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tv   Fast Money  CNBC  May 19, 2022 5:00pm-6:00pm EDT

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>> it's hard to not look at it as such an important stock >> it's not saying it's not important. not saying it doesn't have a huge impact on the behavior. >> we'll see what happens next that's mike santoli with his last word. "fast money" begins now. right now on "fast," markets unable to come back after yesterday's selloff. major indices ending well. weakness in a couple of big names can show what's to come. future of fintech. we'll be joined by the former head of square capital to get some answers later, hold off. twitter execs give employees hope that a deal with elon musk will happen. i'm melissa lee. this is "fast money. on the desk tonight, karen finer man, dan nathan, tim seymour and
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bono isam. inching ever closer to bear market territory take a look at the continued weakness in what used to be pillars of the market. target, walmart, apple, coca-cola, all megacap names dropping today adding for their losses on the flip side, check out shopify, rivian, zoom video, more multiple stocks what towdoes it tell you where are we in this decline, dan? >> well, i think in the more speculative ones they're kind of running out of sellers possibly especially in the velocity in which they've come down. these were heavily shorted names. i think you're seeing some shorts covered at some of these levels here because i think it's getting harder and harder to justify selling some of those. as far as the megacaps, mike santoli said something on the
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ot. >> overtime. >> about apple as not being the driver for the broad market. >> the bellwether. >> the bellwether. it is 7% of the s&p 500. it is 13% of the nasdaq 100. i think what's really interesting about this stock being so weak on a day like today here is that i think investors are starting to extrapolate some of the stuff we heard out of the major retailers and saying, okay, here's a company that has lots of dollar exposure, lots of exposure to manufacturing in china, lots of exposure to demand in europe the list goes on and on and on, right? to me, it was kind of the last battle fought and it's trying to come apart right now here. i do think you want to keep an eye on apple maybe it does set up for a nice bounce the bounces in the s&p in the last month have been anemic. >> i'm sitting at the cross section of technology and consumer discretionary that's not good for apple.
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the fact that it continues to decline. it feels like 122 which is a recent 52-week low, that doesn't seem that far off at this point. >> no, it doesn't. i think that is -- for the reasons you said, right, the cross section of those two things that are not popular right now, but also to be an expensive stock. as we see market multiples -- >> wait, apple is an expensive stock? it's not that's what you've been saying. >> no, i've been sayingfaceboo is not expensive google is not expensive. apple is expensive it deserves a premium. it's got one. >> no. >> i'm long just to be clear i have not said it is not an expensive stock. >> i have. >> i believe you i think every multiple is coming down something like lulu, great company, expensive even if they deliver, i still the multiple will come down there. i'm long apple just to be clear. >> right >> i do think -- you know, i
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think we're going to see some more weakness there. i was hoping for a little bit of bounce today it sort of started off like one, really no follow through at all. that's a bit disappointing i think we do break that imaginary line of 20% down which is okay. >> yeah. bono, what do you make of this we mentioned apple at the top as one day that continued declines. walmart, target, coca-cola, the things that were viewed as sort of, you know, blue chip stocks you hold in your core portfolio that will take you through tough times, they continued their declines >> yeah, that's a good point and earlier in the segment you mentioned some of the more speculative pockets and some of the outperformance we saw from them today we have to keep in mind, one, who the holders of these companies are or of these shares are. two, what concentration and what percentage of said portfolios do they represent you're going to have a lot more of your portfolio allocated to
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walmart, target, home depot, lowe's, et cetera, et cetera, than you are going to have allocated to a zoom even if you are the most aggressive type of investor your beta adjustment is going to say you're allocated to those than the others. much like dan said, i don't think that is representative of where we are in terms of a market potentially finding a bottom in fact, it tends to make me more concerned we're finally getting to the bellwethers and starting to see cracks there even in those earnings reports and in those guidances that they provided, we still saw nothing pointing to weakness in the consumer and so that can't be priced in if that's the rhetoric that everyone is using, that means that that is still a variable. they have been strong. we've seen access to credit. they have been strong. we've seen rates rise. they have been strong, we've
