tv Fast Money CNBC September 29, 2021 5:00pm-6:00pm EDT
>> it's been an extraordinary week for the dollar, and the euro bearing the brunt i wonder whether powell will try to pull back a bit of that structure comment that came yesterday. we are out of time here on "closing bell. thanks so much for watching. "fast money" starts now. live in the nasdaq marketsite, this is "fast money. i'm melissa lee tonight on fast, trouble in the charts, and one chart technician says go ahead ready for more down side ahead. plus, game on. netflix shares rallying, as they make a big move into video games. options trader and why they see a breakout
we start out with the one stock that is just screaming, that inflation may not be so transitory dollar tree announcing price tykes. they will start selling products at $1.25, and $1.50, as the company grapples with supply chain restraints did dollar tree just sound the alarm that inflation is here to stay and the consumer will ultimately pay the price guy? >> that's the rhetorical question of course they're sounding an al alarm. it's two names you're not buying sequoia, so it's "dollar" in the name that's drawing your attention it's like going to mcdonald's and sake we don't have big macs, but we do have fish-filets
i just watched jeremy siegel, who is bullish about everything voicing concerns about the exact things were talking about now. i think jerome powell, who used the word frustrating to describe the inflation that had been longing for, is start to go feel it. >> if it's frustrating to him, imagine what it means for the corporations deal with it on a daily basis. to be fair, they did raise prices a bit ago they had a stray container ship that had to be turned around because of a single case of covid, leading to a two-month delay. to actually announce officially, tim, that prices are going to go up to $1.25, $1.50 i don't want to say permanent,
but it's more permanent than just increasing prices and hoping to pull it back. >> forget breaking the buck on the mutual funds, and what that meant for mutual fund investors. my kids are crying in their rooms, because on a saturday afternoon there's no greater fish for me handing them five bucks, and for them to walk away for halloween decorations. this is great for investors. you talk about dollar tree plus, this is maybe the vehicle that for investors is a perfect hybrid of where the skus and average price will still be $is.50 in the future, but they 340 dollar-plus stores claim there will be more by the end of 2024 this is a change the company has been looking at for a long time. back in august, as you noted, they gave an 8% downgrade to
full-year guidance, and they talked about ocean carriers, where the commitments were once 85%, and now expecting 60% really this is a kay where they are concerned about both inflation, not just inflation in terms of where we are seeing natural input costs, but obviously on the labor side, too. they have to change their model a bit, as much as the consumer -- i hate this, i really do. >> and your kids do, too i love dollar stores, by the way. no better joy that going in and picking something up for a single dollar. it also enables them to diversify their products according to what they say, but they also increased their share repurchase plan, which is another plus. >> first of all, i think this has more to do with the supply
chain versus anything else as tim brought up, with the labor market, you can't get any service industry people to be in a restaurant, to be in a bar, to be in a hotel. this makes perfect sense to me the bigger question? how did they keep prices at a dollar for as lodng as they did isn't that concerning? isn't it more concerning there was absolutely zero sign of inflation or proof of inflation? i think that this is a perfect storm for these dollar stores. it allows you to raise prices finally in a lot of these names, but when you look at a ten-year that is still around a percent and a half, i think that's sounding the alarm bell on inflation, never turning back is probably premature where are all these things made? china. this is the most obvious thing
to see this sort of transsorry, yes, that word, transitory inflation, if you will i'm not overwhelmingly concerned about dollar tree. >> karen, are we making to have of this headline as steve mentioned, is this just an opportunity for dollar stores not necessarily emblematic of a bigger, longer inflation picture? >> well, that wouldn't be like us to make too much of a headline like this, would it [ laughter ] >> i mean, the question is, to me, does dollar tree have pricing power? i think there's probably already things there that are more than a dollar if they are going to raise prices, the question is, is that them trying to keep up with costs? are costs less than that if they are less, that should be bigger margins for dollar tree what i have also wondered,
though, is will they be able to get enough product you would think that's the kind of stuff they talked about before this, having cargo issues i don't know if that persists or not. i sort of think this is good for them obviously the stock thinking it's good for them they have enough money to buy back stock and now -- or not keep prices firm, so i don't know, i think things are shaping up well for dollar tree. good for them. >> i think karen hit on a good point, the consumer. that's a key, too, all these inflationary pressures how much of this gets pushed through to the consumers are companies just eating the costs as evidenced by thinner marge aren't a lot of these stores, the margins were already razor thin, but do the companies have that pricing power? tim?
