tv Fast Money CNBC September 21, 2021 5:00pm-6:00pm EDT
reaction, it might come then at this point i feel as if we discounted what we know and we are not seeing necessarily the ripple effects of it >> we will keep an eye on the china market more broadly as it reopens. we are out of time here on "closing bell. we look forward to that fed press conference tomorrow on the show >> live, we are looking at new york city times square this is "fast money. tonight we are tracking the after hours action of fedex. shares are later and earnings are about to kickoff plus, streaming lower, new numbers around disney plus later, uber kicks into overdrive. the stock rallying over 11%
today as it says it could turn a profit as of this quarter. first we start off with a failure to bounce. stocks giving up early gains to finish lower, this follows yesterday's massive sell-off the s&p is down four straight sessions what is today's failure to bounce tell you about where we are in the market now? guy? >> it sounds like a matthew mcconaughey movie. karen said it last night, she was hoping for a flush on the open and would buy, and she got the opposite having not spoken to her i am sure she was dismayed and anticipated this i don't think we are going to collapse here, but i think that 4100 level we have talked about a number of times in the s&p is there. you are still in the mid 20s which is concerning.
this fedex announcement is not going to help either i think there is further room to the downside which again i will say i think is a good thing if you are long-term bullish. >> karen, the failure to bounce. yesterday you said you had a shopping list. would you hesitate to deploy the shopping list tomorrow given the action we saw today? >> i was hoping for that big whoosh down. i would rather buy things lower than higher. a day like today i did nothing this is disappointing. the rally faded by the end fedex, i don't know if that will help we will get to that. i am not a buyer i want to see what happens i feel like the evergrande thing won't be a contagion we will
see. nothing for me to buy today. i would like to buy things lower and would rather not buy on a bounce that is dismaying and disappointing. guy had it right >> you are with guy on the 4100 s&p 500. was there anything under the hood of the markets? unchanged from yesterday's close? not that exciting, but there is movement underneath. >> there was like karen i was looking to see how the market would open and act off it it failed almost immediately and chopped around most of the day i expect if you get to the 4100 it will not be in a straight line it will be one step forward and two back i would guess the july low where they were pushing out some consumer and analyzed plan
that was about 4230. the fed meeting tomorrow and the press throws a monkey wrench in there if they want to maintain credibility, i think an about face because of the stock market volatility over the last few days would be a very bad thing i think all of these days here mixed together last night on the show talking about the interesting conundrum we might be faced with in the fall we are going to see decelerating growth but accelerating earnings growth tonight we will talk about fedex and adobe. that may not be the case that could be the case where we are miss aligned where the price action is to date or at this current point. we will know that as we get to
the close of q3 and see possible announcements for q3 and 4, too. >> we are on the precipice of the next we have this evergrande thing looming. if you look at what citi said, it is all over the place whether they would step in that tells you where we are in terms of the thinking on this and how it plays out >> the fed doesn't need a whole lot of stretch to species tem i can -- see systemic risk i don't think we are getting anything tomorrow. i think we were not getting anything tomorrow before the evergrande thing the feds have to be aware of it going into this meeting from two months ago
i do think markets wanted to believe on some level that market volatility con tagion factors could be nothing more than we described it a market that came in at all-time highs it behaved almost like it did september 3 of 2020. if you think about the dynamics discussed, dan talks about earnings as good as they will get. whether that's bank of america or morgan stanley, they have all talked about this. normalized earnings are not great for this market although it's where we wanted to be a year and a half ago. today is frustrating if we wanted to package this nicely. we have monday and turn around tuesday and we did the opposite of yesterday although not as