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seen increase in high yield credit spread. so, you know, all of these forward looking things don't necessarily bode well if that shoe is still to drop. i would say right now you have to actually be pricing in a rare up side case where the consumer remains strong, but if any of the other macro type of shoes that have dropped point anything to any remote weakness in the consumer, and it's not just about supply chain dynamics, then i think we continue to see weakness and these, you know, tertiary names that might outperform, you know, on a one-off basis aren't really where the focus should be. >> so does it feel, tim, like they're coming after the generals so to speak carter worth brought that up, when they comfort generals, that's when the trouble begins we're seeing that in terms of apple slide and next could be energy, which had been a favorite of the market
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>> i'm not ready to push back on energy the generals conversation for sure again, i said 125 on apple is 3800 on the s&p. i still believe that i think we have to get there and then let's have a conversation i think some dynamics going on for the market that are important this week especially you have a trillion nine in notion nal, options expiry there's a lot of chatter in the market that went from some leverage in april and got excited about dispersion and got very levered up. some of the bad stuff rising, some of the good stuff rising. some of the high quality companies have been thrown out i understand what happened in retail with walmart, target, you name it. i do think some of this is way over done. i think some of these consumer staples are part of that levering up and part of fair
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trade that i think are being unwound here the fact that the s&p is going to have, it seems, its seventh straight down week which we haven't done since dotcom, clearly if you look at some of the macro, we had a philly fed today. a couple of days after a new york fed that was awful. i realize these regional fed surveys of activity are a very volatile series. we have multiple months in succ succession we have housing numbers today that really did show a pull back and there's some dynamics that could explain that i think that's where we are. i think there's some very high quality companies that were thrown out the window this week. i think as much as i believe everything that we said, not one of these folks really talked about demand that's what scares me. we just heard about margins, we heard about earnings, we heard about company's inability to price correctly, especially ones
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we thought they could. i am worried that no one has talked about demand even though we've implied that over and over. >> i know, which is the scary thing. take a look at ross stores plunging, right? because of weaker than expected revenue. also talking about the russian/ukraine conflict that's inflationary pressures on the consumer down 23% in one shot i mean, these are meme stock like moves for large companies. >> that's one thing i was going to say about what happened with target yesterday is that i actually thought that brian cornell, he's a great operator great ceo. i think what he said about consumer, that they were shifting, right, from a higher price, higher margin things to like luggage, that did not make me feel better all you have to do is look at airbnb at 52 week lows and say that doesn't mesh up that well food inflation though and my friend danny moses just said
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this to me as it relates to walmart and target, food and the higher prices in places like walmart and target, that's taking more of the cartright there. >> right. >> that is a problem for the consumer because all those things that tim just detailed are not getting any better any soon right now because the fed hasn't started the quantitative tightening they raised 75 basis points at two meetings we know the delay that it takes for that to work into the economy. i think that we're probably not as close to the end of this cycle, this tightening cycle as a lot of people who were bullish on the stock market think we are. >> with all of that said, karen, walmart, third day of decline. >> right. >> target, another terrible day today. >> right. >> how are you thinking about your positions >> so i'm thinking in light of target's release, i think about walmart differently. >> yeah. >> you know, i think -- i think i tweeted in hindsight they might have hit it out of the
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park with that inventory number. we see everybody coming up with a lot of inventory i think though target has been really, really massacred that to me looks a little more interesting than walmart, which is more expensive going in, right? the target multiple now is low double digits, right however, the one thing i hated the most about their conference call was we have this 5.3ish margin -- operating margin with a wide plus or minus around it that i found a little bit unsettling but i do think he's a great operator and, you know, the question is is he going to be, you know, sort of a great operator among terrible operators where it doesn't really matter or can they come out of it? so i'm not a seller of target here but i did not buy any only day two. >> of the three-day rule. our next guest is sounding the alarm on stagflation
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he's yale university senior fellow great to have you, steven. so stagflation is your base case scenario why is that? >> well, melissa, the stagflation scenario is something i wrote about two years ago in the ft, and i worried more about the supply side than the demand side, but now the demand side is has really gotten away from the fed and the fed has a massive amount of tightening to do, not even -- the markets are not even close to discounting the full extent of what's going to be required to bring the demand side under control and so i think that just underscores the deep hole that jerome powell is in. >> inflationary pressures would abate in the back half of the year, what do you say to them?
