tv Fast Money CNBC March 11, 2022 5:00pm-5:30pm EST
the market's kindof held in here i don't know if that's a good or bad thing. >> i know. i feel that way. >> we haven't seen a major low in over a week >> that's a good point it feels rough for a lot of people that will do it for us on "closing bell. this version of it have a great weekend "fast money" begins right now. >> live over the nasdaq site, this is "fast money", tonight's lineup, tonight on "fast" gas prices keep shocking a record high, russian sanctions seem leak they are here to say so what happens next to the consumer and consumer stocks plus charting, a major rising rate environment, will they nail the stocks to the floors now is a time to build a foundation mystery charge of the week hoarse a hint. this name harvested double-digit gains. we start off with a spring-like
day here in new york city by the middle of next week, we'll be in the 60s. nice and warm. for the market, it seems like we are in the heart of winter and tech is frozen over 40% of the nasdaq stacks are down 50% from their highs. check out the massive drops and the likes of docusign, zoom, meta, item himing, amazon down 22% from its peak. microsoft off 19%. apple falling over 15% with a spring thaw ahead, do investors need to let it go and give up somebody's beaten down fames? dan, i'll go to you first. i mean, it's one thing, it's a pocket in the market which were initially the high growth, high valuation innovation names were getting beaten up. when it's tech, that's a different story. >> i think, mem, it's really hard for a lot of investors who believe in these secular stories, the products, services, the trajectory that these
technologies are on, so when you see you know the disconnect between the price action and what you think the forward fundamentals are, it's really hard right. you just gave us the stats about what the nasdaq looks like under the hood and it's not pretty. we have been saying this for a while, for all intents and purposes, large parts of the stockmarket have crashed so now what investors have to do, when they're theying of letting go of these big losers is think about where we are? are we having the reversal we had in q1 into 22 of 2020? and i think not, largely because at the time the fed was throwing you know hundreds of billions of dollars of monetary stimulus that was going to be followed by hundreds of billions of dollars of fiscal stimulus what's going on now is the fed is tightening policy so these valuations don't look good and then we have as pike wilson said on the show last night, we have this kind of you know demand kind of snap back, if you will, from the pandemic so i just think it's a really
bat setup to pick bottoms. i will make one point, from the highs in the 2000 to the nasdaq and the lows in late 2002, we know what happened we saw you know 70/80% draw down in the index many stocks were down as much. as jim cramer likes to say, there is a bull market everywhere there were three 40%-plus rallies in that period there will be bull markets if you are nimble, you can catch them right now but we are on the precipice probably of a very sharp rally very soon. >> at least two of you today, maybe three of you were tweeting about the notion being once it breaks that, it could be trouble below, tim are we just holding our breath waiting to see if apple hangs in there at this point? >> apple may be olaf in the "frozen" story here. he's been the one happy player in all this. if you look at apple where it closed a buck over the 200 day,
apple hasn't spent a lot of time under 200 day in a couple years. if you think about, we have been saying this, the weakening of apple of four or five stocks actually would be consistent then from a follow-through of higher quality stuff on some level, let's get on with it we have had it crash there is no question about it. we will talk about the kweb. some much more important stocks, we talked about this with netflix. if you look at the tripping qs, they've under performed s&p 8.5% since january 3rd. the triple qs have been below the longest period they have outside the covid dislocation and the lows of march since 2016 again, so we have been in a tech bull market for a long time with a hiccup around covid. this should be concerning for people because i think this is at least
