tv Fast Money CNBC December 21, 2020 5:00pm-6:00pm EST
according to apex, tesla overtook apple as the most widely held names. they saw a rise in popularity in new ipos back to you. >> the year of the retail trader kate, thank you. tonight on "mad money," don't miss jim cramer's exclusive interview with the ceo of robinhood we'll see you tomorrow "fast money" begins right now. this is "fast money. tonight's trader lineup, guy, tim, nathan and jack mills a sputtering start shares of tesla on a rocky road its first day on the s&p 500. and the worst looking chart in the market. why one of our traders say the fundamental trade for this stock is atrocious and later, the general is a 13 billion stock you may have never heard of why you might want to take a bite out of this company right now. two big stories driving the
action today, the covid relief bill in washington and a new strain of the virus spreading in the uk let's start with ayman mohyel w washington, d.c. >> the house is debating that covid relief package and government funding bill. a procedural vote will happen into the house soon and they'll move into the final debate and vote on this legislation mitch mcconnell said that once this bill hits his chamber, his members are going to stay in session until they get this done tonight. that could slip into the wee hours of tomorrow morning. technically the government runs out of money at midnight so as a backstop lawmakers are voting on a one-week stop gap funding measure to make sure the lights stay on until president trump can sign this bill into law, which could still take a couple of days still on cnbc this morning steve mnuchin said one of the signature programs in this package, the $600 stimulus
checks, those could start hitting bank accounts as soon as next week. democrats are already looking ahead to next year and promising that more relief will be on the way. >> this is an emergency survival package. when we come back in january, our number one job will be to fill in the gaps left by the bill and then get the economy moving with strong federal input. >> now, just for perspective, even though this package is significantly smaller than what the democrats had proposed, it's the second largest stimulus package that congress will ever have passed. back over to you >> thank you we turn to what we know on the new strain of the coronavirus spreading in the uk. meg tirrell has the latest on this developing story. >> this one sure capturing a lot of attention we've seen a lot of mutations as we always see with viruses, but
this one uk governments are suggesting might be more transmissible. up to 50% more now, they are still gathering the evidence on that if you just look at the case counts, the new daily cases in the uk over the last month or so, you see a major tick up. they had that shutdown in the uk for most of november, that's the orange line there when they brought case numbers down, when they opened back up they shot up immediately. they said this new variant of the virus is accounting for more and more of these new cases. so, a major question, of course, is do drugs and vaccines that we have for the coronavirus still work against this strain which, by the way, there's no evidence even if they think it might be more transmissible, no evidence that it's more virulent or pathogenic causing worse disease. in terms of the drugs and the vaccines, i reached out to eli lilly and regeneron which make the antibody drugs, they say they expect the antibodies should maintain full activity.
region r regeneron saying they believe their cocktail will be effective and they're doing lab work now to confirm that. in terms of the vaccines, there are early signs, they need to do testing. biontech saying it's too early to draw conclusions, but saying our vaccines mount a strong and broad immune response so we remain optimistic. have not heard from moderna on their vaccine. this work is underway right now. at the same time that pfizer and biontech's vaccine got conditional clearance in the eu, it's comernity, that's the brand name of this coronavirus vaccine now. so more concerns on the covid front, the threat on more restrictions on travel and reopening, stocks able to climb back with early losses with the dow ending the day higher. guy, was this thanks to stimulus how do we digest for these cross currents in the market now
>> i think a lot of it has to do with the banks that was probably the majority of it. the stimulus helps i won't deny that. that's part of this equation as well despite the fact, yes, the dow closed higher. s&p closed well off the lows we saw premarket. i think s&p was down almost 80 handles or so before the market opened it's a remarkable comeback the thing that stood out to me the fact that the vix, which we pointed out a number of times at that 21 level, that went to 30 in a heartbeat you see how quickly risk comes back into the market, despite the fact that the market did come back, the vix closed north of 25. that's your barometer. that's what you have to watch. i do believe that's telling you there's headwinds ahead. >> the financials, tim, you pointed out midday, it doesn't add up if you think things may get worse, there may be more transmissible form of covid out there somewhere lurking in the world, you know, banks are
reopening trade. >> yeah. i'm excited to look to chris verrone talking about the charts and the banks. remember how when we started getting through the lows of the crisis and recovering or some sense of the other side, banks lagged badly and the sense was we still don't know the damage to the banks we know they'll at least have headwinds coming from the federal reserve. so on friday, the news that they can begin buybacks and their capital structures may have more freedom, look, it's just interesting to me that even if the worst of the down draft this morning, guy described where we were with the s&p and the futures, banks were holding that great news from friday because banks were seen as representative of not only main street, which is very much impaired, but that there was at least some sense that banks really had a lot of credit concerns so friday's good news was a world where we're back to good or sometime soon back to good.