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shouldn't that be something good that can alleviate that base case scenario? >> yeah. i think that a peak inflation rate argument is sort of a cheap argument i mean, you know, when you go up as fast as we have, as high -- to as high a level or rate as we have, you know, peaking is sort of an arithmetic, obvious outcome here the question is where do we go beyond the peak? i think inflation is going to stay above 5% through the end of the year that would be well above the nominal federal funds rate as discounted in the market so we've still got a negative real federal funds rate which is miles away from neutrality, if you want to call it that, that is associated with a more even keeled monetary policy and not even close to the restrictive
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policy that will ultimately be required to bring inflation down >> it's karen. thanks for being on. let's say that 5% inflation scenario is correct. if you are jay powell, how quickly do you get to 5% or somewhere i mean, maybe you don't get to 5% >> i think you have to get there a lot faster, karen, than the sort of 50 basis point inkremts. even if he does 50 basis points in the next five fmoc meetings in 2022, the fed funds rate ends the year 3 1/4 again, that's still nearly 2 points below what i think the inflation rate will be so 50 basis points doesn't cut it, and by ruling out something larger than that he just sends the signal that his hands are tied and i think the markets are
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uncomfortable with that conclusion >> stephen, it's tim thanks for joining us. the two sides of the stagflation argument you're making i think are only exacerbated by reorganized globalization if i will the fragmentation of the global economy, the isolationism i think adds to both sides of this equation put this in the context of the duration of how long you think we're going to encounter this. >> well, tim, that's what led me to write this article on stagflation a couple of years ago. i completely agree with that i would add to that, of course, zero covid in china along with the repercussions of the war in ukraine and that will, i think, keep the supply side, you know, well extended in terms of a clogging price discovery through the next several years so that's why i think more incumbent on
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the fed to be aggressive on demand management to deal with this protracted congestion on the supply side. >> stephen, when you say stagflation is the base case, do you see that as being a long -- will it hit the economy for a long time, do you think? or is this the kind of thing where the fed could actually eventually get to 5 and we get out of it and that's 2023? >> well, i don't know, melissa you know, you never know how long these things are going to last, but we do know that monetary policy operates with a long lag you know, as tim just eluded to, the supply congestion is here to stay for the foreseeable future and the lagged impacts of fed tightening on the demand side are probably not going to play out full force until late 2023,
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2024 at a minimum and to the extent that the fed stays cautious, you know, we could be dealing with excess demand for even longer than that. so this inflation problem is widespread it's persistent. and likely to be protracted. so the fed needs to take that into greater consideration in formulating its monetary policy strategy >> stephen, it is great to get your thoughts. thank you so much for joining us we appreciate it. >> thank you. >> stephen roach bono, are we priced for stagflation for that scenario? >> i don't think we are. i don't think you've heard corporate execs come out and address that issue i don't think despite the fact we have had multiple compression, i don't think you've seen that really priced in if you have a stagflation, you will see the earnings get
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ratcheted down until we see that, i don't think it's priced in. >> i would say agree whole heartedly. stephen has forgotten more than i'll ever know i don't see the fed fund is anywhere near 5% the last time it was near 5%, it was 2007 i get it they weren't dealing with negative rates and weren't dealing with inflation where it is the last time they were at 2.5%, it was in 2018 what did the fed do? they pivoted i don't think all of these people -- there are a lot of very smart people thinking rates are much higher and going much more aggressively. jim cramer said 1% hike. >> they should have done that before. >> what i'm saying is that now that we have the weakening economy, okay, which is the thing that they're trying to solve for, they run the risk of accelerating it dramatically to the down side. europe is likely to be in a recession because of this war.