a gut check. >> whenever you have a sell-off in the market, they always take the largest cap, safest stocks lasts, apple, google, amazon, microsoft. tape took them last. they didn't knock them off right. what they did knock off is all the ones we introduced here, the zooms, docusigns, pellpelotons those are probably never coming back, other than a gamble coming back when i look at it, facebook, do they even know who they are anymore? i don't think so it's rhetorical. >> it's a deep question. >> i don't think facebook know who's they are, metaverse doesn't know who they are. how do investors think about whether to put new mo into work. i think that is on the precipice of falling out of bed. if i had to put new money to work, it would be apple, microsoft, it wouldn't be meta >> you were talking about the notion we have to see that flush in the megacap tech stocks as well and how hard of a flush would you say we have to see
i would imagine it's not as big as let's say arc innovation, which was what i don't know it was 70% lower from its highs in february of last year >> yeah, there is going to be a difference ultimately between the quality growth stocks and the junk i'll call it. i think you are grand jury to see a snapback in growth in the second half of the year. i have been talking about that over and over again. i think we see this opportunity unfold i think you want to set your sights i don't think you want to pull the trigger. i think the big part is you will see apple crack. you will see tesla crack both flirting with the 200-day moving average two what extent do they move to the downside it's so hard to know i find it interesting, our friend puts out a market low checklist. put apple on that market low checklist. it hasn't broken yet that hasn't checked off the list we haven't had a put-call ratio in the 99 percentile
we haven't seen spot vix you go down the list, there are all these things you expect to happen in a true correction, true bottom. we haven't seen that yet the last thing we talk about these covid stocks, docusign, this is a stock trading at 200 times last year. it's gotten negative return on invested capital, an early way of saying it's not profitable. those are the stocks that ern won't snap back in my opinion. growth stocks outside of tech, too, sort of random names, public storage, o'reilly automotive they have held up well so far. i think investors will move towards them as earnings revisions slow down. >> i guess what i am thinking of have we already factored in the public terms of earnings revisions downward of the impact of this conflict on let's say european markets
noen i don't know if investments in the s&p 500 have reflected that because of high interest costs? >> not at all, i know they have a blog that comes out every week we have been tracking a bit about those negative revisions i don't think we're there yet. analysts are late to do that they don't have incentive to get too far ahead of it. when you think of issues for multi-nationals, likely to go into a recession smr i the longer this ukraine situation lasts. you have a surge in dollar because you have a weakening euro you have input costs all over the place that are just rising here investors or excuse me companies have to make a decision whether they will pass through some of these costs here we know oil higher will be a big tax on the consumer here so earnings revisions are going to happen. i think the visibility when we get q1 earnings and q2 guidance towards the end of april, it's going to be as clear as mud here that's the thing that you probably see stocks sell off into and maybe come out of once
we start seeing the acknowledgement that the growth as expected in 2022, the reinflation trade because of the pandemic is not likely to materialize. it is likely to be pushed out to 202003. >> speaking about attacks on consumer prices, a gasoline of unleaded costs $4.33 a gallon. let's bring in steve leishman, steve, what i wanted to chat about is this conversation we started this morning and that is if the war ends and we all hope that it does, will sanctions come off because that has really been the pressure here in terms of pushing all of these commodity costs higher across the board. do we know there will be relief for the consumer in various commission around the world? >> can i ask you a question in response >> sure. >> is your hypothetical there if the war ends, is putin still an officer not? >> okay. i see where you are going.
