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tv   Fast Money  CNBC  May 20, 2022 5:00pm-5:30pm EDT

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revenue growth they're able to capitalize on this and the other retailers are having a hard time. >> i'm going to have to leave it there. you have a good weekend and i'll see you. that's max wasserman quite a week for the markets i hope all of you have a great weekend. "fast money" starts now. right now on "fast," stocks staging a comeback in the last hour of trading. the s&p narrowly avoiding a bear market close can the momentum last? from key asset to major liability, elon musk making headlines for all the wrong reasons over the last few weeks. could all that distraction mean more big trouble to the stock? later, after all this week's volatility, we have more market moving events on tap what's on the traders' radar i'm melissa lee. this is "fast money. " on the desk tim seymour, dan nathan, karen finerman and
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banoman. the s&p 500 managed to finish the day in the green. the dow and nasdaq off their lows of the day. has the market truly found its bottom and what could the rebound mean as we head into next week? tim, did you note a little sarcasm? >> and we appreciate some sarcasm on a crazy week. if you think also that move of 2% in the last whatever minutes of trading is something that's probably more related to the options guru on this side of the desk can talk about it we a trillion nine in equity derivatives and things that see the dealer community unwiped volatility and be in a position to get this market back. this was the week that retail kind of stole the market it was a week where walmart and target became microsoft and amazon and apple to some extent, i think some of
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the dynamics we talked about, we've heard about so many hedge funds that have had very difficult times. i don't think a lot of the selling was all fundamental. you had a lot of risk positions that were told to take down why, good companies were sold more than i think they should have been and bad companies might have rallied more than they should it's also a week where the fed told us there is no fed put. >> agreed. the s&p 500 closed yesterday at 3900 and today it was closed at 3900 to the penny so if you put your options derivatives hat on, you'd say something funky was going on when you get that late day movement i will say this about the retail stuff. there's two names that i actually -- aside from target and walmart, i think that deere had to say and cisco had to say, this leads me to believe that companies like apple and tesla that did very well in the prior quarter dealing with some of these supply chain issues. they were talking about demand was good but they didn't have
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access to components or product or that sort of thing to meet the demand i think what cisco said and deere said was these guys that are very well exposed i don't it side the u.s. might have some problems here. we'll talk about tesla later for other reasons but i think that's a story as we go into the back half of q2 that a lot of analysts will start lowering their numbers. don't forget where the dollar is that quarter over quarter, year over year, big impact. >> so we're finally coming to grips, and the markets we, with the fact that china could be a bigger issue than we thought previously, spline chain issues as it relates to china are not easing and by the way, the conflict between russia and ukraine, that's actually an impact too that we haven't come to grips with do you buy that? these seem to be so obvious. do you think it's finally eyes
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open to these issues and the markets? >> i think people want to keep the waters calm, and so they are alluding to it and giving you some notice. it's much more of a major issue, i agree. it's also beginning to be much more of a protracted, long-standing issue. and that's really where the question is. there's no denying that it's there. there's no denying the inflationary pressures that is causing both food prices and supply constraints, but also how long will this persist i think that's the wild card that's still yet to unfold. >> yeah. and the other wild card of course is the impact on the consumer, karen. so after all of this is said, we've got all these earnings out. we've got all these rates from various retailers. how are you feeling about the consumer and whether or not we have our arms around the impact the consumer is feeling from inflation, from rising rates, et
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cetera >> i think the consumer is probably feeling somewhat confused, right? it depends on which consumer you're talking about some companies obviously have very different consumers one interesting data point today, the cartier parent had terrible sales that took everyone by surprise that stock got hit 12, 13% i don't know where it closed so that's interesting. it makes me think is there any area that's safe usually luxury is safe somewhat, but maybe because luxury has grown so much from that chinese market or other asian markets as well, maybe that's not as safe anymore. i don't know, i feel like there was a lot of disarray and among shareholders looking at walmart and target, wow, that first 32% inventory
