tv Fast Money CNBC May 23, 2022 5:00pm-6:00pm EDT
days together. not asking for that much. >> no, it's not and very well might. maybe expectations are beaten down low enough. the smart thing is forget about the all-time highs you've got to be up 23% to be to the all-time highs is this a good long-term entry point or not. >> that's mike santoli with his last word. i'll see you back here tomorrow. "fast money" begins right now. right now on "fast" a big bank bonanza bullish talk from jamie dimon and jpmorgan fueling a financial frenzy is this a bear market bounce or the start to an early summer rally? plus, president biden pledges to defend taiwan if it faces an attack from china the white house then walked back the president's comments how nervous should investors be about rising risks in u.s./chinese relationship? and later, after walmart's whopper and the target tumble, should investors brace for another retail rout when best buy, macy's and the dollar stores report this week? i'm melissa lee.
this is "fast money. on the desk tonight tim seem more, karen finerman, dan nathan and guy adami. we start off with the jamie dimon rally. the company held its first investor day since the start of the pandemic the bank saying it could hit roe targets faster than expected the stock rallied nearly 2%. the dow and nasdaq strongly positive too do these comments from jamie dimon suggest broader strength in the economy and markets do we believe jamie dimon versus what some other prognosticators are saying karen? >> she believes everything he says let's be fair. >> there was a lot to love about this investor day and i'm not just talking about jamie dimon he was very optimistic, which is great. he often has a great handle on the economy at large so i like to hear what he has to say but the things that were really important today were the net interest margin. last quarter there was so much concern about the net interest margin shrinking
this quarter with rates higher, they said the net interest margin will go from 53 to 56 and exit the year at a 66 runway that was very, very good the other thing that they really focused on was spend that also hurt the stock the last quarter but they really went through and tried to talk about why they spent, how productive that spend would be, how much is worth their while and each division went through and talked about their spend. i think mary did a particularly good jobin the wealth management and then i think there was a lot of let's talk about jpmorgan as evolving into a fintech kind of company. for a long time he's been extremely frustrated by the fintech valuations that have been sky high. they have only come back to like ridiculously high, not sky high anymore. and the bank valuations, which are still in the very low double-digit range so there was a lot to like here. huge run in the stock, which takes us only back to may 5th. which is sad so i like jpmorgan i'm long jpmorgan.
it's not my biggest bank position, but i think it was a good read for all of them. >> they talked about buy now, pay later. some of these new credit services they also talked about fractional shares, which i thought would have hurt robinhood but didn't really, tim. but to the notion that they want to be more fintechy, that they're seeing strength of the consumer that the near term consumer looks good, credit looks good. it's all coming up roses despite storm clouds. >> two soap boxes i have on fintech companies, a lot are finance companies and a lot of fintech that aren't any more fintech than jpmorgan who i think is the best bank in the world. when i hear that, i agree. at times we've thought some of these banks should get more of a fintech multiple i love the fact that the return on equity, he's reaffirmed 17% that's really important for shareholders and today it was more important for the banks than the entire market i think you hear that interest margin karen talked about it. that annualized fourth quarter
net interest income is up 50% from the 2021 number so i think if you look at money center banks, citibank is up almost 20% over the last few days, including their move today. jpmorgan has lagged that the one thing about it, credit -- we don't see that credit dynamic yet for the consumer, but if you're watching high yield, you've got the high yield spread over treasuries now up around 490 over, which is a major -- you know, relative to itself to where it was, that's up about 150 basis points in the last three months and back to november 2020, which was not an easy time. >> not an easy time. you guys sound pretty optimistic about it heading into this event, which was well telegraphed, we were talking about it last week on friday jpmorgan was making a new 52-week low. it was down 33% from its high last fall. didn't even make a new high with the s&p 500 in january we had that gap on their q4 earnings announcement about spend. so when i hear you guys say you're excited about --
