 2014 in a name like u.s. steel, which is
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probably another 15 or 16% higher than we are now. deep end of the pool, i would submit, because i do think these are stretched. but if the rhetoric turns that way, these stocks have up side. >> in terms of going domestic chinese economy, the thought is that the domestic chinese economy is okay, and so as long as you isolate yourself to within that country, nothing to do with the u.s. -- >> every time people have tried to trade the chinese stock market in this country and the impact it's going to have on that economy, they have been wrong. first of all, pmi in china is largely flat to slightly higher over the last two years. it's it's been a little above 50 for two years straight. when it was crashing, essentially 18 months ago, a lot of those names like the adrs traded here, which i think, by the way, businesses have never looked better. if you think that amazon and google and facebook have this dominant secular play that's -- in terms of not only how e-commerce is going but how people are communicating, bidu,
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ten-cent and alibaba are exactly that in china. and think about all of the businesses that alibaba hasn't monetized. including ali pay and things people don't know anything about in this country. i think these are opportunities. those were opportunities in those stocks. they traded down 30% and went back up at least that much when the dust cleared. >> may i ask a quick question? i know we're tight on time, but -- >> just raise your hand next time. go ahead. >> but alibaba is having a lot of problem. counterfeit goods? i would wonder if that vest he is wearing is counterfeit -- >> i don't think anybody wants a copy. >> trying to get faux hide. >> that's nice material. ♪ holly jolly christmas >> i mean, come on. >> overall for the u.s. markets, though. if there is a trade war. >> you have to watch names that
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are heavy importers. so walmart. that's one of them. and even if there isn't a trade war, walmart products could be going up. >> or apple -- >> wages are going up in china. so we had low -- production in china. low cost of production. wages are going up. if things are going well, the cost for balanwalmart and apple another one. >> do we think of it as anybody who sells products could be at risk or this trade war is more confined to things like steel and commodities? >> let's face it. think of the u.s. companies that made the most in terms of investments in china, especially on the industrial side. i think they have some issues. i think the u.s. automakers are only holding time until we actually sat by the fire and had a conversation, really, about chinese stocks. >> i think it is the retail market, though. that's where that border tax adjustment is really starting to play out. and that's why you saw the xrt down aggressively in the last month or so. but i do believe that it's going
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to back off. i don't think the border tax adjustment is going to have the tail winds that people think it's going to have. even with the republicans only all areas -- >> should i be worried about yum china, for instance? should i be worried about starbucks? should i be worried about gm? >> it's interesting. maybe yum spun off at the perfect time in terms of how the whole thing played out a few months before the election. and i'm not pretending to be some geopolitical -- i'm not. but in terms of our bond market, i would be concerned. listen, i don't think china would do this, bite their nose to spite their face, but they own our debt in a major way. and do we really want to start barking up that tree and upsetting -- >> i don't think they would do that. they have been doing it for months, way ahead of the trump win. they have already been doing that. they have already been selling treasuries. but i think they're doing it more to defend their currency and their outflows versus to affect anything in our country. >> let's stick with china here. the turmoil in the chinese
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capital and currency markets giving a bid to bk's favorite, crypto currency. >> that's right. >> what's behind this rally, bk? >> i'm glad you asked. you mentioned u.s. steel, and bitcoin has a $13 billion market cap. more than u.s. steel. and that's bigger than twitter. so what's going on? a couple fundamental things going on. the first thing is just classic supply and demand. so we have demand. coming from china. we talked about the devaluations occurring in china. capital flight, almost $50 billion last month. people are using bitcoin as a digital gold and store of value in an environment like that. in india, a month ago, they -- in 20 minutes said 86% of the cash in the country is no longer valid. so they essentially demon advertised the country. people then looked for an alternative currency that is outside of the financial system, bitcoin got demand from that. at the same time, you have supply declining. so we only have 5 million
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bitcoin left. there is going to be 21 million total. 16 million are free-floating. the other 5 million drip-fed out to the market over the next 100 years. so you don't have anything like in gold with where the price goes up and you have a supply response from the miners. in bitcoin, that's not going to happen. 5 million left. so increasing demand smashing right into decreasing supply. and what do you get? well, i get a smart board that doesn't work. but the other thing you get, a chinese yuan, highly correlated to bitcoin. that's been happening over the last month or so. and then the second -- here we go. that's the chart right there. look at that. this has been for almost a year. if you actually look at what bitcoin does, it tends to move a week or two ahead of the yuan. so you can kind of get an idea of where that rate is going to be. and then finally, you might ask, bk, is it too late to buy bitcoin? >> is it too late to buy bitcoin? >> thank you so much for asking that. it's not too late to buy
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bitcoin. here's why. it's up 100% this year, phenomenal run. this chart adjusts for big price changes, essentially, percentage change. so this is bitcoin all the way back from 2002. massive rally. and you can see on the log chart, we have really just been going sideways here for a bit. so if we really get this acceleration and get some more use cases coming on in the next year, you could really see a massive breakout in this. >> so we want to see the situation with china be worse in order for bitcoin to go beyond these three-year highs it's sitting at right now. >> that would help. but there are other use cases coming on in 2017 that will also be a source of demand. >> should we have him over? >> i would like to learn about this stuff a little more. >> all right, fine. >> yeah, bk! >> mr. bitcoin. so -- i don't know. >> he's not mr. bitcoin. he's mr. bk -- you have your own coin. >> i have my own coin, exactly. my own nautilus coin. >> is that also at -- >> it is not at record highs, but we hope it will be someday.
