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tv   Fast Money  CNBC  June 24, 2022 5:00pm-5:30pm EDT

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california toward the east coast and take market share from the department stores. the stock is really beat up. almost cut in half this year and i also think that wins the double over the next three years. >> >> a double over the next three years. lauren hill. thank you very much. it is bath and body works. resolve and bright horizons. thank you very much for joining us here on the show. big week to close things out massive moves in the market higher we'll see if those things stick. "fast money" picks up the coverage coming up next. right now on "fast," a strong end to a strong week. markets closing out a rare upweek with the nasdaq and s&p rising more than 3% today. big gains in discretionary health care and real estate this week what charts caught our traders eyes plus chip stocks stage aig rebound. they are on pace for the worst quarter since the financial crisis there is more pain to come or is it time to jump in and later, just do it. nike earnings on monday. when the traders are watching
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this i'll melissa lee on the deck tonight, tim, steve, guy and pete najarian. we start off with the big winning week for the marjt markets. the first positive week of june in a big way everyone up 5% or more the nasdaq posting the best week since march. the s&p seeing the best day since may 2020 the big drive higher coming as we gear up for the final week for the first half of the year but all of the moves got us thinking, the chart tells us the true story so we asked the trader what the most important chart of the week is tim? we start off with you. >> a paicture does tell a thousand words and if we could get the university of michigan chart, the two charts when you think about sentiment this week, we had a dynamic, we got the save aii bull bear survey and what this bar chart shows is that we had numbers that came out really, it the weekending
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june 22 which are the fourth worst print since 1999 sentiment is to bad we were due for a bounce and we're going into quarter end and there are dynamics that are a bit of a relief but being over sold in terms of sentiment again i'm going back to march of '09 was that worst print. we've only had three other prints as poor as this one one was back in april. that is the chart of the week. which is that we've digested how much 'priced in recession, i don't know that we've priced in anything from a consumer credit hit this ch might come after recession. but for now and for the positioning of the market going into quarter end, into next week and for oversold conditions, this chart tells me that the market has some room to run. >> so basically, pete, so bad is good a contrarian indicator you buy into that? do you think -- it is interesting because the "overtime," the show that precedes "fast money," had a poll of viewers, do you think
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the bottom is in for the market. 70 something perrent said no, n-o. >> and i think what is the opinion right now in folks of all of the pullback over the last call it six, eight, ten trading days where you look at the price forrin instance of ce 117 back at $107 and nat gas was 6 1/2 and it pulled back across the board -- or 7 1/2 back toward 6. a lot of pull back talking about inflation and all of that of course. so i think that there is a lot to be said for it. i don't know that we've necessarily gotten through the end of it though i'm not a bear as you know generally i'm very bullish but i've been a very cautious bull as of late and i think that we've had some nice moves to the upside i think tim points out something very nice in terms of what to look for and i think there are either things to look for in this market to look to whether this market is going higher or
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if we'll see a big pullback. >> guy, why are you watching hyg. >> it is been credit for me. that is the one thing i've watched and we were talking about it in the fall the hyg doesn't necessarily trade but when it does it is the precursor of something if you look over the last couple of months, it is a drop down to 72 and change. back in may we had a bounce up to 80. we seem to have found a bottom i think on june 16th and that is bouncing here. so as people start to get a little less concerned about credit, i think the market is going to continue to have legs here now i don't think it is over either but i go back to june 15th which was the fed day and an though show that night we talked about the potential for a 9% or 10% rally and the next day the market sold off on the back of the swiss national bank headline they raised rates 50 basis points but i still think 4100 is in the cards and the market will
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continue to do earnings until july. >> so this is proof or evidence that we could be in for a temporary bounce, steve, do agree with that. >> i'm going to agree with that thesis and mine is on gasoline. it peaked june 6th it is in 10% from that date. so pete and tim talked about it and guy touched on it. wti crude peaked wheat, lumber continues to collapse. this meanstwo things the economy is not doing so great. there is a slowdown. but there is the fed getting some room. to not be as hawkish get some room to get his foot off the brake. i don't think that is gooding to happen but i do think cpi will come in light in july. >> i think that's a great call i think part of the momentum in the week to give us part of this thrust we were getting lower commodity reads and getting lower in copper and energy was
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destroyed this week and if you look at that university of michigan, we got the second reading and the five to ten year inflation came down and there is rumors that powell is looking at this number and this got him excited. >> pete, what is your chart? >> well the chart i like is the ten-year i've been working on that for a while now. for the last couple of weeks when you look at where it is it got above 3% and you see a lot of selling going on and we got all the way up to 3.5% the seller were aggressive within the marks but then this quick unbelievable reversal off that 3.5 level back down towards 3. i think that was very critical and by seeing that you could see suddenly the buyers were all coming back and they came back in a hurry and a matter of fact you have to see the dow up and the nasdaq up a thousand points all in a very short span so keeping np eye on the ten year and the two-year, i think those will give you a good directive of the direction of the markets them sfz over the
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next couple of days. >> guy, i'll going to you on this, because i was kind of surprised myself that the markets rally this hard and we didn't see yields move as much i was surprised how stable they were >> yeah, for a change. at least for a couple of days that we've seem to have found some level that the market is comfortable with i'm with meet on this one. there is no question that ten year yields moving 45 basis points definitely i guess assuaged some of the concerns for the high valuation tech names that seemingly like lower yields but that is going to be a problem again. i don't think it is a problem over the next couple of weeks. i think we're in the eye of the storm now where the market could sort of figure things out and do the grind higher, that frustrated a lot of people and we've seen it before so i would submit 4100 may have been over shoot to 4200 for the next leg lower at the end of july. >> i'm glad he didn't refer to the eye of the tiger i thought he was going there