>> he's hanging up on us. >> i hear you guys talking about the transition to fintech. that means higher spend to me. it does, a b, don't love it because that is literally the part of the credit that you just talked about, which will start to erode if we do have a weakening consumer and i just think it's interesting that jamie, you know, again, i think for him to pile on where we are with the broad market, where his stock was, and all of the uncertainty didn't seem like a great press on the short side is what i'm saying do you guys think he sounded so bullish? his stock was down 33% from an all-time high versus an s&p that was down 20% at its lows last week so it's massively underperformed the broad market my point is he was going to have a hard time coming on and being dumpy. >> he gave cyclical timelines and talked about storm clouds and he was jamie sunshine today. that dynamic is a case where his
words of calm and balance doesn't mean he's saying everything is okay i hear you on, look, there's a lot of consumer exposure i don't want to see them take out bad consumer loans but i want to see them spending on fintech and get them on the multiple than a lot of companies that already have it. >> he said it's a strong economy right now so if there is a recession it could be a little different from past recessions because of the strength of the consumer, the strength of the economy going in guy, with the tremendous headwinds facing the economy, pretty measured. i felt like it was a rorschach test in terms of what you wanted to read from jamie dimon's comments if you were more sunny about things or you wanted to be more downbeat. there was enough for everybody >> yeah, not sure who rorschach is but i'm sure he gave a great test listen, jamie does an amazing job of talking to the market we've said that for years. tim talks about the word tactical all the time. we did a little segment last week, i believe, that we called so bad it's good and banks were what we talked about within a day or so i think we did a decent job
jpmorgan got down below 1.7 times tangible book. i think you can still own the stock here tactically. i think you can get a little north of two times and then get you this 140ish, 144 level which is a 50% retracement of the move dan just outlined. so i think you've got to be tactical here. i think the banks can continue to grind higher. i'm not going to say where the economy is going to be but the storm clouds are still out there and we'll talk about some of them in a few minutes. >> just to address your point, dan, this spend, this is what took the stock down. so for him to address the spending i thought was actually good and to describe how they're going to get productivity out of the spend. you know, each division went through and talked about where the productivity was now, in addition they also have when you're a bank like that, you just have a ton of spend anyway but i thought that was more detail than we had ever seen on the spend so that was really important. if i had to pick one thing that was negative about the day, i would say that if they're going to do big acquisitions, they
probably will not be able to increase their buybacks because of capital and deposits will be smaller across the board across the board, every bank, everywhere >> real quickly, so my takeaway from a lot of the earnings and now we are on the back side of this earnings season here. everyone seemed to be really confident about consumer demand right now. felt really confident that it's going to be here i just say the last couple of times that we've had recessions or at least the last three, it was the same exact situation here and we're halfway to a recession. and i understand we won't know that we have a recession until after the fact but don't forget, guys remember the recession after the '08 recession. once the market turns, once housing turns, once consumer balance sheets are not as good as they were at the height of the cycle, then you have that negative wealth effect so to me it doesn't make me feel more confident that ceos whose stocks are down 33% on the year
are saying something really optimistic about the consumer at a time where it seems it makes more sense to be more cautious about consumer spending right now. >> well, that's fair how do you know we're halfway to a recession, though? >> last quarter we were down and this quarter we were down. >> so the tactical definition on me but we're not going to have a recession in the next six months you know, i'm not an economist, but i do think the dynamic here for the economy isn't great as we look into '23 i'm not going to argue with that i guess i look at jpmorgan, which pays a 3.3% dividend yield, whose balance sheet has probably never been better and look at the quality of their earnings and predictability over the next couple quarters, i don't think we're supposed to be pricing in loan loss provisions at this point. i think we look at a company on multiple and where they are in the cycle and that's what i think today is about i don't think it's all clear for the markets, for the economy and for the world, but i think for banks that's really what the message was today. and i thought it was loud and clear.