extreme. gave back 25 s&p handles in the last 15 minutes of the day some talked about the interday volatility i think largely markets will be looking at valuations. we have to be paying attention to the fed more fed equals more volatility ahead, but it's not coming tomorrow >> is what has happened in the last 24 or 48 hours, guy, does that change your opinion of what the fed will come out and do tomorrow regarding a paper timeline it has the cover to say we are not going to do it and still maintain their credibility they could say we are watching things and we are going to be cautious >> fascinating question. the right question by the way. i don't know how to answer i will say this, if you think about it in a bizarre way,
what's going on could give them the perfect opportunity to pass the baton off. if things do go pear-shaped further than it has, theoretically there should be a place of market racing towards u.s. treasuries. i would submit if they want to play this coyly, they would use this as a place to begin but no shot they think like me >> that's not a surprise from you. maybe one of the master conspiracy theorists on our panel. that the fed would make the rates go higher, but that evergrande would suppress that >> the housing dynamics are off
the chart. the fed is buying $40 million a month in mortgage backed securities which seems unnecessary given where mortgage rates are. if anything, they should hint to that the problem with evergrande is actually a home builder for all intents and purposes it seems like if we want to barbell this thing, that would be perfect i think the fed should start to do this. we looked at the minutes from the last meeting it seems like there are a lot of governors that want to do this i think it's important to remember that the stock market, not me as much -- i don't think the fed uses this as a massive barometer, but they are concerned if it goes down too much the stock market is only down a few percent. when they did an about face on their hawkish place, the stock
marked had gone down 19.9%, as guy will remind us they are not there yet if they want to start doing this, it's probably time to pull the rip cord >> tom, it's good to have you with us. you are a bull everybody knows that but the failure to bounce today, does that make you rethink where we are in terms of market sentiment? >> i think the market held up incredibly well today. evergrande is the biggest shock to hit the financial markets since covid. in a way it's scarier because it involves quite a bit of debt if people look at evergrande it involves product and spvs. i think the fact that the small caps rallied and the s&p managed
to hold flat shows that the shock of yesterday was the big impulse and today is a little bit of the ripple effect i think it's quite constructive actually >> you think it's constructive, but for all of the reasons you laid out, why the market was constructive because evergrande is a hairy problem, isn't that a reason to be cautious about the market longer term since we don't know how this will play out and don't know the impact on not just the chinese economy, but the sentiment of the chinese consumer unlike our markets, the chinese retail investor plays a big part in the markets over there. a lot of wealth is tied up and losing money can have an impact on the psychology and then, therefore, the economy >> yes yesterday was a big shock to
equity markets but they barely budged oil barely moved ten-year barely moved and even currency barely moved. this was a shock that hit equity markets globally in asia, a lot of people have money tied up in digital products now if i think about what that kind of means, i think we are just seeing the aftershock of retail investors who have been negative, withdrawing money from equity for six of the last seven months with the worst reading last week since september of 2020 so you have a cautious, retail market that i think panicked yesterday. institutions haven't dived in because they are expecting
aftershocks and they think if it's like long-term capital or ler lehman, it will take a while to repair so i think today is a pretty good outcome i think stocks will rally hard off this and it's ultimately because unless evergrande has a re real effect -- >> this is karen finerman. if you are bullish of the sectors, what do you like? >> we have been looking at the sector relative strength we are going to talk about that tonight. i would say it looks like the market is trying to decide what is going to be a battleground.