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china is having a very difficult time we might not be very far behind it you throw that r out there and housing is peaking and going lower, rates higher, and then the spike in consumer credit we've seen, it makes for a nasty thing. i think the fed after they get done with the two hikes, they have to be very thoughtful especially if they follow through with the qt because they do run with a risk. >> i'm going to be yelled at by our producers. i have one question, tim equity investors, will they react in a negative way to a recession scenario or stagflation scenario >> two different time horizons i think stagflation is something unfortunately going to carry on for a long time. i want to see deep and severe. let's get this over with and i do think that's what the market is calling for. coming up, we have a pair of earnings alerts on deck. heading in different directions after reporting. we'll bring you the information
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welcome back to "fast money. earnings alerts on applied materials. the stock slumping after reporting a miss posting weak guidance for the first quarter. christina has the report. >> thanks, melissa much like the rest of the semiconductor space, it's due to supply chain issues and not demand applied is the biggest maker of machinery used to make chips the ceo warning demand for applied materials products and services have never been stronger yet we remain constrained by ongoing supply issues cash flow taking a hit cash flow came in at about $205 million versus 1.4 billion estimate they did give back 2 billion to shareholders in terms of share repurchases and dividends. the stock though in bear market territory this year falling over 31% year to date from its january high much like its competitors, lamb, similar story, asml a similar
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story. from a valuation standpoint applied materials seems slightly cheaper when you are looking at the lower forward price to earnings ratio chip makers like samsung, intel, they rush or they are rushing to order machinery from applied building up capacity today's report shows the same shortages are leaving applied materials without the parts it needs to make its equipment. >> christina, thank you. you have to wonder with the supply constraints if that will be less in demand because of the things we were talking about, namely recession and stagflation, tim what do you think of this trade? >> you know, yeah. well, if there's a chart that i will have them throw up there if they still have it, which is semiconductors over the last month have outperformed the s&p 500 by 7%. on the last five days by 4 1/2
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percent. am i telling you high multiple stocks are out of the woods? no a lot of these semiconductor companies haven't talked about issues around demand they've talked about supply dynamics for a year and a half they are free cash flow generative companies it's not a chip maker, it provides the equipment to make the chips. their demand, i think, is a little different i think some of their exposure is a little different. i think this is kind of interesting after a big pull back again, semiconductors are showing some defensiveness at least after a major pull back, maybe not forever, but we haven't heard about demand it's one more thing here where that's what concerns me. >> yeah. i would just mention, i mean, i agree with what tim said this is a semiconductor equipment company, right if you're making fabs, globalization, if the move away from some of these places that have been the source of the supply chain issues, they might start to benefit from that over the next year or so. say very soon a lot of investors and analysts are going to start
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looking at the 2023 estimates and trade about 13 times expected eps growth is 13. peg to pe to growth. that one, you just said it, cash flow this is sort of a very good valuation. like anything, no one knows what the low is going to be here. are we one quarter away from a massive guide lower from an intel, from an amd, i don't know and that would certainly go down with it. here i think 12 times or so seems like a pretty even valuation. palo alto out with earnings. issuing strong guidance for the quarter. let's get to frank colholland on the call. >> reporter: on the call that guidance a driver for the price action we've seen. palo alto guiding for 1.53 to 1.5. eps guidance of 226 to 229 on the call ceo nikesha saying
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strong trends. as you might expect, we're seeing heightened interest from commercial and government customers in europe around mitigating this nation state activity they said palo alto managed to have product when many competitors did not. very different from cisco just yesterday. billings up 40%. for anybody that doesn't know, that's money received from customers. 73% increase in deals over $5 million. palo alto is trying to reach the rule of 60 a little different than the rule of 40. that is combined free cash margin and revenue growth. this quarter at 54 the cfo said the company expects to get to 60 by next quarter back over to you. >> frank holland over to you. bono, acompany that's benefitting from the russia/ukraine crisis.
