tv Fast Money CNBC May 13, 2022 5:00pm-5:31pm EDT
bulls and bears agree. you have maybe 5% upside and it doesn't change the story there's a good wall of worry out there. we'll see if the market can climb it >> a lot of fed speak, too buckle your seat belts we'll see what next week brings. mark lazry will be with us on monday hope you have a great weekend. "fast money" begins now. right now on fast friday, rebound. the nasdaq closing out a rough week with almost a 4% surge. apple bouncing off its bottom. so goes apple, so goes the market we'll debate that. plus, big retail on the clock. walmart kicks off the earnings parade it's been moving in the opposite direction of the s&p this year can it keep bucking the trend? and later, we'll go shopping with our chart of the week a former pandemic high flier that's bounced over 30% in the last two days. is it worth a look i'm melissa lee. this is "fast money. on the desk tonight, tim,
courtney, brian, and guy we start off with what might be a turning point for the market apple today, to end the day with a gain of over 3%. rebound is 6%. nasdaq, it's apple's low just the other day, we'll talk to you about apple hitting that low so, asked the same question, does the inverse apply here? >> it's probably for the short-term an apple was that leading indicator. that was probably the big thing that the whole entire market was looking for. so to see it bounce back is encouraging, but what's interesting is if you looked a.
>> rocky: cross the board, we're up it didn't really feel like this massive rally type of day and that everything was back together so i think for the time being, do we have a return to bottom? probably things i worry about as you saw rates tick up. so what about completely out of the woods. but for the time being, maybe it's a tradeable bottom. >> we did see people start selling what they loved, right so apple microsoft. i mean, all these sort of big cap tech names that were touted as being relative defensive plays. in this kind of market were also being sold and maybe that was a good sign >> yeah, i mean, i wouldn't be surprised if we're getting close to a bottom here i don't know if this is the bottom itself. i haven't seen that yet. people are getting impatient i don't think they're quite panicking yet. but i do want to look at over the long run, i'm not of the mindset that we have a recession right in the near future here. i think the economy is still in a good standpoint.
profits look really well corporate and personal balance sheets are still looking really strong so is today the up from here i hope so. i think we might have a little bit of ups anned downs from here >> what did you make of this rally, guy some degree of skepticism. >> i don't know what copious means. taking the notes saying we thought collectively that apple should trade down to 138 got down to 138 yesterday. i think the bounce was justified. probably has room up to 160, which would be a 50% retracement of yesterday's low and the all-time high. i think it all makes sense apple's not impervious to valuation. it's still an expensive stock. so until that gets down to a more reasonable valuation, i don't think it's over by any
stretch. >> tim >> babe ruth was the sulten of swat i would call apple the sultan of swing in a market where clearly we need to see this largest market cap move lower. by the say, saudi aramco became the biggest company in the world. apple has only just started to u unz perform the market despite a rally off those lows, i kind of feel we need to challenge this i'll reiterate apple much like many of the companies that have reported earnings so far. earnings season was fine we heard about supply constraints, inflation those are reasons we're paying less for stocks and that rates are significantly higher or going higher we haven't had a pullback in demand that's phase two of this the consumer that's dynamics that we just
need one or two earnings cycle to get to. this was an important week important close to the week, but i'm not sure that this is what e everybody needed to see. >> if you're playing the dire straights drinking game at home, you might have missed tim's reference to sultan of swing >> don't get to play that game >> he's got something next month. in terms of brian, like, dan came on the show yesterday and said he was starting to leg into a key position that it was an interesting time to consider that he's not completely pounding the table bullish, but it's time >> i think we've priced in a lot of stuff we've priced in a hard landing you've got yields lower than they were at the beginning of the week so that's a positive. there are some positives out there at least for like i said, a tradeable bottom i think the real question then becomes what does this look like is it off to the races and we're