i think fang isn't as strong as it looks and i think si cyclicals -- investors are waiting for the market to tell them where the strength will be much my guess is if the economy continues to be in good shape and covid is retreating, i think you can't a cyclical tilt in your end p >> thanks, tom >> are you there with the cyclical tilt? >> i realize we may be looking at gdp that is not what we were expecting. maybe down four percentage points but maybe they do a nice job
analyzing covid. there is no question we had the second highest crescendo in terms of infections about six weeks ago. a lot of this led even into september. cyclicals priced this in aggressively as we got into july i think a lot of that pain will still have to be assessed. we will talk about fedex in a second but if you look at transports and industrials, the earning power of a lot of these companies has never been better. this is one place i don't think we have priced in normalized earnings >> we have an earnings alert on fedex. the stock lower in the after hour special frank has the details. >> fedex dropped about 4%. a big miss for profit, more than
50 cents per estimate. this is what was said in the release -- >> that's largely hiring contractors to run the ground network that handles e-commerce. you can see the revenue is up 9% but the cost of both salary and equipment, hitting margins across the board margins were above 8% a year ago. fedex lowering the top and bottom line of its range right now you see fedex shares down about 4%. ups also trading lower both of them under performing on concerns that labor costs are
growing while e-commerce is slowing down >> we have to go karen first and foremost what did you make of this quarter? >> it was a little disappointing. frank highlighted what it was. cost and labor shortages and needing to be less efficient by outsourcing. so that's frustrating. but i am sort of surprised it is not like the stock had a super frothy multiple going into this it had traded down for weeks they lowered their guidance a tiny bit more than the amount that they missed by. yet the multiple came in it seems overdone to me, but clearly i have been wrong about this one for a couple months i just think -- one thing i would want to hear on the call and i listened to it after the show they talk about the problems
with efficiency and labor and i think they mentioned surcharges for fuel which is a plus and minus. but is that getting better the freight margins were good. all of that having been said, i think a 12 multiple on this current year's earnings, that seems low to me, very low. i'm surprised the market is responding this much, but i want to hear the call >> this is the headline which may partially address whether karen was asking the headline is conditions in the first quarter were more challenging than anticipating and expected to extend longer. obviously investors want more detail than that, but, guy, what are your thoughts? >> you have to pay people more for them to work it's hard to say six months
later, by the way, we are paying you less this is stylistic. they chose yesterday at 4:15 to announce price increases and then dropped this bomb on us today. karen is right fedex express, that's half of their operating revenues and operating margins were a disaster i power trained this many months ago. it went up maybe a day and it has been brutal ever since the ups news didn't help either. february is the line in the sand but there is not a lot to like here and it speaks to a bigger problem that we talk about all of the time. fedex says they are wrong, by the way. >> the call is about 19 minutes in we will keep you on top of the story.
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welcome back to "fast money. we are watching bitcoin closely. down about 7%. the drop accelerating in the last 45 minutes or so. this is happening just before the first opening for the chinese stock market since last week we will dig into this story a little later on and also tell you about some interesting comments gary ginslor had to say. >> and you beer rides higher after saying it may hit profitability this quarter this is earlier today on cnbc. >> our gross bookings level are 35 to 40% above the ipo and we are clearly on the path of profitability. in the second quarter we leaned
into supplies especially in the united states to reinvigorate our driver base and grow our driver base in the u.s we are seeing the benefit of that early investment. in terms of volume, our best week was last week etas are at their best levels since the beginning of the years. service itself is getting better >> so uber is in on the action too, dan it hit the metric in terms of profitability, dan what do you make of the story? >> i just don't think you are in it for profits in 2021 or 2022 if you look at consensus estimates they are still calling for an income loss that's on a 20-plus billion revenue base the stock was down 30% from its
all time high much it evaporated the entire move from the vaccine announcement in 2020 here. i think the timing is right to get out there and fast and loose with that profitability. i think there are a lot of investors who have a defined understanding what they think profits are in this market i don't think that's what this ride share speaks to >> fast and loose. damning words and not a surprise coming from you. but does that bother you coming from this adjusted profit metric the company chooses to lose? eyeballs back in the tech bubble thing. >> don't get me started on stock base compensation. the story is not -- the
valuation is not about getting to profitability this calendar year or not. the stock has been public in changed years. it came at 45. a lot has happened since then. a lot is terrible and a lot they did a good job uber eats is interesting i think he's a great ceo i am not long in uber. >> tim, this is something i have never done as pairing, uber/door dash >> i will play by the rules, uber the stock was down 40% going into this ak that they filed they said service is getting better i think it had to. new york city there is an existential risk
nothing is affordable for available. this is important. i think other people are figuring things out while they can. the stock, no one is valuing it on profitability soon. it is a bombed out stock relative to february of this year i think it has more room to move >> we are just getting started here on "fast money. >> disney losing some magic as subscriber growth slows. afing.us a big bet on bettin drtkgs making a $20 million offer to buy a gambling company from across the pond who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions.