>> look, i think dollar tree management, first of all, karen identified maybe the issue with merchants and sourcing i think it gives so much more move flexibility really where you're going with it, in terms of earnings power, i don't think there's one that's priced this into their dollar tree model these dollar trees of yesteryear, or even today, before tomorrow, transportation as a percentage of cost if it's sold is very large to begin with i think they have some room. i think they're going to have a broader customer base, maybe the bottom end will struggle and push back, but i think they'll bring more people under the tent again, i don't love it as a consumer the kids will hate it, butti still where the company needs to
go. >> even less if they go to the buck 50. guy, i think this is probably the first time in "fast money" history we led with dollar tree. we picked the story because of broader implications, and part of that -- whenever they supply chain issues guess irch-- gets ironed out, will drawer tree say we're going back to a buck what struck me today i know you saw this, guy, peter boockvar tweeted this, that bank of england governor said today, transitory doesn't have a fixed time point which i thought was odd. >> it reminded me of an eddie murphy routine nothing is permanent
sores there's an end at some point, but it's preposterous when you start hearing these things rational people just have to be screaming like me. i find myself get into a pool and scream, so nobody hearing you. it would be a brilliant marketing ploy is if the reason they did this, they know six months from now -- remember it was mr. mom, skchoonor tuna, an he said, guess what? we're lowering our prices. that would be a home run, except it ain't going to happen >> i'm not sure 80% of the audience knows what you're referring to, but i get your point. >> that's false. the "mr. mom" fans are numerous
about the little schooner tuna f >> i now year kids, tim, they're no dummies, they're passing this on to you. you've got to give them the $6.25 to $7.50 [ laughter ] >> i hope they are listening right now. with just 87 days to go to christmas, darrell storch of storch advisers is with us do you think the consumer strength will trump all, price increases, inventory issues, all of that? >> absolutely. all these pressures are real s they're all real, but consumer is stronger than all of them put together we've been seeing huge increases
in consumer spending versus pre-pandemic 2019. i think it's just going to continue on and on, well into the fall, certainly think christmas. this is a wonderful time to be a retailer, whether you're dollar tree or almart, because the reason is you are going to pass these price increases on you will see the top line rise faster than the costs will rise. why? labor costs are going up, but fixed costs are fixed. a lot of the rent, they're in a five year, ten-year accelerators a lot of stores are owned. they have fixed costs, the arbitrage is tremendous. they're going to make a lot of money across the board that's what's going to happen. there would be shortages you want to buy the right toy, you better get it fast they'll be out of stock soon, but most things will be
available. and most will say scarcity is good. >> how do we look at it against the lents of a nike, per se, in terms of their issues with supply a lot of their fact torries are shut down because they operate in southeast asia, yes they're able to not possibly promote as much, or how do we think about that offset? >> great question. two parts to that. it doesn't mean that every brand that vendor is going to do well. depending on what they have available. nike said they will have problems and growth will slow, so some of these brand vendors will have issue. i'm talking about retailers. retailers are different from specific vendors you also mentioned margins
those will just keep expanding we have already seen significant margin expansion, especially among the troubled apparel/department store sector. they haven't had to discount as much i believe that's going to continue throughout the fall we see that in the holiday period one of the old songs and retail stories is your most profitable hours are on christmas eve when all the husbands come in, and they're absolutely desperate it may not be what she wanted, but he's got to come home with a present. your sales per hour are actually bigger then. each of the days between thanksgiving and christmas, it's like christmas eve day, you better shop and buy what you want. >> jerry, how do you see this playing out? do you see workarounds as far as the supply chains?