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but the -- what happens with bitcoin and coins like nautilus coin, bitcoin goes up, nautilus coin and others tend to have less of a bid because there is only so much money sloshing around. there are other coins out there that could be the next bitcoin. but for right now, this is the most liquid one and that's where all of the demand is. >> be honest. >> yes. >> do you look at the rise of bitcoin and do you think they worry about the geopolitical spheres in the market? is that an indicator for you as much as anything else in the market? >> i think there are certainly people who buy bitcoin and are storing it for exactly that reason. because it is a store value outside of the traditional financial system. so, yes. i do think so. i'm not sure it's traded enough yet to have it be a sign of systemic. but people are certainly buying it for that. >> how much, bk -- its merit originally, decentralized transactions that allow a lot of people to sit by the fire, wear a nice vest and actually talk about a way to transfer money.
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>> well, right. so there's two parts to bitcoin here. we talk about the currency, which it functions very well and is doing quite well. the other part is the technology behind it, what people call block chain, allows you the financial service area. and that is just a massive thing. that's going to be as big as the internet, if not bigger. >> all right. coming up -- is anything going to say anything else? >> what else is there to say? >> will you take bitcoin for it? >> we'll sell this all for you will of the bitcoin in your pocket on twitter. >> accurate amount. >> let's go. bids right now. >> donald trump's favorite form of communication. twitter's stock in the gutter. now one analyst calling the stock toast. plus, gold just posted its longest weekly losing streak, since, get this, 1999. one technician says it is the perfect time to buy. he'll be here to explain why. much more "fast money" right after this. with directv and at&t,you. stream live tv anywhere data-free. join directv today starting at $35/month.
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welcome back to "fast money." twitter shares falling 12% this week, kicking off our top trades. the selloff of a departure of the top executive. chip chowdhury of global executives research calling the company, quote, unquote, toast earlier this week.
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is chip right, guy? >> no, i don't think trip is right, mel. he is right in the short firm and very difficult to own the stock or talk about it on the long side. a decade or so ago, there was a small company run by a man named mark zuckerberg from facebook -- sorry, folks, i was staring at tim's vest. everybody was calling -- the stock was floundering. i'm not suggesting twitter is facebook. but if you give these guys and gals some time, somebody will figure it out and the risk/reward at 15 or wherever it is trading -- to me, the risk to the up side far outweighs the risk to the down side. >> what i don't think, grasso? >> i agree with guy. i'm still long the stock. i've been playing it from the long side. every time it gets to this level around 16.5 down to when we have seen it at $14, it's been a buying opportunity. there are those people who believe that this is the end of the road for twitter. obviously, i'm not one of them. so i am still optimistic that
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monetization can still take place. >> tim, what do you think of twitter? >> well, here's what's a little disturbing and why some people question the validity of twitter. tim's vest actually is a twitter account that has 2100 followers just based on tonight's show. >> wheel in the fireplace. >> tim, watch yourself. >> ooh! such a beautiful holiday night that i just -- so good to be by a hot fire with good friends. >> tell us by the fire. >> tell you what. no, ultimately, it gets back tot toin intrinsic value and it's not hot enough, twitter. >> be careful, burlap is flammable. >> i think you should visit at tim's vest and give us your twitter valuation, as well. and obviously you're bidding for this vest. and we will auction it for charity. >> his account just got verified. >> the countdown is on for all those last-minute shoppers. who will be the big winners and
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losers? we've got the name. 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." >> let's play. global they wero nuclear war. >> talk of a nuclear arms race heats up. plus -- ♪ >> and gold might just be showing signs that its selloff could be over. we'll tell you how to profit when "fast money" returns. [engine revving] ♪ ♪ is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event.
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welcome back to "fast money." shoppers out in droves, at least here at the queens center mall.