okay let's take the pressure off the banks and let them go back to their capital market structure it's just interesting that the market for the banks today in the same way on the way up for the rest of the markets when banks didn't participate, banks outperformed today and shrugged off the news that the broader market took about the broader economy. >> which signal do you accept more as a bigger tell? the vix above 25, you know, spiking as high as 30 as guy pointed out or the positive session in the banks >> i mean, i think you have to pay attention to the vix it's been buoying around that 20 level. in terms of a near-term correction, it's certainly possible it always is i continue to think the markets are going to look at this particular episode of volatility that's driven by the virus or whatever we have going on a little bit differently it comes back to the stimulus bill we talked about this a number of weeks ago. i think the vaccine was a
catalyst for getting something done by the end of the year. you know, the bill is far from perfect, but the deal does have some size to it. it also is front loaded. so you'll have 7$700 billion fal from the sky withinthe first five months of 2021. so that's a big deal just to put it into perspective, it's about 1.9% of gdp over the next two years that's similar to the main packages that we got around 2009, the financial crisis so, you have a lot of this going to consumers, a lot of this going to small businesses. it won't solve everyone's problems, i don't think it's a catalyst for the market to go precipitously higher but i also think it enables this narrative to persist we're seeing better performance out of some of the cyclicals, the banks, small caps outperformed today, which is interesting. i think all of that wraps together where the market thinks, you know what? we have a little bit of a clearer path forward we understand the next quarter will be ugly if we look to 2021 things look
brighter i don't know that i would be diving head first into some of the more speculative reopening trades, cruise lines, things of that nature. i do still want to be in quality cyclicals, industrials, i think about stocks like caterpillar, vulcan you have $10 billion in highway spending in the bill so that's where i want to be right now. >> if you did think there could have been a solvency issue on the horizon on main street, dan, this perhaps, this new bill helps with that a bit, with checks going to individuals, checks going to the unemployed a new round of ppp, potenti poty getting out there in short order. >> yeah. it helps a bit i think that's what you just suggested. the heros act was passed five months ago it was to the tune of more than 2.25 times what we're passing now. with all that time that lagged a lot of our citizens and small businesses, this is basically a
survival package this is not a stimulus package so, you know, all you have to do is go look at those jobless claims numbers over the last couple weeks, the way they're ticking up we looked at the november jobs data it was not good. it's not going to be better in december usually you have this seasonal hiring maybe you see them in amazon and some logistics, but retail makes up a huge component of that. it's going to be a pretty bleak few months here. so i just think it's also interesting that the vaccine, you know, excitement has been somewhat muted by the logistics of deploying it. we've been talking about that for weeks. to think that would be easy, it's not going to be now this new strain. there's a lot of questions about therapies and what might have to happen to the vaccines going forward if this new strain does start to spread. i don't think it's such a clear-cut case that you go in and buy the stock market in early 2021 especially when you consider the fact we're 1% or so off of the all-time highs made
last week. i just think that 2021 might be the year that reality sets in for the investor class here that the economy is going to have serious scars and by the way, we're still in a bit of a political mess here. january 5th is coming around the corner quickly i don't think a heck of a lot it priced in for the senate runoff in georgia >> maybe that's why you buy the markets at this time, dan. guy, you said the volatility index may be your canary in the coal mine, with all these things thrown at the markets, the markets are still about a percent -- within a percent of record highs you would have thought that a new strain of covid, where drug companies have to address whether or not their vaccines and treatments are effective against this new strain, that would have thrown the market into a 'tistizzy, yet we recove. >> the fact that the airlines didn't get walloped today is remarkable as well there are a lot of things to
like if you're bullish i'm not going to sit here -- i can't deny it. the playbook has been for over a decade when the market sells off, fed has your back it's backstop. risk comes back quickly. the risk entree comes back quickly. that's been correct. there's so many warning signs out there, not least of which that warren buffett indicator is north of 183%, which is just historical a lot of people say it doesn't matter i think jerome powell said that last week. we had an interesting conversation with steve liesman around that. to me, it all comes down to the fact that the market is in belief that there's a backstop there. i'm not certain that's the case. now we're closing in on close to $20 trillion of negatively yielding bonds across the planet that's a troubling number. it's almost 28% of all bonds traded there's so many things to be worried about, but the stock market is the ultimate judge people look at that and say there's nothing to be concerned about here the stock market just goes up,