>> i guess the question is when do you start pricing in for loan loss provisions. just last week wells fargo ceo talked about a deterioration in consumers' ability to pay. some could argue that the customer base for wells fargo and jpmorgan are slightly different. >> jpmorgan argued that. >> their customer bases are slightly different jpmorgan has slightly wealthier clientele than wells fargo so maybe they're seeing something slightly different at this point in time but if the market is forward looking, at what point do you say in six months we may not see a recession, but in eight things may turn soft, in nine months. and when do you start pricing that in? we're not that far, to dan's point, off of a low for jpmorgan 6% rally sounds great but maybe we're still looking ahead to that. >> i feel like the stock at this level is pricing in a lot of things it's not pricing in great loan growth if you've got good loan growth, you get a bigger expansion in the margin it's not pricing that in so i feel like it's also pricing
in potential additions to the provision for loan losses not priced in. but you have other businesses doing very well. the wealth management business, for example. so i think -- i mean if in your argument is there any price at which one should buy jpmorgan, right, if one is bearish and i just have a different price. >> maybe the answer is no. >> but she asks the questions around here. but i'll just say this what seemed like really interesting to me is that we've seen a lot of stocks in the market that they have round tripped their pre-pandemic highs. so the february 2020 highs and there's a big gap in this jpmorgan chart from below that, well below that, so it's already come back to that, around 105. and i think a lot of stocks in a market like this, and again, i have no idea if we're going to be in a recession and have no idea how protracted the bear market is going to be and make no mistake about it, we are in a bear market and now it just depends how long it sticks around to me i just think that you want
to see stocks like this overshoot to the downside. friday at the 52-week low was not an overshoot to the downside for jpmorgan. >> did you think they pulled forward a lot of pandemic business is that what you're saying >> i think that they have been releasing those reserves that they took during the pandemic for the last year and at some point as the consumer gets worse -- >> we've got some breaking news on snap. julia boorstin has the story >> snap is speaking at the jpmorgan conference. the company warning that the macro environment has deteriorated further and faster than we anticipated when we issued our quarterly guidance last month, saying as a result while our revenue continues to grow year over year, it is growing more slowly than we expected at this time. saying we believe it is now likely that we will report revenue and adjusted ebitda below the low end of the guidance range we provided for this quarter you see snap shares are down
double digits. and this is notable because, melissa, that earnings report was just about a month ago so it seems like the environment has gotten much worse just in the past four weeks. we see snap shares are now down 18%. evan will be speaking shortly and we will be back with more. >> julia, thank you. i think the key point julia made was just a month ago evan spiegel was talking to investors with their earnings release and so what happened in one month and how should we project this onto other companies guy, what's your take? no we don't have guy, sorry. >> is he in time-out >> can i jump in because i think this is what you would call in the business a good segue to the conversation that we were just having if you're a consumer products brand and you're slowing down your spend on snap, it's because some of the trends that you see in your underlying business. this is happening, people. we talked about it last week i'm just saying so what's going
on right now, we're seeing revaluations in private tech we're going to see a ton of blowups there. they spend on aws, on azure, facebook ads, snap advertising and they're going to be pulling back to me i just think this is something that will play out the next couple of months. >> i hear you and i think there's no question the guide is looking from advertising and looking at ad revenue and the places where snap has been a pleasant surprise on the growth side of it but it's still one of those companies with a multiple that makes no sense it's still a company that has free cash flow dynamics that make no sense for this market. so this is very different than talking about a market and banks where i think you can own jpmorgan here. i don't want to own snap here. i think there's a lot of stocks, and this is -- in the context of this show, i believe actually markets can go lower and will go lower from here. but i don't think that they have to go lower today for the next three months and i think that to me about the last segment, i want to get back to jpmorgan, we're talking about snap the dynamic with snap and other
companies depending on advertising dollars, that is a dynamic. we haven't heard about a falloff of demand, just supply chain dynamics and this isn't good. >> guy, we're also watching facebook shares now. we just put up a screen of all the related stacks that are also trading lower on the back of the snap news. is that warranted? >> yes the one that i'd be really interested, i'm sure karen will agree here, is what happens to google i'm sure it's lower in the after market i think the stock was up 55 or so dollars today it's probably down maybe by about that in the after hours. but to me google is the one to watch. google might be the one as crazy as it sounds, that might be the flight to quality in the form of google given that they have their -- they have their hands in so many different businesses. they might sort of be insulated from this. so if google sells off precipitously on the back of this, i think there's your opportunity. >> let's get back to julia boorstin she has more from us from a memo that she's obtained.