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citibank says with christmas falling on a weekend and no time left for online deliveries, today is the day for in-store shopping. considering online purchasing sales growth is far and away eclipsed traditional in-store shopping. adobe says e-commerce sales are up 11%. consumers told the national retail federation they would spend $935 on average before the holiday season really started. so we asked a couple last-minute shoppers what they have spent so far. >> online probably spent close to $1,000. >> online shopping, i usually spend at least 40 to $50. but in stores, i spend at least $100 and up. >> online, a couple hundred on gifts. and then in-store definitely less. >> reporter: slice intelligence data, based on more than 700,000 online receipts shows electronics retailers like apple and best buy are seeing the largest baskets with home deep, nordstrom and macy's also popular beneficiaries of
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consumers' discretionary spending. to meet expectations for the national retail federations' forecast of 3.6% growth, sales are going to have to total $655 billion through the end of the month. so that means there is about a week left to get there. melissa? back to you. >> courtney, thanks so much. so let's trade the retailers. bk, what do you think in terms of who can emerge victorious? >> well, i'm not sure. they all look like they have not done so well. >> their charts look terrible. for me, the one i continue to watch as the tell is amazon. the narrative has been amazon is eating everybody's lunch. it has not performed well in this season. so a close below 750, let's call it on a weekly basis would get bk very bearish. >> trends have to be very important in terms of retailers. you identify the right kind of trend, it's great. if you hit -- if you have a fashion miss, importance -- >> like, for example. what would a fashion miss be? i'm just curious. >> maybe a vest? >> what's your retailer, guy? what would you like? >> i'll give you a quick one.
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game stop, everybody saying dead, dead, get. not a big valuation. seven times forward earnings, big short interest. i passed one of those things the other day and there are a lot of people in game stop. don't ask me why. they report earnings, you could get an up side surprise in gme. >> yeah. so you won't have to talk to the people today. >> i'm glad you asked. it's the holiday season. what do i do? i want to go out in times square and talk to the people and find out if they're spending more or less this year. and what's the craziest give they have ever gotten or given. take a look. >> did you spend more or less money this holiday season? >> i thought a lot more money this season. >> i'm working two jobs now so i would say more. >> i would say less. >> right now, more. >> more. >> i was spending less money every day. >> people being more or less generous this year? >> they want me to be more generous. >> what's the craziest thing you've gotten? >> soap on a rope. literally a bar of soap attached
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on a rope. >> the craziest thing i've gotten is animal butt magnets. >> what does one do with animal butt magnets? >> they're magnets for your fridge, but different butts. >> i met a guy and he bought they $2,000 worth of christmas decorations. after dating me for two weeks. >> people say i don't have much of a butt. do you want to take a quick look and give me an answer? >> sure. it's very nice. >> some kind of weird handcuffs. >> you understand this is a family show, right? >> oh! >> a g-string? >> did your brother like it? >> what are you doing later tonight? >> oh, i don't know. i'll just see how it goes. >> so -- a lot of people say they're spending more. >> yeah, sure. >> yeah. >> you have to work an extra job to do it. >> a lot of people out there from australia, apparently. and that one kid had a couple jobs. it was nuts out there. people in general, in times
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square, at least, seem to be spending more. a lot of mel lee fans out there. just saying. >> $1,000 every year on christmas. i feel it's my duty to keep the economy going. >> >> don't lie to america. >> i do have a trade. micron. it is -- oh, retail? >> yes. >> february 2, they are going to explosive earnings. they're going to do something to torque it higher, amazon. >> all right. well, as you all know out there, christmas and hanukkah are both this weekend. so in lieu of the final trade, we're picking stocks appropriate for both holidays. in other words, these are just great holiday gifts. so, tim, what is your stock? >> we have been talking about boeing. it's embraer, one of the great global airline manufactures in trading, a massive discount to all the other players. be long airbus. >> bk? >> for me, ibm. one of the reasons mainly, they have turned the company around. watson and introduced lock
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chain, bitcoin into watson. >> steve? >> micron. micron. >> guy. >> electronic arts is in the game. back to you, mel. throw it. >> all right. that does it for us here on "fast money." plus the vest. see you back here tuesday. >> happy holidays! merry christmas. >> "options action" starts right after this. data-free.ive tv anywhere join directv today starting at $35/month. no extra monthly fees. ♪ you got it! what do you think? if you're going to wish, wish big at the lexus december to remember sales event get up to $2500 customer cash on select 2016 and 2017 models for these terms. see your lexus dealer.
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morgan stanley.
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live at the nasdaq market site on this christmas eve eve. the guys have some great trades for tonight. >> money will always be paper. but gold will always be gold! >> and gold is doing something it hasn't done since 1999. and a good signal your opportunity to buy. we'll explain. plus -- ♪ fire one of the hottest trump trades is about showing signs of pulling off. we'll give you the stock and tell you how you can profit. and -- the chinese stock market is getting crushed.


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