that's true until it doesn't you can see how quickly -- you saw how quickly the vix went from 21 to 30. that's something you should have in the back of your mind moving forward into 2021. >> that new covid strain in the uk sparking a slew of travel restrictions phil lebeau has been tracking those record numbers this past weekend. >> this is bad news certainly for delta, american, united. they have the most exposure from the u.s. over to europe. albeit their levels of travel are down 85%, 90% compared to a year ago the uk travel restrictions just put in place, this is putting a chill on the airline sector overall. essentially it comes down to this many countries are banning flights from the uk. that prompted andrew cuomo, the governor of new york today to say, you know what if you're flying into new york city from heathrow, we want everybody tested within hours you had delta and british airways complying with that request virgin atlantic flies into new
york from heathrow we have not heard a final answer from them. as you look at shares of delta, we should point out their tests for those flying from heathrow into new york, it will be a pcr test so they're going to have to be done 72 hours in advance as you mentioned, all of this comes at a time when we're seeing more people here in the u.s., domestically, who are traveling. and that's reflected in the numbers from the tsa the passenger screening numbers, more than 1 million. friday, saturday, sunday this was expected as we headed into christmas and new year's. that doesn't mean that the travel is going to keep going up from here. it's likely going to stay in this range, maybe through january 2nd. and then you're likely to see it pull back. look at shares of american, southwest and united also keep in mind that the airlines have secured or are on the cusp of securing $15 billio in federal government aid. this would be payroll support. that means that the money would be used to bring back any
workers who had been furloughed in november or in october. they are not going to be brought back under the payroll more than 32,000 those jobs will be guaranteed all the way through the end of march. if you look at alaska, jetblue and spirit, one thing to keep in mind, those stocks have not tsod off today as the legky caracy carriers why? it's that exposure internationally that some investors are looking at saying it will be longer before that international component come back overall all of the airlines are feeling the pressure >> phil lebeau, thank you. tim, maybe this underscores the investment thesis during the pandemic and the early days of the pandemic where you want to be in the more domestically focused airlines as opposed to ones exposed to international travel where it will take longer for that business to come back >> the other thing we're saying, you want to own the best balance
sheet. talking about southwest and delta. i don't think people were pricing back in international travel if you were listening to anyone from some of the best analysts in the space, the airline space, it wuz don't expect international and ber nainterna business to come back any time soon for airline investors you have to be careful about a couple things note the airlines that actually did have equity dynamics around some of the money taken from the government or what they had to issue themselves and those that didn't. also where they are trading as a percentage of 2019 ebita the sector on an earnings valuation basis, not surprisingly, doesn't look that impressive airlines have come back a lot and they're trading at 78%, 79%. it was up to about 84%, 85%. they pulled back a bit i continue to like delta and southwest. i know this trade is something that is a bit more ominous on a day like today therefore i don't think you have
to jump back in here i think the key is we're no longer talking about airline balance sheets unless this really goes pear sh shaped, it's more about recovery rates. coming up, we're in the holiday spirit on "fast money. we'll look at what names you should wrap or scrap from your portfolio. first, shares of intel falling on big chip news that news shaking up the semi space. details ahead. for skin that never holds you back don't settle for silver
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check out shares of peloton moving higher. they are acquiring precor one of the largest global fitness equipment makers the valuation valued at 425 u$45 u.s. million guy, was this a smart move this is to acquire their manufacturing facilities so they can meet better demand >> not only that, and it is a smart move 4$430 million, i think, probabl 1% or so of peloton's market cap. not really -- it's remarkable. not a big deal for them. we played a game in november, best days ahead or behind, peloton. i thought the best days in terms of the stock were still ahead. here we are at all-time highs. gets them into the commercial
market now probably some technology not secrets but technology things they can implement on the back of this. it's a company i believe thinks the best days lie ahead. i agree. the stock can still go higher from here despite the fact that i think it's up north of 154 now in the aftermarket let's get to intel shares. they dropped for a second straight day after microsoft announced they plan to design their own ships. this is down 20% for the year. dan nathan calls it the worse chart in the market. tell us why? >> here's a good example where you want to marry fundamentals can technicals two pieces of news, the apple news that they're ending this 15-year laptop partnership they introduced their latest mac air with their own m1 chip that was not a huge surprise that was coming. the report about microsoft moving away from them is less impactful. it's a smaller customer of