let's say putin is still in office. >> the sanctions are not coming off. everybody i speak to tells me these sanctions are in place as long as the putin or putin regime are in place. and that it will not be, you look at number of countries that have had sanctions taken off of them that have nod had regime change i think it's something like zero you know what, we can do sanctions for a very long time for 40 years, 50 years or whatever long that the political process allows a sentence to remain in place. so i am thinking about a reorder of things, reordering of the ability for us to get things from russia and hopefully not the ukraine. i hope the hypothetical question is when the war ends and the ukraine remains a sovereign nation that will relieve the food part of this thing. the crops part is another technology obviously we get from ukraine and obviously for the ukrainian people you can't leave that out the idea of russia being the resource basket, as a commodity
basket for the world, i think that may be a long time coming >> we raise this question and i'm going to bring the conversation to him. because, this morning, obviously, there is a headline that moved futures higher. it was reported russian president vladimir putin said there are positive developments, i'm paraphrasing with talks with ukraine. we saw futures have a snap higher that's the reaction you would imagine. my question snap higher, it's great. we know it will not get worse necessarily if the war ends? will it get better i don't know what we are rallying for >> in my dream scenario, i think if putin somehow was removed from the picture, i think markets would rally. i think there would be actually a fair amount of globalization follow-through from that not permanent. i do think we have rethought the globalization. we've rethought about the ability to have certain products travel around the world. i think the consumer confidence number we saw today and i don't
know if we have divided the guests yet >> steve is there. that university of michigan consumer confidence number was the lowest since 2011 and you know the fed has never hiked into this type of a low consumer confidence without it leading to recession. that's the bigger concern of where we are coming out of this. >> i don't think that's a misplace here. i think recession is a possibility of a major supply shock hitting the economy. the good news is we have low unemployment, relatively strong growth the rebound we will get from omicron and covid. all of that should help. but there is a supply shock. why is there a supply shock hurt the economy? well, imagine the old economic example of an island with two factories? right. one does fine two oil at 130 one can't make a go of it. the factory shuts down, production is no longer viable at a certain oil price you will have some of that, unemployment related to it
a decline in discretionary spending, wages having trouble keeping up with inflation. i don't think tim you and i maybe want to have a debate about this off line. i think this is a deglobalizing event here i think what we will have here is the idea that our supply chains are not secure that too much of it >> i agree >> are behind enemy lines so to speak right now. i am spewing this from ron osana who was elegant on air today he said you have supply lines for efficiency, not for security i think we will start to organize for security. that means higher prices. >> we have already moved in that direction to try to an-shore things of course, all of that means higher costs maybe in the long run you reap efficient sis, jeff mills. in the short term all of the drugs and the hiccups steve had mentioned. on top of it, in the longer run, onsoaring things that's all higher costs to the
consumer >> yeah. it certainly s. i think steve touched on some of the really important points, real incomes are being pressured. spending is going to be pressured. maybe if you want to look at a silver lining, you think that okay core goods inflation may actually still come down because you had rising inventories maybe you had demand from the economy slowing down do. this isn't the '70s, we are more efficient, things of that nature so maybe there is some sort of buffer in there. long-term, you are absolutely right this decentralization is going to lead to problems then also opportunities for certain companies. we have been buying applied materials on the way down because we think as the semi conductor supply chain gets decentralized, companies that supply equipment, maintenance equipment, they're likely to do better you think of an intel repair trade. maybe this is good for intel this will materialize over time. >> melissa
>> yes, steve. >> can i end this lousy week on perhaps one naive idea >> yes. >> if this works, if hitting the red economic button and cutting russia off work and brings russia back into normal civil society, we might have sent a message to the next tyrant not to do this it's going to require the u.s. people, the european, western people, to stomach a bunch of pain herep but the idea of global financial and technological integration, i'd say it hangs by a thread now but it's still connected it's still out there if we can bring russia to its senses through this economic sanctions, we might still have a future here when it comes to the globalized world >> bringing it to its sense, though, in your view, and are you the expect here in russia, is bringing putin to his knees >> yeah. >> that's a difficult thing to think about right now. >> c'mon, i was trying to end on a decent note flu is know me
anyway steve, good to see you we'll see you soon, speaking of the fed, economy, inflation, you can catch 6:00 p.m. the fed decision, that is tonight at 6:00 p.m coming up, hole builders getting hammered this week is this the perfect time to build a position we'll break down the stocks. our chart of the week. that trade and more enwh "fast money" returns money" returns >> i invest in invesco qqq, money" returns >> a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq if you wake up thinking about the market and want to make the right moves fast...