julia. >> that's right. i have obtained a memo written by evan spiegel to snap's staff. it just went out moments ago as he's speaking right now at this jpmorgan conference. he's striking a little more optimistic note talking about the opportunities for the company in the long term he writes, quote, we believe that the progress we've made growing our revenue combined with the strength of our balance sheet has positioned us well for the current environment, saying that 2022 remains a significant investment year for snap, despite the ongoing volatility he says that they will slow their pace of hiring they do expect to hire more than 500 new team members between now and the end of the year. that's 10% head count growth and that's in addition to the 900 job offers that have already been accepted this year. so still hiring but at a slower pace he also said they will be evaluating it remainder of 2022 budgets to find cost savings so really notable to hear that kind of caution. though certainly a more optimistic tone that we got in
that ak filing with shares down 20%, melissa we'll listen in to what he has to say in that q & a session happening right now. >> julia, thank you. keep us posted karen. >> yeah, i thought that's really interesting that he would -- he doesn't have to. he's not under a duty to make this disclosure. so it's interesting to me. i don't know if others will feel like they have to now that he's done this. it doesn't bode well as a big google shareholder, not happy about it i think it's a little more closer to facebook than google google has a little different mix. to the extent that the apple privacy issues which snap seemed to be getting a handle on, maybe not as much, i think that would affect facebook more than it would affect google. but clearly directionally not great for either. >> the notion that snap is re-examining budgets, taking a hard look at budgets in, light of the slowdown and stock decline, taking a look at hiring, slowing the pace of
hiring at what point do these massive declines in tech valuations or in valuations in general catch up with how the companies are spending and hiring and the job picture, tim i feel like this is sort of just a little flash of what could happen cumulatively there are many companies like snap out there looking hard at their budgets than you can imagine what the outcome will be. >> i think we all know the labor market and unemployment numbers we're getting are lagging indicators if you look at continuing claims, they have been moving higher so it's exactly right i think all these help wanted signs that are out there are jobs that won't be there in nine months that's the dynamic that i think main street is doing better than wall street right now. we had years where it's the opposite i think it's the case where we're getting a precursor even though main street feels pretty darn good. >> stock is down almost 24% right now. let's bring in gene munster to get his take on this gene just a month ago they came out with earnings. this is pretty surprising.
>> it is, melissa. there are two things that are surprising me here one is the magnitude of the -- or just the fact that they're coming in line or below the range. that's always a disappointment but this is much more potent than the misses that we saw with walmart or target or cisco and the reason is, like you just said, is the speed of this change the deterioration over a month and i think that the traders today have appropriately framed in this idea that we really are looking off of old data. it seems like the environment is being -- is quite dynamic right now. i was trying to think back of when i remember environments this dynamic where a company reports and then guides down a month after. i would have to say it's probably the 2008 time frame even like the dotcom and i forget who was mentioning it too maybe it was dan talking about all the different spending cycle, it's almost like a
military spending complex. it's like the internet spending complex that's going on. i vividly remember that around the dotcom blowup, is that these companies feed off of each other and then when one slows it really has a domino effect i'm not an alarmist, i'm an opt miss -- optimist but we should be in code red going into the june earnings cycle because i think we'll hear more like what we're hearing from snap. >> so gene, without this phony bid from elon musk for twitter, twitter is probably going to guide down and probably has a two handle on it, right, probably in the 20s? this would be the most obvious one, right, as far as to extrapolate to >> exactly that's the number that i had was 25 there's a way to get there and we'll go through all of that math, but 25 i think if you put the risk/reward here, 70% chance elon ends up buying this for call it a 10% premium. there's a 30% chance that it's down call it 25%
just the risk/reward is in my view 2% negative, but that's exactly right. not only is there the advertising business that is likely slowing with twitter relative to what we saw with snap but there also is the damage internally. if you're an employee at twitter, you're not working right now, you're following twitter. i think that is going to have a consequence on the june quarter that's going to be much more outsized than what we're seeing from snap tonight. >> gene, which company in the space are you most concerned about based on what snap said? >> i think twitter, for those reasons. i think facebook as well more investors in facebook it's not what i wanted to see. i think that those two there's probably some element here where there's some defense around competitive it doesn't sound like in julia's comments that evan is outlining any sort of competition factor but that may play into this too. it doesn't miss the big picture
that most advertising based businesses, whether or not they do well or not, it doesn't even change the conversation because if they're at the same conference and say everything is fine, investors are going to say wait two months and we'll talk and see that business will dro deteriorate. so to answer your question, all the advertising companies will be under pressure probably until the september quarter. >> gene, it's tim. put some numbers around this for us because we all agree companies aren't worth today what they were yesterday, especially in tech if you look at the street, they're between 7 and 11 times on snap, on '23 revenues as an analyst, give me some context of what you're doing with that sales multiple, that revenue multiple, for a company that's not making money. what have you condone with it >> in the case of snap, we don't own snap in the case of facebook, we have a growth rate and expectation on our growth rate. i think that's the key, is just to factor in what are we doing we're thinking about 2023 and
thinking about what the growth rates are there. i'm more optimistic on '23 i think '22 will be a train wreck but '23 will show some baseline to answer your question, we're starting to build and insulate growth in 2023 we haven't fully swung to the downside, by the way i agree, dan also was mentioning the market needs to swing further to the downside. we haven't had that capitulation point. i think we may get it in the next few weeks at that point i think you can start owning these stocks in anticipation of what i think is going to be a rebound in 2023. >> gene, great to hear from you. thank you for your excellent analysis on this gene munster of loup ventures. it's how quickly the environment as changed we heard it to a degree from walmart, from target, that things change so quickly that it was difficult to adapt to the new environment and that's why a lot of things just got, for lack of a better word, messed up in terms of their quarters.