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build at walmart and even greater one at target, that was pretty staggering. however, i did at the very end of the day today buy a little target, it being day three of course and i felt like ac, you know wh, they have really gotten annihilated. the stock has gone from 230 to 155, i don't know where exactly it closed, but that's a pretty big markdown for a company that was not trading at a frothy, frothy multiple so i understand there was pull forward and they benefited from the pandemic but i think a lot of damage, a lot of concern among consumers is priced in a lot of fear of inflation a lot of supply chain issues and i which see that recurring i see them having to work through it, that it already exists, but i don't see them building another quarter of gigantic surprising inventory that will take the market shockingly down. >> so karen was not alone buying
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the dip in target. when we will see the dip for big cap tech big cap tech which has been in a bear market longer than the s&p 500? i mean we're talking about -- i mean at the lows of the day, apple was down, what, 2.6%, 2.7, something like that. >> mel confided before the show that she started watching "top gun" for the first time. the market -- apple has lost that loving feeling. >> now i get it. now i understand >> there you go. and so -- excuse me, yes, apple relative to the s&p in the last two weeks has underperformed the s&p by 9% after outperforming the s&p by 30% for the year up to that. so you have a case here where i just think, first of all, we talk about the relationship between apple and the market i don't think this market can do anything with both apple and tesla. so far above kind of their long-term averages i think you still see a lot of that coming down. >> i would say this, when it
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broke 150 last week, it broke the hard deck and it was in the danger zone. you see what i did there and for the last two weeks or so and here's the thing so your question was when does big cap tech hit bottom? i'll tell you when, when these guys guide down. >> we haven't heard about demand fall-off. >> they're still high single digits percentage. when we started whining about it, i did, i guess, when it was trading 27 times, there's no way they're going to do 90% earnings growth so right now it's trading about 22 times but the estimate is still there. when the estimate comes down, it doesn't mean it's going to get cheaper, the stock might go down into that. so we need to have these estimates realigned. they almost have to be too conservative in a way and then the stocks can start working again. >> isn't apple a consumer company? >> yes. >> if we're hearing the consumer is moving away from general merchandise, and i realize that apple is a luxury good, i think there's a lot more resiliency
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there. but i haven't heard apple say one word about demand. you can't tell me they haven't pulled forward so many cycles here it's great that they have navigated supply chain and talked about inflationary dynamics, they have china dynamics and done very well. but the minute apple guides lower on demand is a period the market is not ready for. >> once upon a time people believed people would give up everything before giving up their iphone and give up everything before upgrading their iphone does that still pertain to this market, bonawyn? >> to an extend but i would argue they have. it's been taken from them. inflation has eaten through it have they supposed to not eat? are they supposed to not drive there's a limit to how much they can give when it comes to it being an actual option, i'm sure that they're willing to forego pretty much everything aside from travel that seems to be holding up well when it comes to core basics,
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necessities that one needs to sustain and survive themselves, rent prices, home prices all going up fuel costs is going up costs to sustain one's self through food and water is going up so those things can't move the rest of it has. >> 5g is not going to trump eating, karen. how are you thinking about apple and some of the other companies for this current quarter to the extent that these guys here are saying they haven't guided, the guidance has not come down and it needs to come down. >> well, i don't -- i don't think they like to really give guidance so much we've talked a couple of times about them giving guide anxious and not giving guidance. but i think to me this is such a big transaction quarter from lapping the stimulus and supply chain issues, i don't know if it's so much about the quarter as it is about the outlook
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and i wonder, we always talk about this notion of is it a sale denied or a sale delayed. i'm not quite sure how to think about a scenario where apple says we were unable to fill demand how much should that hit the stock? certainly it should hit the stock less than the demand just didn't show up so we cut price because we had excess inventory. that's a bad scenario. i'm long apple i don't know if we're going to get that i think we may get more of the former we couldn't make enough phones so we missed. >> and the quarter just reported they kind of said that demand was pretty good and supply chain they managed pretty well so the guidance wasn't fantastic. you could see the potential for poor visibility going forward. i'll just mention this if we know a lot of consumer oriented companies have to make a decision to pass through some of these greater costs or eat it, when i look at apple's