back in a bull market? i don't think that's the case. you could get apple going up to 160. trade apple 140 to 160, that's a good range to trade and we might be in that for a while you might have to adjust your investment style or trading style to more of a range trading style rather than we're in a bull market and you just buy every dip. >> we entered this year and you were saying that geopolitics were you biggest concern are they where do they fall now because we've got so much going on, whether it be russia ukraine and the impacts on supply chain. or china with the zero covid policy being so prolonged at this point we don't really know, particularly when you're real estate developers on the verge potentially of defaulting. >> well, people prior to november would say why worry about ge o poopolitical risk. i said you've got to worry about
these things because they're front and center and i don't think it's been taken off the table by any stretch of the imagination and geopolitical, we talked about it last night if president xi were to step down or if something were to happen there, we're going to talk about energy in a second. i think that would be bullish for energy and energy stocks so still front and center. we haven't talked about it for a while, but we should >> tim, you're shaking your head >> well, i don't think guy's suggesting xi's going to step down if he did, would be energy positive i think there's zero chance xi's stepping down and i think there's a lot of speculation there's only one person in charge of global interest rate policy money for nothing out there. we went up and challenged that 325 on the ten-year. and it's a case where i think you had to give some ground back i think rates were moving too
quickly. but that's the big issue here. what are we paying for stocks in an environment where rates continue to go higher? the good news for the other chart you might have is the chart on the smh which outperformed the s&p this week by about 5%, but has outperformed over the last month. i talk about semis as being a place where you get a sense of where the cyclicality of the growth is. i think they have great balance sheets i think valuations are very different. still may not be terribly cheap. but this may be the pause. i think we could see a rally in oversold stuff, but i still get concerned out two, three months. >> courtney, it sounds like you are more comfortable where the markets are valued here. >> i think you've got to choose wisely here. we are seeing a lot of tech companies really rebounding here for such a large sell off they've had, but the macro environment hasn't changed we are going to be in a rising rate environment and hopefully we'll see the peak soon. but it's still going to likely be a lot higher than it has
recently so i think you want to make sure your higher risk, higher duration assets may still continue to underperform i think you want to look at those companies that have solid cash on their balance sheets that are going to do well in a rising rate environment and have their ability to increase prices going forward. just making sure you're not picking the things that have been hit hardest make sure you're choosing wisely >> it is a big week ahead for retail earnings. walmart, target, home depot, kohl's and others set to report next week and chart master says one of those names has the potential for rebound. carter, what are you looking at? >> i think we'd go with the big one. walmart. let's get right to it. four elements. the first chart is just put this in perspective we know that basically you cannot have a more steady up trend than what you're looking at on your screen. that line is drawn very clearly. those arrows are what they are this is from 2015 to present
55 bucks to 160. up and to the right. north by northeast more immediately, second chart the current sell off let's just stead y this we had a low in february of 131. a high of 161. four or five weeks ago and now here at 146, 148 so what is that? that's a $29 move up a $14.5 move down. we've retraced 50% of the move from that low. so the next chart depicts that clearly. a retracement of 50% no magic can you retrace 51 to 49, but the point is, come down 10%. it's a big name that i think has dipped quietly, gently, and it's a good set up into earnings. final chart. they look like railroad tracks because what you're looking at here is the relationship between walmart and xlp. walmart's beta is .71.
it basically trades like a staple it's a good name here. we like it >> carter, thank you see you in just a few. courtney, do you like walmart? >> i do. i think what i really like about walmart is they are one of these companies that can take advantage of inflation increasing they're really one of these companies who their goal is to keep prices cheaper than competitors and even as prices rise, their scale can still keep prices lower than their competitors as they rise which puts them in a unique position here as we hopefully continue to see their numbers come out, i think it will be interesting to see how their consumers are continuing to spend which will be an insight into how the economy is doing but i like walmart as a play >> guy, walmart, target, or dollar gen your fave. >> you just did a would you r rather rather. not to cast dispersion on walmart. when carter is on, you know that man is way too strong.