>> now you're starting to see it over and over again. i remember the last time i was on, i think, i said doug mcmillan of walmart is praying that target has a similar quarter as they did and then they're in the foxhole together. that wound up happening. now you're starting to see it from snap. so it's across a lot of different industries, a lot of different companies. one has to wonder, and i think to dan's earlier point, what does this all mean for the broader economy. i'm not an economist either. i can't say if we're in one or going to be in one in terms of a recession. i don't think that necessarily matters in terms of what we do what i'll say in terms of the broader market and we'll probably get into this with tony if he comes to see us, the market is a seller rally washmarket we can talk about the levels a little later. snap shares down 24.5% meantime, we are all over the after hours move in shares of zoom they are jumping after reporting results. the company's conference call is underway and we'll dig into the numbers next don't go anywhere, "fast money" is back in two
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sidelines unless you are very nimble tony dwyer, you say until the fed changes course or there's a policy change. what does that mean, until they're done tightening, until they say 100 points is on the table? what does it mean? >> mel, there's a huge difference between what a bottom is versus the bottom a bottom can come from what we're seeing, an extreme oversold condition with high pessimism, the perception that the fed may be discounted in the marketplace and you still have some okay economic data. that allows you for a rally after that initial whoosh that you get in a fed-driven, fear-based, precipitous decline. so as you know, mel, i think it's a lot like 1994, 2000, or even 2018 where you get the fed comes out much more aggressive than anybody expects and you just get this powerful thumping in the market and liquidity kind of disappears. not just in the market but just in the overall economy you get a bounce back. that bounce back comes from the
oversold condition, the perception that maybe it's gotten too extreme with the fed expectations and then you get what i'm going to call the fall fall, which is the economic reality of what happens when you withdraw so much money. >> so what does the bottom look like to you, tony? >> mel, it's got to be that the fed says we're almost done a kind of alan greenspan in 1994 where we've got one more hike in front of us when the economy almost got into recession. >> wait a second, that sounds like it's not for a long time, tony. >> i know, mel people are used to me being so bullish but it's been a little while. the reason is listen to what neal kashkari said based on rates going from 3.5% to 5.25, we are withdrawing accommodation faster than we did.
