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tv   Fast Money  CNBC  October 8, 2021 5:00pm-5:30pm EDT

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reacceleration story going on. that's been evident in the markets and yields it doesn't seem as if we got that give-up trade in terms of the pullback and the tech stocks, we don't know how they will play. apple and microsoft did not much of anything this week. >> thank you for letting me join you today. i think i will be back monday. that does it for today "fast money" starts now. >> we are in new york city's times square this is "fast money. i'm melissa lee. on fast we are gearing up for earnings season. the action kicks off next week four big names that need to be on your radar. home depot and -- under pressure
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we start off with a fueled-up rally. crude oil crossing the $80 mark for the first time since 2018. that helps the energy sector lead the way in today's market nine of the ten top performing s&p stocks were up will the energy rally continue or is this red-hot trade running on empty brian kelly, what do you make of this huge run? >> i have been long on oil so you are asking a barber if you need a haircut yes. i think oil has more to run. we know there has been underinvestment in the carbon based sources. natural gas, oil drilling, those type of things those are slow to react. it's unclear whether we will have the typical supply response
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that we might get in this particular situation i do think that higher energy prices are here to stay. that being said, we have had a good run i did take profit today. that doesn't mean i think it's going down but i think higher energy prices will be part of this winter at the very least and maybe into the summer >> in the past one might think about the price of oil and energy is so high that it starts to curb usage of oil a different backdrop today economically where that term doesn't come into effect for a long time? >> you are making a good point b.k. talked about supply you are talking about demand as we see the covid numbers come down, that puts fuel on the fire for a bad analogy. we look at that and the
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macrosetup, you are seeing re-flation, the growth of inflation accelerating we think you can hold on to these energy names obviously we have had a lot of final trades we agree with big k. you can hold on to them, but you may want to take a little bit off, but a long-term hold. >> steve grasso? >> back five years, the sle is basically flat if you go back to 2016, that stock is probably at the same level as today there has been a lot of chopping of wood. but when bk said an
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underinvesting the fossil fuels, i took out my decoder ring this administration has made a bet we will be out of alternatives or renewables quicker. the best performer has been coal can you imagine bide biden saying the best performer will be coal? i think this can't continue just because of the politics of it. >> tim brought up the term the other day when he said green-flation. that as we push to renewables, the prices of fossil fuels go up
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a name like peabody, when is the last time we talked about that years ago. >> mel, as i said, either this week or the week before you asked me about oil and i said i think it can go to 100 before the end of the year. i still believe that the run we have had, going on nearly a year, started right at the beginning of november of 2020 and has been running ever since. these beta names are exploding to the upside. if you take a look at any names that have a 2, 2.5 or 3. like all of these various names, you look at the xop which has a lot of those names in it, you will find yourself looking at something that looks extraordinary and they just keep coming for it. we have two separate occasions today where it has option paper. they closed out at the end of
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the day about 49,000 upside calls. so day after day after day, all of the option activity continues to signal to me that it continues to go higher i believe it it is by far my biggest sector holding. >> fang, the big tech stock or fang, the stock, to the end of the year >> great question. fang the stock if you think oil prices are going up,that means inflation prices are likely to go higher which means rates will go higher which is not good for tech stocks i would rather be in the oil sector think about what is going on with exg they are returning capital to shareholders rather than
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investing. i think that hurts rates which will hurt your fang stocks >> steve grasso? >> i go with fang stocks, too. let me hedge that. i think fang and fang -- the company up 127% year-to-date, in nosebleed territory. when you look at the other, i think they both can go up. the 109, the nosebleed company president biden will do whatever they can to stop drilling. these companies are not making investments. they want to hold back on money, return money to shareholders
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until the smoke clears >> here is a question in terms of the impact on consumers where do we have to factor in eps into margins, $100 oil >> oil prices and energy prices are going higher if you are in that trade not so great if you are a company that depends on those inputs if you depend on consumer spending and not having to pear back on spending for heating oil or whatever it is. >> that's a great point. before i was talking about the short-term in the intermediate term we see macrofactors changing. you will see a rollover of the growth of it growth is going like this and inflation is still going like this or staying at a high level or deflationary where both are
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decelerating because of high comps. whether it's energy or price of cotton or food at the store. all of those things factor into people's pocketbooks in addition to employment. people are not coming back into the labor force which means they will be drawing on their savings. even though we had huge numbers for less than 1%, people be spending that down i think you are making a great point, but it's just not today next week earnings season kicks off. other important names are reporting. wells fargo reports on thursday. nadine, what do you say? >> we are going to trade it here the fundamentals, for the same reason i said before, energy financial do well, but look at
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fundamentals charlie continued to take out costs when rates were lower. margins will go up solid loan growth from the business and in line with our macroview. i think all of the knowns about strategy and customer issues are out there. if you want to trade it, our trade range is 46.7 to 49. right now i would trade it closer to that 46.70 range >> i would say fade it i like the way nadine sounds like she had lunch with him. the stock is up 59% year-to-date it is not overbought, has an rsi of 56. i am still thinking with fade it i like the financials, but not
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this one in particular brian kelly? >> walgreens a fade it it is turning sideways for the last six months or so. it has a high dividend yield so what else would you want why hasn't it performed? if you look at it oil prices and energy prices cutting into the consumers pocket books, that is not cut by some of the ancillary goods. i know pete usually buys a cabela's gift card or something. >> this is a stock i pitched to you back in march or something like that. i like the free cash flow.