he does incredible work, melissa lee. that was number four by the way. >> figured >> walmart is interesting here target is more interesting and i have valuation >> when the traders are off camera, i can still see them in a monitor in front of me and i could see guy was smirking he was calculating how he was going to weave in his next dire straights comment in tim, on walmart, you like it here into earnings >> and of course, mel, you would know them all. i know you're a huge fan you told me that making movies was your favorite album. walmart is a solid rock. it's a case where this is a company that's very bulletproof valuation wise the e-commerce trends that are maybe softening, i don't think they necessarily hit walmart the same way they've hit amazon. i like what they're doing there. i like the fact they have a logistics erp set up that they've durcmped a lot of money
in they can push people around. they have pricing power. it helps the top line. i stay there >> so i think it's great risk reward here as a trader to look at that. however, what i worry about is the thesis is built on they can raise prices or they're able to use scale. what if inflation has peaked, you might want to be careful what you wish for because that means demand is declining. so if inflation has peaked and it stays sticky but the consumer can't afford to buy anything more, that is going to hurt walmart. so i looked today when we saw energy prices higher, dollar general couldn't get out of its own way. walmart did okay but that's the one thing we have to be aware of here or that's the risk to this trade is that they actually can't raise prices and their consumer can't afford what they used to be able to afford >> up next, oil gushing higher the commodity avoiding its first weekly loss in three weeks how to trade this comeback plus, our chart of the week is a retail stock bouncing off
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marathon petroleum, valero among the names jumping. so what is the best trade here bk, how do you think about this? >> well, you know what, the best trade used to be exxon mobil but i got out of it because i'm concerned about the political ramifications. >> it was your final trade yesterday. >> on wednesday i think it was yes. so what we saw today was news that they're going to pass a bill that is going to cap gas prices so to me, if you're a refiner, whether it's exxon or marathon or anything like that, there's no economic incentive to produce more gasoline. so putting aside the fact that it's a ridiculous policy, if i'm an investor in one of these companies, i have to worry about whether or not i'm going to have the margins that i thought i was going to have. so it reminds me of healthcare going into the last election we have midterms coming up this fall i think the refinery in oil and energy sector could be this political football so for me, i got out of that
i bought into gasoline futures because that's a much more pure play for me. i'm not saying these stocks can't go up. i'm just saying this is a new risk that they didn't have two days ago >> guy >> heavy fuel. got to be long fuel here and i said devan last night. the oil trade is not over by any stretch of the imagination that by the way in the wake of a dollar that's only going higher. can you imagine if the dollar starts to moderate here? what's going to happen to crude? i think there's another leg higher stay in a levered name apa, devan and oah >> courtney, what do you think about oil? >> i have to agree here. i'm optimistic on energy i think we're going to see this move forward and we're already seeing oil prices at $110 a barrel right now that's as china is still shutdown so there's a huge demand that hasn't even gone into energy yet
that can bring it higher to your point about regulations, a, to see if it goes through, but b, if they're capping that the thing you have to remember is these energy companies got so much more lean and mean on their balance sheets in 2020, so even with energy prices where they're at, they can't come down they're still so much above their break even points that it's a good play to hedge against inflation and look at further growth >> tim, do you buy that? >> that's number one i love it. you know, if you think about the story here and again, 15 years ago, the story for the energy sector and investors was one of romeo and juliet number five by the way now you went to this place, they didn't grow in favor balance sheets got blown up. notably, conocophillips, chevron, and slow to follow. exxon breaks even on their dividend at $35 oil. i think this is a very different approach to cap ex
conoco raised theirs about 8%. i think they can do it they have more exposure to the upstream commodity i like to stay in the vertically integrated names schlumberger is a company even through their worst times and i think drilling will continue the weighting of energy to the s&p at 4% is so grossly underrated, it's going higher and that's a tail wind coming up, the safer way to go bottom fishing than just with a rod and a dream, but first, our chart of the week. this ecommerce stock getting a price jump after hitting two-year lows. the big reveal when "fast money" returns. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do.