do you see sourcing moving into different countries? the other question is, for christmas, do you see the return of brick and mortar, and then being a bigger piece of the pie? >> again, two great questions. first of all, i've been saying for several years, this began with the trump tariffs, it would be management malpractice to not diversify sourcing, so everyone has been working hard to do that remember, nike's problems are in vietnam more than china right now. the other thing is trying to get multiple source for supply it's really been the pattern for decades where sourcing tends to chase low coast. we all expect india to be seen more in the past, latin america, north africa, that's capitalism. it works, it will diversify.
absolutely i have no doubt that's going to occur. what was the second part of your question i forgot. >> brick and mortar. >> oh, yes well, last year we got hit with the second wave of the virus there were a lot of lockdowns in key states that could map again with delta, but that's not what i'm seeing we're seeing delta come down we have to watch the northeast and california for what happens, but we don't have a big uptick the brick and mortars would definitely be huge again, it's not in anyone's control, so we have to see what happens. meanwhile, one of the most enthusiastic or exciting things we have seen is about half of the super-charged internet growth we saw during the pandemic has stuck we've seen big increases of all
kinds of products, including groceries, where you wonder will people go back to grocery stores big increases, too i think eh commerce got accelerated a year or two. i keep saying, go back to 2019 transport yourself back. who were winning back then those are the people who will win coming out of this people like tjmaxx, they're a fantastic retailer, almost all depending on bricks and mortar when people go backs to the stores, they'll take off the dollar tree, but look at dollar general, they're barely up this year walmart barely up this year, and amazon, those are stocks with still room to run, because all boats will rise for the christmas season jerry, great to have you with
us he just a littled off a bunch of stocks tim, are you buying what jerry is buying? >> well, i'm buying jerry's view on the holiday season. a name i think is worth looking at is mattel it's you go through a pain of the transsis process a lot of these folks have restructured the deals these guys have restructured their business they're going to grow probably mid single digits. i think the toy companies, despite shipping issues, are well positioned ed for a very strong s. kristina partsinevelos has
breaking news. >> specifically virgin galactic spaceshiptwo veered off path you're not supposed to veer off-path, so the faa suspended their flights. they have mended things, and virgin galactic said, they made the required changes and can return to flight operations, hence the reason you're seeing the stock up over 10% in after-hours trading. the fda closed the mishap investigation. kristina, thanks grasso, are you still in this one? >> i am. this one was flirting with 60 around the june time frame this is a headline-driven stock, as we just saw it has a lot stacked against it. i don't think management does
anywhere near the communication they should with shareholders, but this is definitely a tailwind for them. >> up 11%. the short interest is about 14%. coming up we have a trader triple play. we'll bring you the trades plus rolling over. how can you take cover dot n'go anywhere. you're watching "fast money" on cnbc , one day, you're gonna take a hit you didn't see coming. do you stay down? or do you get up? [announcer] and this fight is a long way from over, leonard is coming back. ♪♪ ♪♪ we see access to fresh food being the global norm, not the exception. at emerson, our cold chain software and technology keep perishable food at proper temperatures, to assure its safety and quality.