intels maybe up 1%, 2% tops, apple was like 7.5%, 8%. when you think about where microsoft's operating systems software goes on, their biggest clients are intel. it's hewlett, it's dell. it's lg. will the design of these chips by microsoft if it's true have a broader implication on these other hardware oems? i don't know you know, here's the thing this stock is hated. the sentiment is horrible. look at this one-year chart. you said it's down 23% on the year it's down 33% from its 52-week highs in january it's made a series of lower highs. they had massive misexecution. that allowed amd and nvidia to gain market share. the story sounds horrible, but it's reaching some technical support. look at that level down there right around 43.5 or so on the one-year that's about 5%, 6% from here. look at the five-year, you can
see how important that $42 level is if you see this stock move into the end of the year, if it gets down towards there, this could set up a good dogs of the dow play it's in the dow 30 and probably the worst performing stock in that dow, it's underperforming, its sentiment is bad, it's a cheap stock. nothing good on the horizon. maybe it bounces from those levels i wanted to marry those fundamentals and the technical inputs it should be on your radar bad press on the short side here back to those lows that's why i'm thinking about what it looks like early in the new year >> another headwind for intel, which dan didn't mention is the manufacturing issue that intel has faced with its newest chips. if it wants to outsource those chips, the manufacturing of those chips to taiwan semi, guess what, u.s./china relations are not that great all it takes is for the u.s. to say no more taiwan semi. this is a national security
issue. jeff, where do you stand on this notion that intel could be a dog of the dow play? >> i think that's true in the near-term. you can get a short-term bounce. i look at the chart and see around 45. i think it bounced off of that level seven times over the past three years. there's a clear line drawn in the sand there i would use that as an indicate he eindicate of whether the stock bounces they continue to bleed market share. they had production delays the stock is not dead. they're going to grow revenue about 5% this year eps will be flat next year doesn't look quite as good what worries me the most is what management has been doing to try to right the ship. it's more about what you might call financial engineering reducing capex, increasing buy backs versus focusing on the real r&d issues. that is what i worry about
longer term. >> we're just getting started on "fast money. here's what's coming up next >> tesla hitting the brakes as it makes its s&p 500 trading debut. first day jitters or more downside ahead that trade next. and should you bank on the bank stocks in the new year? we'll go off the charts and dive into that sector that and a lot more wh "st ne rurnsenfa ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ automation can solve that by taking on repetitive tasks for us.
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twitter. hopefully they're video questions and we'll try to answer them live on the air. shares of tesla slamming the brakes today the stock falling more than 6% as it makes its debut on the s&p 500. reuters reporting apple is targeting its own electric vehicle as early as 2024 shares popping late in the day on that report tim, what did you make of the tesla action and this report that apple may be coming in, this underscores the idea that there is competition looming >> yeah. five years ago or four years ago, you know, the speculation around apple and tesla was interesting. i think the sell the news dynamic of tesla here, especially after the two announcements between the stock splitand the s&p were 150% in the company since august so i just technically think none of this is a surprise. i talked for a long time about
the competitive landscape. i don't think anything about that has gotten easier but it's clear to me the reason people own tesla is not because they're fearful this is an ev company. it's not an auto company it's not an ev auto company. it's a technology play so i don't know that in the longer term or in the medium term this will knock tesla investors out of their conviction technically the stock has room to pull back it's extraordinary those two . only three days left until christmas. we're in the holiday spirit on "fast money. we thought this would be the perfect time to play a new game of wrap it or scrap it that's right a festive version of trade it or fade it. it is here created by the one and only guy ad adami. tesla was on a monster run earlier this year. it's not the only nons&p 500 stock to surge zoom zipping 510% higher this
year guy will kick things off wrap or scrap zoom >> you know, as you know, i've been doing this show 37 years next week. if the only thing people remember me for is wrap it or scrap it, that's okay in my book in terms of zoom, you wrap this sucker you mentioned how much it gained over the year, it's actually -- it's actually down 30% from the october high it went from 580 to 380 in a straight line. go back to september, look where it accelerated from. it was at a 380 level. that's where we held as much as i hate to say it. things might be getting better in the back half of next year, they're not getting better soon. zoom is here to stay you wrap it here >> jeff, you wrap it or scrap it >> as much as i hate to disagree with guy i'll scrap it here you have seen this consolidation for a while. so the stock could go up from here on an absolute basis.