the stock hitting a low on thursday not seen since march of 2020 shares bouncing back after the ceo announced plans to buy stock. up 30% since wednesday guy, this is your pick for chart of the week. why? >> it's interesting. at one point yesterday, stock was down 78% from its all-time high now granted, it should have never been there in the first place. current levels it's trading about 7.5, eight times revenue it's a lot more reasonable than some of these nameswe've seen and it traded down to that march 2020 low and bounced so for me, that's a tradeable bottom off an oversold condition. we were clearly overbought, oversold i like shopify >> wasn't just shopify pulling a comeback check out the rebound in a couple of tech darlings since
hitting lows yesterday amazon for one, up more than 10%. nvidia, netflix, rising double digits docusign, up a whopping 22% since thursday's bottom. would you buy any of these courtney >> i think a lot of these are getting sold more than justified. i think also, the consumer isn't going to be able to spend as much as inflation is kicking in. but now we're seeing bank of america card data came out and it's showing people are continuing to spend on discretionary items. that's things that shopify can benefit from that's happening as inflation is kicking in both your lower income and higher income are continuing to spend as wages go up we think people are overly worried that's going to stop and i'm just not seeing that in the data right now but i think you can take advantage of the that could that people are overly worried. >> did we see the bottom in netflix, tim >> i'm not going to call a bottom on anything here.
i would choose to actually go where amazon on these comeback kids just because i think the ecommerce trends are very much in their favor horizontal platforms like theirs should have less impact. i think we've priced in a lot of pain it doesn't mean people still wonder what a company like this is worth, but this to me is one you're picking at here and this is one on valuation. i realize relative to itself, absurdly cheap relative to the market it kind of makes sense here. >> when you put this together with apple, which we discussed at the top of the show bouncing, as a mosaic of the markets, brian kelly, do you feel a little bit better about today's rally? >> it makes me still feel like it's a tradeable bottom and a bounce, right? yeah did we stop the selling? is adding selling exhausted for the time being absolutely i'm still skeptical this is the beginning of a new bull market by any means at all. if i look at all of those names that are just bombed out, shopify, carvana and docusign, can you trade them i wouldn't trade them after they
bounced 30%. maybe a pullback next week, maybe it's a place to try to trade. but i don't think we're headed into a brand-new bull market >> could walmart or some of the other retail names next week depending on what they say on the consumer give us the next leg higher >> i don't think the retailers are going to take the broader market higher. i think some retailers make a lot of sense we talked about the three i like but i don't think there's going to be a statement as to the health of the consumer or the health of the broader market so as much as i would like to say that, mel, i can't right now >> time for the final trade. tim. >> energy space. schlumberger if you're heading down to the water line, these are the guys to own >> courtney. >> airlines. delta here their revenue is expected to be at 97% still trading 30% lower. i think that's a buy >> guy >> before you go twisting by the pool, folks, it's still a little
cold out there the rangers will actually skate away a game six victory. apa corp love energy. >> bk. >> i love how guy talks basketball i'm going to go with the energy sector as well but i'm going to sell exxon mobil. putting my money where my mouth is i think the political risk is too high >> so far away all right. that does it for us on "fast money. do not go anywhere options action is up next. wealth is breaking ground on your biggest project yet. worth is giving the people who build it a solid foundation. wealth is shutting down the office for mike's retirement party. worth is giving the employee who spent half his life with you, the party of a lifetime. ♪ ♪ wealth is watching your business grow. worth is watching your employees grow with it. ♪ ♪
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ahead on oa, cathie wood's ark etf -- can you use options to play safely for rebounds? plus, is it time to go long on some of these other beaten down stocks we are driving into it in just a few. those are hints and check out today's big bounce stocks rallying. the dow jumping 466-points and the nasdaq surging nearly 4% higher while tech has been hit hard over the last few weeks, tony is