welcome back to "fast money. time for our trader triple play. we are tackling three big stocks today. we're starting off with boeing shares rallying more than 3% today. tim, what do you see >> i like it i also like that air force contract of $23 billion. the sense that people at some point have to come back in and this order book is out there i think boeing has struggled it's at the top of the trading range. you break above, and the chart looks interesting. >>-looking, 279 is the price target tim is right to point out it's
been in this range for a while there is some tailwinds now and some blue skies. i like the call. i don't know if we'll hit the 279 level, but through 235 i think has room on the up side. karen, this is one of your favorites, what do you make of morgan stanley here? >> yes, i lie morgan stanley if you read the report, the target is 112, i mean, to me, i look at one of the things they're talking about is that it's been so good for the investment banking capital markets bit. that part is true. that part of the business gets a lower p.e. multiple. the other parts of the business, remember, they did the
acquisition of e-trade last year, and asset management business, and those get a bigger multiple so i really like it. i wouldn't be shocked if we do see a down turn from where we are in m & a certainly in spacs that has happened, but this deserves a higher valuation than it has now. >> if we think the retail trade is not as enthusiastic about the market, maybe not trading it as much, do we need to ratchet down the p.e. that is assigned to that part of the business? >> i think that trade is a bit different than the robinhood trader it's a much bigger account, it's a different time of trader so i think it's more muted it's not going to get anywhere close to a robinhood multiple,
but i think -- that's conservative to have a more recurring revenue stream multiple and also to think that, all right, that revenue could go down if the market goes down, i expect that to happen, but bundling it all together, i think this multiple is good for this business, which deserving a premium. last but not least here, bank of america getting bullish on freeport mcmoran. so runway to 39, grasso? what do you think? >> yeah, this is at the epicenter for all inflation worries and woes, and everything china related. i would think this still has a quarter or so of the transitory word as a tailwind to this name. if you still believe that all those pieces are still in play and most of the market does, i do as well, this one could
probably ride higher as well >> guy >> i like it obviously there's an energy component here that was a drag, now probably providing a bit of a tailwind look at the moves in the u.s. steel over the last couple weeks. it's extraordinary how quickly they go down, but this is the ride type tom upgrading this i like the call. here is what's coming up next on "fast money." >> announcer: rob slimmer is here to chart out where the group could be headednext. plus netflix says game on. the streaming giant is leveling up, making a big bet on gaming wee t at a'vgothnd a lot more when "fast money" returns.
welcome back to "fast money. trouble in tech-land, the s&p and dow able to hold on to gains, but the nasdaq couldn't quite cut it our next guest says the rollover is just beginning. hey, rob, what are you looking at >> hey, melissa, thanks very much let's start with the ten-year, because that's what's driving everything here. the key point is when we look at the swings in equity and fixed-income markets, from my perspective, they're still moving in very normal, one to two quarter shifts like we saw with the ten-year bond yield beginning the first quarter, relatively oversold and bottoming. the move by the ten-year certainly caused gyrations in other risks assets, notably technology, but in the very
short term here, i think at this 153, 155 level, rates will probably pause that's roughly a 62% retracement of the move or decline we had through the second and third quarter s here i think some of the stress on the technology is alleviated in the short terms, but the key point when we look at the longer-term charts, tech outperformed in several quarters, an it's starting to pause here we're not alarmed by what's happening in technology. it just needs a rest if the contrast that, say, for example looking at the xlk or igv, all of these have had very big runs, and now they're going through a bit of a rest period it's not unusual to see that for a couple months. then when we contrast that, you think about the cyclicals, they peaked with the bond yield, went sideways to down for, you know,
call it two quarters many of them have caught up. the banks are a very good example of that. sure, there's probably some chop and volatility here, but it looks like a lot of cyclicals that job correcting the last few quarters are set to move higher. it doesn't necessarily mean that tech rolls over and dies, but i think it's just in a pause mode here >> so if the rollover in tech is not a long-term call, and presumably going to wake up, does it mean it's a short-term call on cyclicals and specifically banks >> i think it depends on the time frame, but think of it as an intermediate term time frame. whether that's, you know, airlines or bankses or the reopening trade, whereas i
think -- that's probably more of a pause. think past to last november, it looked like a tactical peak or pause. i think we're looking to something similar this year as well rob, thanks for the charts >> thank you. guy, were you surprised at the lack of bounce in tech today? >> no, not surprised listen, the ten-year hung in there today. again, we talked about did it make sense yay, it made sense if you do think rates are going to stall here amd had a 20% sell-off in less than a month nvidia 10%, some of these names are getting attractive but i think yields have room on