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>> rare one indeed this trades around 49, 50 times forward but if i'm thinking about decreases in cap ex, or slowing enterprise type spin, this is the last thing to get thrown out or ratcheted down when it comes to budgeting for cybersecurity. digital asset safety security is top of mind. i do think there is some margin of safety, you know, priced in there. i will say i would be interested to see a little bit more of book to billing are we seeing any divergence there. that speaks to ability to actually collect from customers. you might -- if you start to see weakness in ability to collect along that type of supply or demand chain, that might let you know one way or another where they're going to be going forward in the next one or two fiscal quarters. >> from an earnings standpoint the setup was pretty difficult this is down 35% of the lows it was at an all-time high on april 20th a few weeks ago if you think about that everything that bono said
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investors are buying into. this one got caught up it still trades a fat, fat multiple to sale and on a gap basis, they lose money those are things if it wasn't in cybersecurity, it would be getting like just creamed right now, you know what i mean? even with the good results but, again, is it going to get back to the highs any time soon not likely but, you know, the setup into it was not great. just getting started on "fast money. here's what's coming up next. fin tech's future. they lay out what's next for the space. who's best positioned and who might not make it through. plus, keeping an eye on kohl's the retailer staging a comeback after a rough earnings miss. karen's not entirely sold. the details ahead. you're watching "fast money" live from the nasdaq market site in times square. we're back right after this.
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can these gains last let's bring in post house capital and former head of square capital jackie areses good to see you. >> thanks for having me. >> it has been a long, hard slog for a lot of these names i'm wondering if this results in some sort of reckoning in the space? >> well, i think we've seen the reckoning in the last seven months it's been tough since the end of november, and if you look even year to date, the nasdaq's down 20%. ecommerce enablement is down 35. all of these stocks have been absolutely impacted by
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inflationary pressure where cpi is at 8.3% 10-year treasury is at 2.9%. commodity is up to $112 a barrel even the volatility that we saw today and over the last month has really impacted this sector. i think it's really over done. if you look at the performance relative to the growth of these companies, you'll see that it is misaligned and that these companies have taken a battering more than the relative overperformance that they've had. if you look at decomposing the multiples and the multiple compression, you'll see that most of the change in their valuations have been related to multiples, not performance, which today continues to be very strong. >> the concern though for investors is that on top of this multiple compression because of high valuation names getting a lower valuation in this kind of market, there's the next shoe to drop and that's the impact on
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consumers with delinquencies they've actually gone up so can you help us understand, you know, if consumer credit continues to deteriorate, how it affects these various companies? because it affects them in very different ways. >> absolutely. there is a bifurcation between those that have asset like balance sheets and those that don't. so there's a wide swath of the payments market, software companies that don't actually lean into any loans on their balance sheet but while there are obviously some names that are very balance sheet heavy like mortgage lenders, those and buy now and pay later and other credit markets i do think you'll see an impact on the consumer as the markets change as rates go up, but so far we haven't seen it come into the data today >> hey, jackie it's karen thanks for being on. so you talk about the multiples having come down a lot the multiples were in just crazy territory so they've come down,
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but what is the right number for where they've come down and they're reasonable some of them still seem very expensive on many metrics. >> yeah, you know, the metric that i use is that they were about 12 times revenue and now they're about 3.7 times revenue and when you look over time, today they're below pre-covid levels in terms of like a long-term growth trajectory. so there is some overall resetting back to a more normative level on performance of these levels. so i do think that period of time between march 2020 or maybe it's may 2020 and then november of 2021 was probably more abnormal and we're back down on a slope but, again, as i said, i think the fin tech multiples, particularly some of the payments and crypto multiples have been hurt relative to the growth rate. i do think they'll reset back to a more steady state higher levels but i think it will take a few quarters to see that balance out and have the sector
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come back to a more moderate level of performance. >> jackie, i want to zero in on the last statement you say we haven't seen in the numbers yet in terms of consumer weakening. what happens when we see it in the numbers. how should we think about that for something like a buy now, pay later like an affirm i would think it would indicate the pool to whom you would extend buy now pay later becomes smaller so the growth trajectory also slows down and that's not priced in yet. >> you know, i won't speak to any one company in particular. i'll speak to the industry overall. i think there are some interesting dynamics of these companies which is they're short duration, high velocity loans so the ability to adjust performance on loans in the buy now pay later industry is incredibly agile so i think what you'll see happen is that they'll increase the credit performance as it relates to who gets a loan so they'll shrink the credit box so