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get the new samsung galaxy s22 series on comcast business mobile and for a limited time save up to $750 on a new samsung device with eligible trade-in. welcome back to "fast money. bloomberg reporting that jpm is the biggest counterparty of the chinese tycoon caught in that short squeeze. we have been talking about this in terms of contagion, risk, how many portfolios we don't know about. what do you think? >> yeah i think this is the first of many and tim mentioned this, it's kind of like the crisis playing plague. they're not going to get too far in front of it i expect more news like this in the credit space, the commodity space, fx space.
obviously, inequities, we will see major funds blow up also >> i think in the precious metals place, this is a place where you have a rabid following, uranium, they will continue to squeeze where they can. >> all right let's get to home builders here. the shp wrapping up another week of losses. that's ten straight for the builders shp nearly down 22% this year. next week is a big one for the sector, march sentiment, housing starts, earnings from lennar steve, have you been in this space? >> i'm not in this space usually you rise to an environment, rates are rising for a good reason. i don't think they're rising for a good reason now. growth is slowing. i think it will be a value trap. they look cheap on a foreign pe. i think they will lock a lot of people up when recession comes. >> how about the inventory was so tight before all of this, that condition still exists. shouldn't that help the
builders >> i think that's the good the demand story is still in place. i think we're something like 5 million homes short in the u.s i think there is a dynamic everything going on makes rates stay where they are. we seen this big run at the mortgage rates, maybe that stops, so affordability at least is helped a little bit i am actually build's home myself, my wife and i currently. i am experiencing this first hand i had a talk with my builder, shoutout, chris pinto, a big "fast money" fun that's what i'm trying for, i'm no dummy but he talked about all shorts of different things and you know just one example, it's anecdotal. this chip found in a lighting fixture, it used to cost 23 cents. it's over $3 now are you seeing pricing escalations. people locked in at certain prices, there are escalation charges. now builders are chargeing more, so deals can actually blow up.
so that can be problematic steve mixed valuations for me. maybe that's the tie breaker you have dni trading five times forward. you need to be a little patient here they are dealing with issues at the moment. >> yeah, look, i am disappointed jeff is not slinging a hammer around doing this. you look, real quick, under the hood, inside baseball here it's not home builders, folks, whirlpool, earnings corning. williams and sonoma. you basically have two top home builders in the top seven or eight positions. i think a lot of the weakness is in consumer-based names related around the home trade and lowes and home depot, they've fall son much, they're not as big as waitings used to be. >> up next, we will dig into our chart of the week. first, before we head to the break. there is a cnbc afternoon lineup you can check out scott walker's
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and for a cheesy crunch, try pure protein snacks. welcome back to "fast. check out shares of caterpillar, up nearly 10% for the week jeff mills do you like cat >> yeah, it's interesting. i september a chuple ch couple s in two things if you look at cat versus inflation. relative to the market it tend to outperform when inflation goes up. you think that's a good situation for what we are in now. economic growth tends to move relative to the broad market the problem is, i think we are
heading into an environment where economic growth slows as inflation stays high what itself the signal what itself the noise? i think inflation is the noise, economic growth is the signal and relative to the market it probably trades with slowing economic growth. >> the other thing also is we have that infrastructure deal no one has been talking about that got lost in the weeds $1 trillion infrastructure deal. there is possibly 40 billion in cap, we'll probably be the recipient of a lot of those fund seeing things come in probably swing spring to upper. >> jeff mills. >> talked about earlier applied mills, we continue to buy on the way down >> mel, in that cap, you said 10% this week. i'd be fading that >> i need that song let it go. carmaxon my brain. i think this is one you say with >> if we see a rally or a bounce
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popping in friday action, i'm melissa lee. here's what's coming up. >> conner continues his precision positioning within broader mark swings. tonight, deer has a catch-up play in the eggs sector. then tony puts renewables in a different light. with a strategy around the tan etf. finally, professorco on how the amazon split jumpsed a more than a stop what you need to know before diving into its options. it's time to risk ss
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