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margins at 43% up from 39.5%, i'd say there's risk there. >> their asp is higher they have been able to pass it on people were mailed stimulus checks how many of those turned into phones >> they bought ipads to work from home and laptops to work from home. people don't upgrade their laptops because of a 5g supercycle there's no supercycles, there haven't been the best thing that's coming out of apple the next couple of years is apple prime you're not going to think about the asp as $1,000 out of your pocket it's the sort of monthly membership that you're paying for the hardware and services going forward. that's coming to a theater near you. and that might justify the valuation at 23 or 24 times. >> our audience just got people, by the way. >> dan means business. let's map out the key levels with the chart master. carter, how much damage has been done this week >> well, actually there is a
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milestone this week before we look at the charts the nasdaq 100, of course, which is the big one, the one that's achieved 13 consecutive years of positive total return, it as of today down 31% from its peak that's exactly the amount we drop from the pre-covid peak to the covid low. of course that 31% decline in covid was 20 sessions, this one has been six months. let's look at a few charts and try to figure it out together. so these are charts you've seen before there are any number of reference points as good as any is the prior high and pre-covid level. were we simply to go down to where we were before covid struck, we would drop another 14% from here. now, if you look at that same chart and move forward, what would be the peak-to-trough decline? it would be then 42% now, certainly the nasdaq 100 dropped 84% in the dotcom and
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54% in the 2007-2009 so it's perfectly possible let's look at the same seen conv sequencing of the s&p. the reference points and another way to look at it, second iteration what would the peak-to-trough decline be were we to get there? it would be 30%. so these things have to be considered i think the important thing is to your question was the damage is substantial money has been lost and there are a lot of people trapped above. not to mention people who have yet to sell a single share let's look at apple, though, because it is the big one and this final chart is apple's relative performance to the s&p. and so a ratio chart is simply taking one thing divided by the other and plotting it as a line. what we know, of course, is that apple's relative performance essentially peaked more than two
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years ago and it is now at risk of breaking to the downside. and i have to think that that's likely, that apple's underperformance day over day, week over week continues. >> carter, thank you we'll see you in a bit on "options action. bonawyn, is apple investable here >> investable, yes, because that implies that your time horizon is much longer it's probably not the right time to get -- a bit longer, sorry. it's probably not the right time to trade it for a short-term bounce i don't think this is a low or the right entry point, if that's what you're asking me. in terms of do i think you can start to deploy some capital because you have a long-term thesis about the stock yes. but i would have said the same thing $10 ago. >> tim, do you agree >> it's almost like you're trying to trick us with the question and bonawyn didn't fall for it, by the way, good man
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i believe apple is going lower i don't think i'm going to hear unbridled ahead or full steam ahead. i don't think i'm going to hear about a new refresh cycle. i think 125 is assured on apple. i'd like to see it get a little bit lower. no one is going to ring a bell for you, and i think investors can start to nibble at apple but i think it's going to trade lower. >> it feels like we're waiting for people to lay out the worst case scenario. we're waiting for jerome powell to say 75 or 100 is on the table or for the companies to say the consumer is getting soft we don't know what the impact is going to be. let's put it out there and move on. >> this is not unheard of, mel do you remember the 2nd day of january, 2019, the first trading day they posted a first pre preannouncement and the stock got creamed. that was the low split adjusted it was like $40 so we might see in the next, i don't know, month or so, probably early july, the first two weeks of july before
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earnings season, some negative preannouncements we might see it before the quarter is over. we may see near term capitulation and maybe get to some levels that carter is mentioning. earnings and davos and oh my find out what the traders are watching in the week ahead. first, tesla tanking what investors are pumping the brakes on isth one that and more when "fast money" returns. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