the up side. >> karen, did you buy facebook today? >> i did not buy facebook today, but you know, i think of tech as not just a monolith, sort of the high flyers, and what i think are the value names. i'm long term, but in short the igb. i think that will continue to work with rates here or higher. >> high-valuation stocks would be threatened, and warby parker's debut did quite nicely. >> there was a time when i thought wearing a pair of frames with clear lenses looked cool, even though i didn't need gla glasses. no, i really didn't do that. there's five eyeglass stores within a five-block radius in my
neighborhood this feels very frothy at some point i think you have a consumer that will run into problems well into next year i get that this is a hot place to be right now. this is not one i'm chasing. coming up, it's game on for netflix. we're diving into the details next. plus rolling the dice, options traders doubling down a turnaround on one big name we'll bring you the name when "fast money" returns
welcome back to "fast money. game on for netflix, as it makes a big push into gaming first, we're getting new numbers. let's get to julia boorstin with the details. >> netflix announcing that tadum event on saturday drew 25.7 million viewers, generating 300 million views on social media. this as it was said monday at the code conference, that the streaming giant want to invest
more in content and in games last night the company announced the first big game acquisition, buying developer night school, known for narrative titles such as oxenfree. netflix also rolled out five mobile gaming titles in? european markets stifel is saying this is a natural extension of the large original content, saying they, quote, view gaming an incremental medium i also spoke to warner media's ceo jason kyler at the code conference he told me gaming would also be a big part of their future, and he didn't rule out including games in hbomax. >> interesting, because i think it was a year ago that netflix said something to the effect of it's a competition for eyeballs.
we don't think it's competition for streamers, but anything that takes you away from gaming, now they're going more heavily into this remember, he also said the main competition was sleep. so i think not only are they not competing with gaming, but they also want to make sure the subscription volume has such value that maybe if that's what your passion is for, you can stick around and play the "stranger things" game >> i wonder what a "bridgerton" game might be. guy adami, you like this extension into gaming? >> i'm still trying to figure out the last comment and probably best that i don't comment on that. you know, a lot of people would sigh style drift, getting away from the core competency i say horse hockey to that
reed hastings is a genius. this thof above 600 is a breakout so this is an important as quarter. i think given on october 14th, i think they're on the right track and you stay with the name in the earnings. >> if i'm a netflix bear, i think not only will they spend so much on content, but even more through games doesn't this stress them even further when it comes to the capital means, grasso? >> no, they have to do this. as you said, that's where my mind went when we heard it originally from them julia said they're rolling out some test markets in europe. in a normalized world that's a $7.8 billion revenue area, so i think this could lead them to better roads, but they had to do this why doesn't gamestop have a streaming service?
this is also where gamestop is, blockbuster, they have a potential, an agreement with twitch, i know they have a jv there, but this is where they should be going. netflix had to do this this is just another way of them creating some momentum behind the name and the hours viewed. >> when you think about this landscape, julia was talking about warner media if all these streamering going into games, tim, what does it tell but the viability of streaming itself >> well, i think the depth of linear tv, the streaming competition, the engagement factor that gaming brings to anybody, i'm in agreement with all the bulls here i haven't been a netflix bull. i think you have a case here where adding this at no additional cost to a platform, and yes, there will be cost to creating their own content, but
they highlighted, they focused on nightschool's artistic excellence they are their first gamer it's one thing for reed hastings to talk about it a month ago, but this is enough with the recent breakout, i think netflix is going higher, and i think it should go higher. >> i know, karen, you didn't like the "n" in faang. could you like netflix with the broader vision >> ever since they switched from being the mail the disks to people and get them back, with content, which i was amazed it really worked, i could never count them out i think that surprising to me that who makes this content, the taketwos, electronic arts of the world, i'm surprised none of them have been acquired. with this hunt for content in
gaming, that's where i think people would go, but those are expensive. to one other point i think there is a bridgerton game, but i think it's a different channel and a pay-per-view >> not for our audience. [ laughter ] coming up -- good to know, though coming up, a major reversal. the venture capitalist injure wrapping up at delivering alpha. we'll tell you what stock he's completely sold out of we'll have the details when "fast money" returns i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals.