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i am trading it. i think you can hold onto it you can sell options this company has given us just about everything you are looking for including buybacks if you go back a year ago, it's a $39 stock, now in the upper 40s. pull back from 50. i think it has given back too much i think it is another opportunity. >> i remember you pitching this because i remembered it was not headquartered in minnesota which is unusual for you to pitch. >> this is a no-brainer. you have capacity constraints, high demand which equals to me pricing power. analysts are tripping over themselves it's a trade it for me to raise deficits i think this is a quasi no-brainer going into christmas
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and possibly q 1 in 2022 >> pete? >> maybe i have a brain or don't, i don't understand the analogy. but i have global cmis we are supply chain constrained. and i have a christmas season probably canceled. i am a fader of it >> last up, delta air lines earnings on wednesday. pete >> i think ufc to trade this one. i do not own the stock i do own calls i think there is upside for this company. people are coming back, traveling. business travelers will start to come back as we get past the latest of the delta variant. i think you will see the numbers go to the upside i think this is a company way
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undervalued and they have been making acquisitions for 2022 at unbelievable discount prices for that i think it's a trade it >> nadine? >> pete might be right on the intermediate term but on the short-term i would say life is too short. too short. i don't need to short it, but
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>> i would save them are we still playing that game >> that's right. you can do that.
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>> i have a lot of head winds that could hurt earnings if i buy it, i buy it on a break down above 350 >> you are wrong >> you hear the peanut gallery saying you are wrong >> he told me to say i am wrong. i thought he was actually wrong. i do think he's wrong. when you look at these two stocks technically the 50 has crossed over on both of them it is a bullish formation to me. and the home builders used to move in the same direction they are not now they are inversely correlated. the ten year is spooking the home builders, but it is not spooking the home depot and the lowes for some reason. the reason i believe is both of these are seen as value plays. i believe when the fluff comes out of the pandemic, everybody
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buying second, third and fourth homes like b.k., i think everybody will get back to renovating what this means to me is nothing will be on sale. everything will have pricing power. home depot, lowes, trade them. >> read the jim cramer cnbc investing club sign up now or point your phone to the qr code on the screen it will take you he there. later on options action, we are playing the china bounceback, where the tech sector is going from here. more "fast money" after this my credit card debt. i needed just one simple way to pay it all off. it was an easy decision to apply with sofi loans, just based on the interest rate and how much i would be saving. there was only one that stood out and one that actually made sense and that was sofi personal loans. it felt so freeing.
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bitcoin trading at its highest level since may. have to go to the baller about this breakout. brian, what do you make of it? concurrently with the debt extension drama. >> there are quite a few tail winds. i think that's what is going on. we have talked how bitcoin has become an asset. it is starting to respond to the debt ceiling drama if you look at the correlation, it is now positive on a 30-day rolling basis. it is starting to get more positive what institutions are starting to use it for is as an inflation
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hedge. the other thing is there is a futures coming up in the middle of october i think you are seeing speculation that that may be approved at that point in time both of those are tail winds >> what is the point of gold, nadine it's down for the year it is supposedly an inflation hedge. besides a pretty metal that makes bracelets and stuff, what's the point >> it is not very confusing. when you are in a re-flationary, energy does well, financial does well, crypto does well, but gold doesn't do well. dollar up, gold down it doesn't always work that way, but that's what is going on
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here until you see the rollover, you will not be able to use gold as the perfect inflation hedge. instead you should be using crypto >> grasso, your thoughts on bitcoin versus gold? >> obviously, if you are going to buy gold, buy the miners if you think gold will go up three times the amount bitcoin, b.k. and i were talking about the seasonality of bitcoin. september is negative, but october and november and december are good, and then you sell it. >> time for the final trade. around the horn. pete >> a sneaky area are the casinos. >> mgm i was seeing a lot of call buying today >> nadine? >> regn.
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we like the fact it got hit along with other health care names when the antiviral came out. it is a great pipeline, has nothing to do in terms of separating out what happens next year we like that name. >> steve >> i am going bond, imax >> brian kelly >> i think copper will break out. >> that does it for us here on "fast money" for the week. do not go anywhere options action is up after this quick break.
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it's friday and time for options action china's internet and 'tis the season, earnings season last one before the holidays how to not scrooge yourself. joining us as always is tony and mike it has been a big week for the chinese internet


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