in thinking about relative performance and where i would want my money, i just think a lot of growth is reflected in the current price. to me i just ask the question of what's left here maybe i'm crazy, but how much of the first mover advantage that it has or the brand recognition that it has, how much is that worth in terms of a relative valuation premium? i just think you're at a point where the growth expectations are baked into the name, it's far too high i think other companies can replicate this technology fairly effectively over time. for me, got to scrap it. >> all right let's get to square. it rallied more than 260% in 2020 so far. tim, wrap it or scrap it >> you know, i have been on both sides of this trade. i still own a position i have to wrap it. as much as the momentum in the name said to scrap it. i'm happy i made the kids so happy so close to christmas.
who would want to disappoint these cute kids. the dynamic around the bitcoin purchase of 50 million shares the first week of october, 50 million purchase translated into a 30% move in the stock or about a $20 billion move in market cap. it's because the cash app, which has proven to be a sticky and growth dynamic for square overall is allowing this boost factor which gives users the ability to actually get bitcoin. and i think this dynamic along with the dynamics around the company and how they have grown to be a major player in terms of everything you do possibly in terms of your financial world being managed off of square, i'm forced to reassess some of my assessments about how expensive it really is >> yeah. so i'll just scrap this thing here listen great reasons to wrap it. you know, the cash app, the bitcoin, the growth this year on a gaap basis they'll lose money.
trades at a ridiculous multiple to the non-earnings or the adjusted earnings. it doesn't make sense here to tim's point, the stock has gone up 50% since the end of october. it's up 600% from the march lows at some point there has to be some sort of financial reality that comes into this stock market with the growth opportunities of some of these companies. yeah it's a transformative company, but does it deserve to be at a higher market cap than goldman sachs? i don't know so at the end of the day, i think when you think about such a short-term gain in the last couple of months there needs to be some sort of correction here in the names new investors can re-evaluate what the next leg of growth is people who bought this thing in march are not thinking about adding to it here i don't think. >> all right it's the general's turn. the snap, up some 230% wrap it or scrap it, jeff?
>> all right so i'm feeling grinchy here. i'm scrapping this one, too. it's along the same lines as zoom for me. they're getting a i lot right. if you look at the last earnings revenue, they beat on eps. they're converting trial campaigns to full campaigns. things are going well but the stock is up 85% since october. so to my point earlier, i think you get to a point where trees are not going to grow to the sky and the growth and user adoption baked into these price levels is far too high i would scrap it here. maybe look for a post-holiday sale and wrap it around 40 >> trees might not grow to the sky, but maurice's kids will grow they will come after jeff mills because he scrapped two stocks and he made those guys and gals cry. not cool you look at the quarterly report back in october. it was ridiculous on so many different metrics. so many analysts are behind the curve on this. yes, the stock had a tremendous
run. they'll continue to build on the quarters that we've seen they made an acquisition since then which i find to be remarkable the growth is still ahead of them i think facebook's -- some of the situations that facebook is facing right now is giving real tailwinds to snap. i would wrap it. >> lulu up 62% year to date. wrap it or scrap it? >> i would wrap this one, it's a short-term wrap or gift. the stock has been consolidating since the summer here. you saw what nike reported, digitally drove that quarter here iny we' nthink this thing will out early in the new year. >> tim, your quick take? >> quick scrap sorry. sorry maurice. this is a story where you're at
around 75 times trailing 12 months at some point this pull forward is just that i get what's going on with abc pants and the men's opportunity and the international opportunity and the mirror acquisition. but at some point valuation matters a lot with a retail company. >> coming up, it's been a crushing year for crude oil. will energy markets rebound in 2021 we'll dive into the option picks for a look ahead >> first jeff is bullish on a name you may have never heard fore his under the radar stock pick when we come back.