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disney shares dropping today. le let's get to julia. >> the cco this afternoon said at the goldman sachs conference he said that while they are on track, that growth numbers will be choppy. he said paid subscriber numbers will grow by low single digit millions and also he talked about head winds of delta-driven delays
but he did highlight areas of strength including the theme park saying they like the recovery they are seeing and that bookings increased between the fiscal third and fourth quarter and said that crews ships bookings are higher in the second half of the year than the first half they also said they may be interested in sports driver which could be another growth driver for disney. but they are down on the subscriber warning >> thank you, julia. so this sounds like a testament to what disney's valuation is made of. he said all of the things including sports betting interest which would have gotten investors excited, but we are down 4% because streaming is not
panning out to what it should be in the near term >> the driver of that valuation is starting to slow and now it appears to matter. look at some of the things that tom rogers has said over the last six or nine months, lining up with that the may low was down to 169. we traded down 169 was the line in the stand. if we were to break or the market were not to cooperate, the 150 level, and i think we are looking back at december of 2019, that gets into the crosshairs quick so disney is at a critical level at 170 >> do you think it's critical, tim? >> i was going to point out the chart bothers me more than the headline let's see where we go. we have had a couple of dances,
but, also, we have had a cluster where we have had shorter term and moving term. the competitive landscape especially around folks like apple and amazon are the ones that have unlimited budget to throw at this. the covid resurgence in terms of production delays, big deal, that's not the issue the valuation for disney has been an issue. it has never mattered for netflix although they have struggled on some level. i don't like the timing of this announcement it can be interpreted a number of ways, but it is not a good headline >> karen, at what point do you think disney is worth taking a look at? >> this was the engine driving it, not the profitability engine driving it
it costs a lot of money to build it it is the future of it disney that is a supply issue in that the delta variant has pro kept them from having the production they wanted if it was built on a future value later. but it is disney it is premium. if it comes in, i will take a look can i go back to guy and say if it breaks 159 where is it going? >> i think 150 i think it was early december of 2019 the stock traded up to 150 and failed i would say close to 169 and i think that 150 level is smack in the level. crypto was down more than 8% moments ago. coming off the drop it is down
5% we will dive into that and draftkings taking a $20 billion for fellow company we see increased efficiency connected to more comfortable homes. emerson's energy star™ certified sensi™ smart thermostat uses geofencing to simplify how homeowners manage comfort and costs. emerson. consider it solved.
bitcoin is selling off it happened after the top cop took aim kate >> a warning for kricrypto exchanges. and said if they don't, they will be hit. he said -- he also says the agency will continue to bring enforcement cases against those crypto cases. he also highlights that there are potential problems with lending or trading platforms
if that does come to fruition, he says a lot of people are going to get hurt. also talking about stable coins. he said those look a lot like banking products but the sec doesn't have the full gamut of what they need to regulate them. finally, he highlighted a report coming from treasury and the sec. that is expected in the coming weeks. bitcoin, meanwhile has had a rough volatile couple days it dropped below $40,000 in the past couple hours. those losses did accelerate. it is unclear if that is the key driver or more of an action in asian markets as they look to open an extremely volatile week for
crypto currencies. >> also he said i don't think there is long-term viability for five or six types of money obviously there are a lot of coins out there and rug pulls. developers put them out and then take off with the money. it's unusual to have the chairman of the sec comment on an asset class with such strong words as wild west >> we have seen this before. the point about these alt coins is reminiscent of the late '90s. there was a land grab for anything you could throw dot come on the end of i think there are a lot of people in crypto that don't mind it being regulated of course things like this
should be regulated. i think the volatility you have seen over the last few days is not that unwanted. our friend b. kk. says it is ina the adoption phase if you are an institution adopting, you would like to see pullbacks and the rallies from july which are consistent with changing fundamentals or accelerating positive fundamentals i think there are a lot of people in this crypto space who see this as a feature, not a bug as relates to underlying assets. >> or maybe it is a tell of what this crypto currency is. if it is going to pull back in times of market volatility, in this case the evergrande we know
a lot is traded out of asia. there is probably a mad dash to raise cash i don't know that it's a coincidence that we see bitcoin fall below 40 k. >> i think the higher correlation and theory more so because it had a bigger move in 2021 is not surprising at you will think about the pressure on the regulatory front and what china is doing in terms of currency and tokens this is largely expected institutional adoption, absolutely more sec and regulation means higher prices for this as set class. once you can stamp it, it takes a loss of pressure off major institutional buyers because they won't be having a
forray into the wild west as quoted i think the sec needs to get around the issues and spent a long time doing so not terrible >> coming up, draftkings making a huge offer for a fellow betting giant. all month long we are highlighting here is the founder of this company. >> i am a proud latina, entrepreneur it's important we find a way to support the latinas for the future by supporting them we are supporting them and shaping the country. so support them because they are giving their heart and soul. gracias.