do you sell it down 30 as the team talked about, karen appropriately talked about jpmorgan is down 33% is that the time to sell it? so i think at this point you want to really see that tone change in the fed before you, quote unquote, have to do something. and if you remember, we ended the last show with my dad coming downstairs and saying to my brother and i don't just sit there, do something. you don't have to get in on the next downtick thinking its the low. >> tony, thanks for being on you said until the fed stops what do you think would make them stop? is it an actual rate is it inflation coming in? is it the economy coming apart what is it >> i think it's inflation expectations, karen. when you look at the conference board, ceo confidence survey that came out on the 18th, i don't think on a year over year basis it's ever as bad as it was. it's the real sense of a
recession level. if you look at the university of michigan consumer confidence survey, it's horrific so i think you're going to incorporate some of that into it. what kashkari said is really important. when you give trillions of dollars and everybody starts to spend like it's always going to be there and you take it away, there's some disruption. you only know how much in hindsight. that's when we use our tactical indicators to figure out if near term it's enough ultimately it's got to be inflation expectations once they start coming down, which by the way has happened to some degree. once they have come down in earnest and the fed believes they have gone far enough on the inflation data, then you're going to get that real turn. >> tony,great to see you thank you. tony dwyer yeah, there's been a rollover in inflation expectations there's another way to look at that it's good news but bad news too. >> i think in finished goods
we're seeing some plateauing i don't think we've seen it in energy and i think that's going to feed through and deadly for the consumer and i don't think we've seen it at all in labor and services, which is very, very sticky. we're going to get fed minutes this week. we're going to get some sense of where the fed is so wednesday is kind of a big day. the way we've been digesting every bit of the fed, we had the dollar that was over 1% weaker or 3% weaker from its highs. i think it's telling you a couple of things maybe the ecb is getting some religion it might tell you that some people think that the fed can't be as aggressive as they thought. but inflation is not going away quickly. >> yeah, and we've been talking about this as it relates to the market we've had the price come down. that really important part of the pe thing we haven't had the e come down the pe on the s&p 500 is below now the five and ten-year averages the problem is, is that the consensus estimates for 2022, and we've been talking about this for months, for 2022
earnings is still up 10% that's knottenot happening, oka? the earnings data we got last week until strategists and economists ratchet those numbers down or analysts following these sectors or individual names, then we'll still have the expectation of that and when you try to put in a bottom and we see strategists go to low single digits earnings growth and throw the ten-year average of 17 on that, you bottom out in the mid to 3000s in the s&p 500 i have no idea how virkscious t valley is going to be. but we do need to see strategists and analysts capitulate on earnings estimates. let's get to airbnb news here it is shutting down its business in china after six years deirdre bosa broke the story today and has all the details. >> i'm told that that china business was already costly and
complex to operate, so the pandemic worsened those issues, heightened that impact all listings will be taken off the platform this summer that's homes and experiences i'm told that airbnb wil maintain an office in beijing with hundreds of employees tough competition from chinese companies likely a factor. rivals operate within super apps so their cost of acquisition is much lower airbnb will refocus their efforts in china onto the outbound travel opportunities. that's chinese traveling abroad. china stays in mainland china have accounted for 1% of revenue over the last year but i'm told the overlap between the outbound and domestic businesses was not strong. now, this comes despite a strong play to succeed in china you might remember airbnb went into the country in 2016 with in country branding, even had a chinese name they put the airbnb co-founder
at the head of those efforts but like many american tech companies brefore it, airbnb is now retreating >> was it ever expected to be a growth engine, or was that never the case >> it's hard to say. i mean they have been through a lot in china there's social and political pressure to sort of exit, and i remember asking brian chesky what would it take to get you to leave. it's interesting looking back on those comments, he kind of said there was a moral responsibilities but there was a business responsibility as well. i'm told that this comes down to cost to spend that much money in a place like china for just 1% of global revenue is tough but there's always that promise. the number of millenials using home sharing in china is bigger than the population of america so there is always that drive and that desire for that kind of growth but domestic companies just have an edge up it's not a level playing field as airbnb found out the hard
way. >> deirdre bosa, thank you there's also the geopolitical aspect of operating in china today we heard president biden make a gaffe, saying that he would defend taiwan if china invaded taiwan the white house then backed away from that statement, tim how do you interpret that? that certainly complicates things potentially. >> yeah. >> it doesn't rub china well, that's for sure. >> i didn't like that. but i think you've got a case here where if you look at what companies are announcing over the last few weeks, think of all the companies that have cut their russia business. i mean these are not insignificant moments. obviously china, we talked about this, dan brings this up a lot the biggest tech companies in the world, which are our companies, don't have a lot of exposure other than apple. it's not like they're really allowed to play in china but this isn't good news we'll talk a little later in the show about china's relationship to deere china is doing everything they can to stimulate their economy goldman downgraded china to 4.3
gdp growth so the rest of the world is already suffering from china weakness but this kinds of stuff will continue. >> karen. >> remember brick? remember we used to talk about brick all the time >> yeah, the bricks. >> i'm wondering if we're dismantling the bricks, right? russia, i mean some parts of india and china. that was a huge, huge driver of multi nationals. so, you know, this is interesting to me. not in a good way, right >> we're building a wall, like pink floyd. >> yeah, starbucks and nike and those who have big exposure, not a good thing. >> tesla >> tesla and apple that's the epicenter of this if there's any provocation with taiwan, i think the precedent that's been set with russia is going to be a difficult one for apple, which obviously manufactures a great deal of their products there but they also are looking at that to be a huge growth market.