welcome back to "fast money. it was a wild day for the markets and the dow managed to eke out a gain jeff mills says there's one under the radar company that could be setting up for big gains amid this volatility he's here with the fast pitch. jeff, take it away >> i think this is cool lehere it's a play on the trend in supply chain automation. amazon has 100,000 robots across its fulfillment centers. that's not going away any time soon and more and more companies will operate this way.
the company is called cognex they will become a more integral part of the supply chain infrastructure they operate machine vision technology so they make software and sensors used in automated manufacturing. they can inspect parts, they find defects, verify proper assembly right now there are 360 million factory workers worldwide. 35 million of those workers are simply doing visual inspection they're sitting at a desk staring at parts this company has 70% gross margins, no debt apple is a customer. amazon is a customer to speak to amazon, fulfillment center sales are booming so their e-commerce and logistic sales are 20% of their total revenue now. that segment is growing at 50% per year management thinks that can continue just given the fact this will proliferate across a lot of different industries. the last thing i'll say, this company has been around for a long time. they've been integrating ai into
their software since the early 1980s. they've been able to constantly adapt their software to the changing markets so they started inspecting typewriter keys. then they went on to semiconductors, then autos, smartphones. now to this logistics industry as things continue to evolve, as all of these industries coalesce around these fulfillment centers and e-commerce, this company will be a major beneficiary. >> i think dan has a question for jeff >> yes this stock is up 48% on the year really interesting i'm looking at their sales and earnings in 2019 they both declined double digits, now really the gains that we're seeing in 2020 are not that significant this is a very expensive stock without a whole heck of a lot of growth how do you get to those 360 million workers being displaced and this thing growing into this valuation? >> yeah. that was a stumble in '19 and
maybe in '20 they saw slower growth in consumer electronics a lot of that had to do with apple. a lot of this will grow outside of automotive and consumer electronics. you had a double whammy of autos slowing and consumer electronics slowing. as this technology is integrated in a lot of other industries i think it can grow into the valuation. dirty math, if you're able to grow 20% revenues and eps, which is really what management is forecasting right now, thatthat's that'that's $ per share by 2030. so you're talking about 225% upside of return from here i think you can get there as long as the trend continues in this direction >> no more questions it is time to vote are you buying jeff's pitch on cognex guy? >> can you read my smart board for me
>> it says space lly sprockets >> when jeff said cognex, i thought of cogs and -- >> the jetsons >> did you know that >> i knew that >> great job by you regardless it's a great pitch the stock -- the run has been remarkable they just declared a special cash dividend. analysts will have to catch up to this and that $15 market cap in this world puts them in the sweet spot for a potential acquisition. i'm with jeff mills on this one. >> tim seymour, what do you say? >> yeah. i'm a buyer of everything that the general is selling ultimately -- i do have my smart board. i don't want to get scolded. it allowed me to check the box on the three things. any time you can check the box on 5g, e-commerce and logistics, you have to be a buyer
good job general mills >> i've been giving tim a tough time since he had that piece of paper with ball point pen scribbled all over it. dan, what do you say >> listen, i thought it was a great pick also. a good under the radar thing but i'm a seller here at $80 at a new all-time high. if you go back and look at the chart from 2017 that just broke out in the low 70s, you get a pull back there and consolidate. that's when you want to do it. i don't like that hiccup in 2019 it sounds like a lot of consolidation there or at least issues with the potential there. i'm a seller here. >> all right two buys and a sell. the desk has spoken. we want to know if you are buying jeff's pitch on cognex vote on our twitter poll the results later. coming up, big banks outperforminging today we'll tell you whetherhis tis a breakout much more "fast money" straight ahead. today we're going to fine tune the dynamic braking system
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i think today was an interesting day. if you look at the last several weeks, a lot of macro uncertainties, yet the banks quietly acted well today was an example of that the bank index, the s&p broke out. it's meaningful. most importantly when you look at the banks relative to the market they have really started to turn really reversing a two or three-year down trend. the leadership we're getting from the banks here i think is a good sign for what the group can give you next year a big part of this call is rates. that's another thing about today that was so remarkable how resilient ten-year yields have been. they traded down to 87 or 88 basis points this morning. they held, reversed higher to 94, 95 bips. so that means the curve is steepening steeper curve is a good environment for banks. i wonder if we're setting up for a pare trade in '21. this is your pnl, if you're long
banks and short tech this started to turn over the last number of weeks we're forming a base rates up is supportive for this idea as well what names do we want to own you can't talk about the banks and not talk about the biggest and the best chart in the group, and that is jpmorgan another stock has really has broken out over the last several days i think this will give a run back to the old highs in the 140, 145 neighborhood. g again, this for us is about the turn in the relative performance versus broader market.merging a. we have some breakouts in the brokers. goldman sachs. very quietly goldman has started to outperform here over the last several weeks. that's a major change in character for this stock it's frankly been 12 or 13 years since goldman last worked as a leadership name.