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you will start to see some adjusting over time as the consumer credit markets tighten, but as of today you haven't seen that so these lenders are able to continue to lend because of their ability to adjust so agilely versus those that are in long duration products where they have to make credit decisions on a 30-year pay back. i think these kinds of companies have the ability to take their loans and play in an asset like model. so so long as liquidity operates in the market, whether securitizations, sell them off balance sheet, evolve their performance over time. >> jackie, i hope we'll see you soon again >> thank you. >> jackie reses. >> good to see you. >> karen, you've dug into this space a lot. you own some of these names. in light of what's going on --
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>> i don't anymore, actually i bought affirm, sold affirm bought paypal, sold paypal i do own banks to the extent where you're going with credit, if it affects affirm or square capital or something like that, it's going to affect banks as well. so that's concerning that we're just at the very beginning of seeing credit quality begin to deteriorate. that's still concerning. there's a bounce there, but they just seem high i hear what she's saying, they're down 70 odd some percent. >> interesting you made a great point about subprime and the defaults coming right now. you would have a couple of years ago been able to say they benefit from the secular shift but they all moved into buy now and pay later. we know square bought a company. paypal bought a company. paypal does not have a whole
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heck of a lot of risk. jackie just said this, this stock is not even only come back to the pre-pandemic highs and got back to the max lows of 2020 it's now 75% it will grow earnings and sales mid teens for the next few years or so. that makes sense to me versus an affirm which is also down 75% which is not expected to be profitable for four years or something like that. i think not all finteches are kind of -- i think there's lots of opportunities and quality names. >> bono, very quickly, what's your pick in the space >> i like paypal i also like square i think it's here in the present and the future you have actual square for transactions of smes you have the catshack and then you have the future outside of the blockchain. kohl's staging a comeback but karen's not entirely sold on
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this retailer yet. she'll explain why. deere outrunning the broader market options say this could get caught in the headlights after rngs we have the details when "fast money" returns
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welcome back to "fast money. kohl's shares ending the day up nearly 4.5%. ceo michelle gass says she is expecting to receive final bids to take the company private. karen is not sold on what they're trying to sell. >> i think i know what they're trying to sell kohl's announced a miss and a guide lower. that was not a surprise. what was surprising is last night after the close they put out an 8 k two sentences long really important, on may 12th kohl's corporation announced that greg revell will be departing the company effective june 1st it took them six days to come out with that sentence, six days elon musk could have made a filing quicker than that also, they didn't announce it, google it. you can't find anything about him leaving. you can't find it in news report
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they didn't announce it at least to the shareholders. then the second sentence, which they must have worked through the night to get that done because they got it done the same day it happened was that the chief marketing officer -- i'm sorry, the chief merchandising officer was leaving. what's interesting about that? may 12th is the day after the very hotly contested shareholder meeting where the board said, trust us trust our plan don't go with the activists who want to sell it. i find it nearly impossible to believe that may 11th, the day of that meeting when they should have told shareholders that the merchandising and marketing chiefs were leaving, that they failed to mention that and it took them six days to come to this 8k. that's ridiculous. it's offensive also as a shareholder. let's go back to january it's five months -- four months later and now they're just sort of going to receive bids in a few weeks.
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i don't know if it gets sold or not but i can tell you the value they will get now is less than the value they would have gotten in january after those bids they said, trust us here's our investor day and here's the great plan. the stock went from 58 to 51 on the day of their great plan so i think, you know, they've -- i don't know, i just feel like they destroyed value for shareholders the expressions of interest that they've had i hope are still there, but it's hard to believe that this management will do the right thing. maybe they'll be shamed into it. i don't know but on their cheery conference call today where they gave one sentence to the chief marketing and merchandising officer leaving but really had a cheery outcome, that seems quite impossible for me to believe, but let's say you do, i still don't think that's enough for you to deliver value to the shareholders like you could have, maybe still can, through a sale that's the only reason that the stock is up, that they hopefully they will be shamed into a sale.