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get a great deal on this limited time price with internet and voice for just $49.99 a month for 24 months with a 2-year price guarantee. call today. welcome back to "fast mo money. tesla under pressure as ceo elon musk makes headlines for reasons unrelated to the company, from his bid to twitter to most recently allegations of sexual assault. is musk long seen as key to the business now a liability for the business karen, what do you say >> i say no. i think that if musk were to leave, i think the stock would be down huge so that to me says he's not a liability. is he as much of an asset as he was before maybe not for several reasons. one, the twitter distraction is obviously enormous
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i don't know if you saw in the last hour, he announced that they're starting a big litigation department. i don't know if that's a not thinly veiled threat to twitter, i'm not really sure. i don't know -- why does he need to distract himself with all of those things if i were a tesla shareholder, i wouldn't be delighted by this, but more than anything out of that company, i still want elon to be running the show he's -- i don't know of another company that has as much embedded in the ceo being there as tesla does. >> there's two classes of shareholders those who believe in the secular shift toward ev and the elon musk-like disciples. and they're going to get shaken out. you know why because every major market mania in the last 25 years led by a cult leader like him has eventually blown up. it just happens, it's a fact the fact that this one won't doesn't make any sense to me at least as far as my market history is concerned.
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coming up, check out the slew of big names reporting next week we'll break down who you should be watching. later on "options action" coinbase getting crushed we'll risk less and make more. much more "fast money" in two. flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
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what jamie dimon is great for for this market is a very sober, rational look. their business is very strong right now. their consumer and credit trends are fine jamie will probably get into a little bit about market dynamics and things that i think he can speak for people that are concerned about some of the cross currents but i do think this is going to be a case where you're going to hear about money center banks whose businesses are in very good shape right now i think that's probably what we're going to hear. investor days are usually times to sprinkle good news, not bad. >> there will be a deterioration in consumers' ability to pay i wonder if jpmorgan, if jamie dimon, karen, will echo those thoughts and maybe elaborate on them >> i think he might. he might also say it's not happening right now. it will because the credit quality has been pristine and it takes some time before you work
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through the balance sheet improvement that consumers have. but i do think it's coming mathematically there's not a lot better it can go so that part is definitely coming i think this meeting may be unusual in that normally everyone, including me, tells jamie he's great i think he's going to get a lot of pushback here on, you know, why is jpmorgan underperforming. why is their spending so high? what do they have to show for it >> look at every bank, though. >> yes, true one day of succession will come up there. >> a lot ahead next week. time for the final trade bonawyn. >> i think credit spreads are widen, look for continued weakness in hyg. >> karen. >> i'm just looking for value. cvs. >> tim. >> i'll never leave your wing man, just so you know that i think walmart. i think some of the selling this week was not fundamental
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i think you get a dynamic that's still very attractive next week. >> all these things now make sense to me. >> welcome aboard. >> dan. >> paypal. it's inverted like this. this stock has lost 75% of its value. >> all right that does it for us here on "fast money. do not go anywhere "options action" is up next.
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facebook's products harm children, stoke division and, weaken our democracy.e. teens blame instagram for increases in the rate of anxiety and depression. it's not great when your customers are voting with their feet and deciding to kind of walk away. facebook's parent company meta dropping more than 26% last week... that is more than $230 billion in market share value. when will there be accountability? how many more people need to be harmed before mark zuckerberg listens?
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it's friday and that means it is time for "options action." i'm melissa lee. the major indices just barely pulled out of bear market territory to close essentially flat what does one do when clinging to the edge of the precipice on this show we use options to risk less and preserve more. one of the worst performing sectors today, industrials the sector dropping 1%, now down 15% for the year if you want to be constructive on the group, carter and mike have some thoughts before you hop in carter, take it away. >> yes, let's plunge right in. the first char

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