nice relative breakout our favorite name in the group, our favorite name for '21 is morgan stanley no one has made any money in morgan stanley in 20 years that's changing here in a very, very big way this is a huge breakout over the last several weeks here. i think any weakness into the new year should be bought. this is one of our favorites i think the banks in general are starting to assert themselves. what we have said is it is a broad market >> chris, is morgan stanley one of your best ideas stock-wise overall or within the banking sector >> it's one of our favorite ideas in any sector, in any group, in any geography. this is one of the best charts in the market. >> chris, thank you. chris verrone. >> thank you guy, that's some endorsement by chris >> it is actually i think dan spoke to this a while back saying morgan stanley looks like one of the best charts he's seen. chris and dan are singing the
same tune. i'll look at citi and say we've done a good job with that one. go back to october when it was trading $42 a share. 59% of tangible book and i think we outlined a cogent argument why it should be trading $61.20 that's based on it trading back to 85% of tangible book. look where it closed today 61.20. it's a reasonable place to be taking money off the table i think banks can go higher. but just look at the run it's had. you have seen fits and starts in city city specifically, if you enjoyed this run, i would be paring down some of the gains. >> long banks, short tech. dan, what do you think >> listen, this has been -- i've been on that train largely because the charts look that way and verrone has come on numerous times and i agreed with him. i also agreed with tim, mills and guy who say this is the best reopening trade out there and it's going to be a multi-year thing, not like the v reversals
in the hard hit names in industrials and transport. coming up, the crude awakening. oil prices tumbling today as fears escalate we'll tell you how options trader are dealing with the selloff. and jim is talking with the ceo of robinhood that must-see interview is at the top of the hour. more "fast money" after this can get our best deal. ers really?! mom! at&t has the deal for new and existing customers! i will. so what'd she say? wrong person. it's a guy named carl. but he's very excited and on his way. word-of-mouth advertising. it's what they did before commercials. it's not complicated. everyone gets our best deal, like the amazing iphone 12 mini on us.
welcome back to "fast money. crude prices dropping today. but mike spotted unusual options activity that could signal a huge year ahead for the space. mike, what did you see >> we were looking at exxon. this is a name where we saw calls outpacing puts by 5 to 1 most active options were the january 2022, 52.5 strike calls. over 15,000 of those traded for $2.66 on average and call buyers are getting the stock will rise above that strike price by january of '22 that would represent a 30% increase in exxon share price. the options market still look reticent they're forecasting a dividend cut as a significant possibility
going into the new year. >> all right thanks for that. up next, results of the fast pitch and your final trade turn on my tv and boom, it's got all my favorite shows right there. i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy. focus on what matters to you with thinkorswim. ♪
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all right. it's time to reveal whether you at home are buying jeff's pitch on cognex. survey says, nope. nope nope nope not buying the pitch better luck next time, jeff. time for the final trades. tim seymour? >> so sad for the general. how about general motors i think you have a case here where the pullback to the 50 after a big run is something you want to now begin to add to. i like gm. >> jeff? >> twitter might not be buying it but i am. supply chain automation, a long runway cognex >> dan >> so we talked about the worst chart in the market. that's probably intel. one of the best charts is microsoft. look at that thing looks poised for a breakout into the end of the year possibly into the new year. >> guy >> did you really know the jetsons or did somebody tell
you? >> i knew the jetsons. >> really? n >> she was the maid. >> i know things >> apparently. good for you i'm proud of you fireeye. that sucker is going higher. we'll see you back tomorrow nigh i am here to level the plain field for all investors there is always a bull market some where i promise to help you find it. "mad money" starts now hey, i am cramer welcome to "mad money," i am trying to make you some money. my job is not only to entertain but educate and teach you. call me at 1-800-743-cnbc or tweet me @jim cramer there is a reason i am on every show with the same message there is always a bull market some where