the other thing is nationalism so china actually has copied airbnb they copy catted all of our best things and they have them domestically so the point is apple is number five in market share as it relates to smartphones >> is it five now? >> i think it is i think there's a bunch of the locals, huawei, that are doing much better. so we could check that i think it's somewhere, it's not in the top three so i guess if you're going to get nationalistic based on some of the military kinds of ambitions that we might have to defend taiwan, those guys are toast. the other thing about tesla, tesla opened down because there was a report that share shanghai factory wasn't going to be open when they said it was going to be think about how easy it is for the chinese to regulate their business and that is a huge pillar for tesla. >> all of this is inflation. this is all about near shoring and onshoring and we're no longer reliant we're doing this with semiconductors and every sector.
globalization is dead. certainly this conversation on china isn't getting easier, it's getting more difficult. >> guy, your take? >> gaffe, no gaffe this is, again, just my opinion. this is something we talked about in the fall, concerns about obviously russia/ukraine came to fruition and this i happen to think gaffe/no gaffe, this opens the door for china to test the waters a little bit here. now, i think everybody said the correct thing. throw apple in there, throw mcdonald's in there as well and think about what it could potentially mean for our markets. i was surprised how well the market behaved despite these comments i think you'll hear more and more from this unfortunately over the next couple of weeks. >> there was not even a shrug in the markets today. good point there. coming up, we're watching zoom after hours that stock after its after hours highs. i'll bring you the dai wetlshen "fast money" returns we're having to get creative. find a new way. but birthdays still happen.
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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? welcome back to "fast money. let's get another look at snap evan spiegel saying in a memo to employees the company would slow the pace of hiring and re-examine its budget.
the stock falling back below its ipo price for the first time in two years. that price was $17 in 2017 shares of other social media and internet stocks also plunging in the after hours. he did specifically say it was the rate of change, how quickly things deteriorated that really caught snap flat-footed. meantime, we do have an earnings alert on zoom video. earnings beat the street the conference call is underway. frank holland joins us with the details. >> strong guidance the story here full eps outlook well above estimates. the top end almost a quarter more than what the street was expecting. this despite very recent fears of deceleration for zoom they cut the price target from 150 to 90 on friday. net dollar based expansion increased 123% that's growth and revenue from existing customers that number has been above 129% in every other quarter that zoom
has been a publicly traded company. current rpo up 25% that's billed and unbilled revenue the company expects to get in the next 12 months. enterprise customers increased by 24% if you're looking, it would be the growth in europe james fish saying the mantra if you haven't used zoom already, you probably won't is becoming an overhang for zoom tomorrow on "squawk box" zoom's cfo will join the team for a first on cnbc interview going over this quarter, the future of video conferencing and much more melissa, back over to you. >> all right, frank, thank you frank holland. obviously a pandemic darling we've had a recent surge as well and you've got to wonder if they're benefitting from that concern, guy >> listen, it's interesting. customers up 24% year over year. margins better, guided higher for the year all very good things and the stock has obviously been more
than cut in half from its overtime high. i would have thought incorrectly this stock would have been up 18 to 20% on the back of this quarter. that's concerning because quite frankly valuation is almost reasonable at these levels so if zoom can't rally on this quarter, and this might go back to what we talked about with tesla a couple of weeks ago, if it can't rally in this quarter it's really bad in terms of where the stock can go watch it really closely tomorrow, mel. >> we should note in the after hours session, zoom was much sharp -- much more -- much higher than it is right now and then the snap news hit and that knocked it down i guess in the category of higher valuation names. there's a question mark over a lot of them, dan. >> it's tough. the headline stuff didn't look that interesting to me guy did mention that 24% customer growth. it's never going to get back to -- probably to guy's point that's as good as it gets off the deceleration off of the last few quarters or so i think the stock probably would