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>> that doesn't seem like a good strategy, tim. it's rare that we see the chair woman worked up to this degree on any issue. >> oh, man >> oh, i love to see her so exercised, and she's dead on and she's often exercised for reasons that i think are there to protect a lot of other investors. my question back to you, karen, is for a company that's got an outside bid and there's been activist investors and there's a couple bids out there, to what extent is there something to do here again, you believe that the management in their bid to take private is being less than forthcoming, but ultimately it does seem like there's a floor under this stock that is significantly higher than where it is, let alone the fact it trades at 5 1/2 to 6 times next year i don't love their business but i don't understand the market is doing what you believe is a lot of intrinsic value higher. >> so i think people don't
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believe their plan, right? it does seem cheap, but people don't believe their plan they haven't been able to recover the way a macy's have, the way a dillards have. margins aren't as good to the extent they rule out the possibility of a higher offer and we need to stick with this plan, which despite coming in at about 2.2 of operating margin, they're guiding to 6 to 7 for the year i don't know i just -- i find it hard to believe them so for me, i think the best they can do for shareholders is to sell the company. coming up, i hope they're watching, i really do, frankly, my dear, i don't give a damn that's the word from options traders who say the industrial giant is about to get mowed down. plus, final offer. the latest on elon musk's twitter deal and why a lower esone could be out of the quti the details when "fast money" returns.
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welcome back to "fast money. they say nothing runs like eye deere. the rest of the industrials haven't this year. outperforming by 20% deere reports earnings tomorrow before the bell and despite the
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gains, options traders are betting the stock will limp and not run into the weekend michael has the action mike >> 7 times daily put the most active options for most of the day today were the may 350 puts we saw them trading for $6.60. late we saw some of the may 300 puts trading some options traders might be concerned there could be some down side. that could be because the stock has considerably outperformed both the industrials and the s&p and they're hedging. >> thank you, tonight, we'll see you tomorrow the full show airs tomorrow 5:30 p.m. eastern time for "options action." coming up, the latest on elon musk when "fast money" returns.
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they won't be renegotiating the price of the purchase. this just days after musk said the deal was on pause. shares of the social media platform popped. end of the day higher by more than 1% here karen, i don't know what people were expecting the ceo to say. below price? that would be nuts. >> that would be crazy he's doing the right thing he's saying, we have a signed deal there is no such thing as pause, especially for an issue that if it were that important to him, he could have negotiated a very, very clear sort of containment about the number of bots he didn't. they revealed it in their sec documents so i don't think he's got any legs to stand on except for he might be the only bidder there. there's no way the board should cave, no way. >> bono? >> they won't cave but the thing is this thing could still get caught up in a long, protracted litigation or settlement which
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means that it still gives some wiggle room for investors, shareholders to, you know, not want to deal with the back and forth. i totally agree with you and karen. what other position is the guy going to take besides saying, listen, you signed it, you bought it, you bought it how you saw it, this is what it is but it doesn't mean you can't see continued volatility and that's ultimately what viewers reca about. >> up next, final trades
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time for the final trade bono in? >> every time i get up here i'm going to tell you what companies you should buy and sell. you should have some c cash allocation particularly if the opportunity cost is rising for other reasons and you're feeling the pinch. have some allocation in cash don't feel the need to buy. >> so just cash, not new holdings cash tim? >> new holdings, one of jackie's board seats. a bank down in latin america that's fin tech but it's brick and mortar and it's growing and i think it's outperforming here. >> karen >> yes in spite of the rant i am long kohl's for the reason being i
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think they might feel they have to do the right thing for the shareholders something new. they haven't been doing that lately here's a chance to get shaken out higher. >> or lawsuit. >> dan >> i say target. i know you're waiting. that is going to be interesting somewhere in the 141, 150 range. >> "mad money" starts right nowg mad money starts right now my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a working summer, and i promise to help you find it mad money starts now hey, i'm cramer. welcome to mad money my are friends, going to try to make you some money. my job is not just to teach but to entertain can't feel good about a market that gets sent down with stocks like pepsi c


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