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that the sports giant is offering up to $20 billion to buy british company entain there is a twist they already have a partner in mgm and any deal would require mgm's approval m let's dive in deeper >> this seems like a mess that draftkings is diving into that they would have to get mgm's approval >> exactly i came to work to look at things, and here we are. mgm has had this partnership with entain. it has started to accelerate nicely they are poised to be number two
in sports betting in the united states there had been an offer back in january to buy out entain. they had to wait six months. that would be june there was a thought that mgm would take another shiites at it -- shot at it but draftkings came out of the blue this morning. it's not clear what their strategy is for it >> how do you play out the strategy if you think mgm will not let this go and happen and will make a higher bid and likely get entain in the bend. >> they could come over the top.
we did speak with mgm today and they are not saying a ton other than they will sit down with the parties involved and see what makes the most sense with shareholders scenario one is that mgm has the right, as you pointed out in your opening, to buy out the other half of bet mgm. the question around that, melissa, is what technology and what ip comes along with that other half of the gb or does the technology go with the parent company, entain. mgm could go over the top and trike to ta dke down all of it. it is a large business, in some markets that aren't fully
legalized yet. it is something that we find compelling about mgm >> how do you play the chess board compared to the other competitive landscape and consolidation. if you think about the camps that have been moving aggressively, it has been the casinos and dedicated and pure play digital online sports betting plays. who are the next folks that have to come together analysis is one way or another, draftkings prevails or mgm does and either way you have taken one big off the market >> this is the way we have looked at sports betting over the last couple years. you need market access, access to customers, market access they
have had to buy. they merge with tech through their transaction and have been ruling that out over their recent pass. questions have come up all day today as to whether that is working for them or whether they felt like they needed to goin another direction. the case of mgm, to take it one step further, let's say they buy out the other half from entain, will they be capitalized on the technology side. and does that bring them to some of the smaller players that are b to b tech providers. many are on our coverage list and without any likelihoods around them, when you look at that framework, you will start to see that they have some and not other aspects of that fully
capitalized value change you laid out >> earlier we were talking about disney and some comments made at the goldman sachs conference about getting into sports betting. we saw how they got into it by buying the technology. do you see any logical fit there possibilities? >> i prefer to stay away from making specific matches, but what we have seen are companies that have shown specific strength in delivering content we have seen companies -- and you can look at our published reports on companies that bring specific technology that are more eye gaming. one point i want to make clear is that i think the public focus on sports betting is one thing
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>> fed ex. >> karen >> mgm more valuable today on the heels of the draftkings bid. >> dan >> the fedex news does not sound great for amazon >> guy >> it out. "mad money" with jim cramer starts right now my mission is simple to make you money. i am here to level the plain feel 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," welcome to cramer america. i am here to try to make you some money call me at