have sold off even if the snap news exadidn't come out. guy's point about valuation, i think it makes sense this company when it went public was already profitable it's profitable but just not that profitable. in some metrics it's still kind of expensive i can see the stock down tomorrow on the opening. >> i don't think anybody knows what to pay for it i know that sounds obvious but most analysts put a dcf on it. for folks that don't understand what that means, it's complicated. so there's a lot of moving targets. there's a lot of assumptions in there. you can come up with almost any number you want. yeah, the street has them making $5.50 a share this year. it's under 20 if you believe that but we all think a lot will change a lot of bad news has been priced in here. coming up, a lot of retail names set to report. which names are worth a try-on first, open house options. home builders hit asmortgage
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money. check out the home builders. one of these names is on deck to report earnings after the bell tomorrow and the options market is expecting a major move when the results cross. mike khouw has the action. mike >> so we're taking a look at toll brothers. they traded about two and a half times the average daily call volume right now the options market is implying a move of about 7.5% after they report earnings that's considerably higher than the 4% that the company has averaged over the last eight quarters the most active contracts were the july 50 calls. we saw 535 of those trading for 2.25 apiece. so it does seem that there are some options traders who are betting that the stock could recover at least to those levels that we last saw in march. still, 2800 calls, which is all that traded today, is relatively small relative to the 1.7 million shares of the stock that traded so there might be some that are hopeful but that would leave the stock well below where it started the year. >> for more options action, tune in friday at 5:30 p.m. eastern
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we're gearing up for another big week of retail earnings. best buy, macy's, dollar general, costco, many more on deck with the xrt etf sinking 16% in the last month alone. so which ones do we watch? in light of what snap said about the rapid deterioration just in the past month, karen, it really puts another light on these earnings. >> yes, it does. already on just a terrible quarter so far to me the one that's interesting is ulta which i do own we saw some good sephora numbers and some good, i think, target did talk about ulta being good despite the rest of target being difficult. so this is one that i'm hopeful. it's not super cheap but at a market multiple so that's one i'm holding onto i think it's the 26th. >> so the things i heard in walmart and target that got me more concerned, the company i thought of right away was best buy actually not other discretionary places,
but general merchandise. and i think the pull forward for best buy is really tough it's never been an issue of valuation. i think about macy's and think about they're going to grow 15%. i think their gross margins will be just south of 40% this is a company that does not have balance sheet issues anymore. this is a company that i think has a lot more risk/reward to the upside and i think at four and a half times based upon the street, it's somewhere like 4.5 a share. it's not a balance sheet question anymore and i'm sure there's headwinds, but the consumer they have right now is fine. >> well, macy's, for instance, guy, they're selling stuff -- and best buy, for that matter, they're selling stuff that was hard to sell at a place like a target and a walmart >> which i mean doesn't -- >> it's the consumer, though >> and then i look at a dollar gen. a couple of months ago down 26% in a month is a lot. now you see stocks move 26% in
an hour and a half but dollar gen into thursday's earnings, down 26% from the all-time high. trading at 15 times next year's numbers. you have to say is that enough given what we've seen, i think wait and see is the best course of action, i think, in these names. >> all right up next, final trades. hey businesses! you all deserve something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪
one more check on snap after the company warned about its q2 results. the stock is down 30.5%. that's a wipeout of $11 billion in market cap. by the way, meta platforms is down more than 9% in the after hours session and it's also taking a hit on apple, down 1.5% and the qs are also under pressure after this news in the after hours session. time for the final trade around the horn we go. guy. >> given everything you just said gold should catch a bid gold. >> tim. >> energy. if you think about what's going on in resources, this is the time to buy on pullback and energy transfer partners, nine% dividend yield nice place to be. >> karen. >> with the snap news, pinterest
is not the place to be short pinterest. >> interesting dan. >> i just say elon musk on friday tweeted there will be blood. there's blood on his hands as relates to twitter they're next in line here so i'd be a seller of that. >> thank you for watching "fast money. stay tuned for a cnbc ♪ welcome to our cnbc special "inflation and your stocks." i'm becky quick. jim cramer is off tonight. inflation at the highest levels in over 40 years has been a big drag in the markets with the dow being down eight weeks in a row. it hasn't done that since all