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find it on vrbo. i still have a sizable position in tesla? >> no. >> you sold it >> yeah. >> when? >> over the last few years it's like in the last year or so. >> i'm surprised to hear you say that. >> i don't have an infinite pool of capital i don't raise funds. so when i have these ideas, the money has to come from some
place. >> that was them speaking moment ago, you can watch the full interview in the delivering alpha content on demand. getting back to the sound bite and him selling out of tesla. just in january he was singing a very different tune. he told "halftime report" that big disruption is coming it's coming to the power utilities. sitting inside the energy generation infrastructure of the world. this is his quote -- that is going to go upsidedown when it goes pear-shaped tesla will double and triple again and he told scott today he sold out of the tesla we get he's got a lot of ideas, people have limited amounts of money, about you if you think it's going to be a double or tripping, i don't know that
that's the first to be sold. >> it's a time frame thing the world will go pear-shaped, but it ain't going to happen tomorrow my sense is, thinking of a better entry point, just parsing through that, that's my thought. i think his thesis remains the same i think he found better placed to be. >> grasso, what was your interpretation >> yeah, i totally agree i hear what guy is saying, but the idea, the same way we're on the show, the same way you chance your stance, you have to let that be known before you change your stance in the marketplace. i don't know what he's required to do or not do, but i know it doesn't feel great that can't pass his pillow test or mirror test if he says that something is going to double or triple, and then he's selling it that's number one. with tesla, i agree, with his first premise, that that stock,
it depends on how you look at it, but it checks a lot of boxes. when i think of energy storage, i think of stem, to make it a tradeable event. i think what he did is definitely in the gray area, and it shouldn't have been. >> karen, you're an investor in one of his spacs, correct? >> correct i bought it at less than ten, so if felt like the worst-case scenario, you get out of ten, and it was a paid to look at that, but just one thing about the tesla. if it's just him, and he doesn't have an infinite amount of money, it means he found
something much better than that. >> better than a double or triple >> yeah. >> i want to know what that is >> it's unbelievable if he found something better than a double or triple, and i mean that in every sense of that word. coming up, jackpot trade options traders rolling on a casino name. the details when "fast money" returns.
catch "mad money" at the top of the hour. from payments to poker, we're breaking down the big bet. tony >> yeah, melissa, we saw a sizable bet on the rebound for macau gaming stocks. today was about 6,000 contracts traded, but calls outstripped puts almost 4 to 1, in a single trade, it accounted for more than 40% of today's total volume
a single trader bought the $12 call options these call options are about 21% out of the money that seems pretty far away, but mlco is a pretty volatile stock, so the current options market is implies there's about a 38% chance there could be above that $12 price, so it's a fairly leveraged bet, while only risking about 8.5% of the stock value. >> tony, thanks. when you hear mlco, i think tim seymour. what do you think? >> love the options strategy around macaw and gaming in china at this point. i think it has absolutely massive up side. i don't think there's be license renewal issues there might be a tougher road
for new players, and certainly not local players. i think this is a kay where there's major, major up side i think you're seeing the j jpmorgan said we can't do 15 times in this environment, so let's cut it down to 7 or 8, but i think for investors that are willing to manage their risk, options is fantastic i have vegas sands, and same view, but i think it might not be enough time, and you're paying for the time value of that option. for more, be sure to tune into the whole show. up next, final trades.
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>> yes, consumers flush going into christmas i think target can handle it all. >> guy >> i'm going to mcdonald's and googling my mission is simple, to make you money hey, welcome to "mad money." just trying to make you some money. now if you're tearing your hair -- if you're tearing your hair out trying to figure out what's driving this market, you are not