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but if you think about mega cap tech and what would lead the market in terms of the weightings and what are the heaviest component of the indices. this is an environment that is very strong for them part of the read this week was recessionary dynamics. the ism, the manufacturing numbers and the numbers saying we're getting closer and closer to a lower growth environment. with lower yields, this is the environment where mega cap tech has worked so many times and i'm not ready to say my 125 call on the apple and it is not about that i want to see that demand warning from apple before you feel like it is the time to get back in the pool here. but this is a environment this week. >> the money came out of energy and went into tech and i think that is the biggest takeaway you start to see energy which is the only thing that is performing well or positive for the year but if you start to see in july, where that cpi comes in, the market runs up to guy's number, 41, 42, then what happened
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earnings and margins are a question maybe right back down again to the levels that we all talked about because that will suck everyone right back in energy will implode and tech will rally and margins will be excused on earnings. >> pete, do you think that the rally we saw in tech this week, is it a survivor if yields go higher? >> nice job, by the way. >> it is the only trivia i could possibly offer don't ask me why pete >> yeah. well, i mel, i think tim is right about keeping an eye on technology because it does seem to trade very much, very interesting relationship with what we're seeing going on obviously with the ten-year and so will it be able to break through and continue this move to the upside? that we're starting to see we're really just starting to see that it is not like we've had an unbelievable move to the upside. although i will say today, we have six sectors by the end of the day that actually closed up more than 3.5% so it gives you an idea of how
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broad this was as well so it wasn't just technology or energy or just financials or materials, it was the broad participation to the upside and i think that is something that stuck out for me for sure in terms of closing out the week after seeing what has been going on all week long really impressive week, i think. >> well stocks may be up this week but the broad commodity complex has been under some pressure chart master sounded the alarm on this space almost two weeks ago. he's standing by with an update on that call carter worth of worth charting joins us here on set at the telestrator. >> let's jump right in what we know is that essential sometimes a security, annin -- an index will basically this is the war. so this is an etf that captures a broad basket of commodities and in very quick order essentially we know that wheat almost doubled, nickel almost doubled. oil went up 40% and we've never
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really been able to exceed that high so let's get rid of all of these lines. and what you could clearly see here is that we have started to break trend. so we have a double top. and we've also broken trend. so let's put those lines in officially if you see the next chart here, what we've got is exactly that right. so the pricing, the blow off, we could never make the new high and now we're starting to break down another way to draw the lines would be like this and it is a failed ascending triangle. not good and you drew in so muchure offia, it is going to break out and it did the exact opposite thing. so the question is there more down side. how to figure out but the next chart might help so it is the final chart i have here this is our miner formation. this is where we've broken trend. this is our double top but if you take all of that away and just ask the question, are we going to head towards the
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lower band we've been almost beautifully perfectly inside of this 45 degrees channel like a pin ball machine. when you blow out through the top you get an equal and opposite reaction which means in principle, not only should we get to the midpoint but to the lower band or even through it. i would not be in this etf and would you be underweight commodities relative to equities. >> what is that line what level of is that line carter >> what does that represent in terms of percentage? >> would be another 6% to 8% to hear. >> we'll see you in a bit on "options action. guy are you with carter on this. does that mean what the fed is doing is working >> well, i'm not going to give them any credit for anything so no. >> i asked because -- >> carter has been spot on he really called it well i don't think -- i'll say this, i understand what people are look at. if you think growth is slowing by definition almost, these commodities will start to sell off.
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i don't think the energy move is over by any stretch. i think it is taking a pause and if you want proof positive but warren buffett continues to pile into some of the names which is interesting. so although it is obviously taken a backseat over the last couple of weeks i think think there are a couple of chanters left in this story. >> this does fit for the narrative that for the short-term we'll be in for a bounce and the technology could move higher and wee continue to see the pressure on the commodity complex. and it all fits into the same thinking. >> does the barrel per oil fit into by year end think we're getting back into 90. >> oh, your backing off your forecast. >> no i'm trying to make it more palatable. i think we could get to 90 and i think most people are saying 80, 85. i'm going to stick with it because i think that is the biggest contrarian review of i'll right now, and i respect that and to the extent it goes back to carter's etf chart, where
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again the euphoria that came on the invasion, remember, $85 oil is where we were even before russia was in this position. maybe they were jaw boning over the summer, but the dynamic around oil and that is everything that we're hearing. we haven't built a refinery in this country in a long time. so i think don't it will solve overnight and i think the chinese economy back on line is a good deal. so this is a good place to trade the oil stocks but i would stay on the the long side. >> and semis seeing the biggest drop in almost 14 years vx they found a bottom and later on, china's big tech come back, the k web on pace for the best month in two years and the chart master is thinking it going higher "fast money" is back in two. literally right before this. (vo) now everyone can get a new iphone 13 on us on america's most reliable 5g network. for every customer. current, new, everyone. to show the love.
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welcome back to "fast money. semiconductor stocks higher in today's trade but it has been a long quarter for the sector. check out some of the losses from nvidia, marvel and sky works and the likes. the estimate is on pace for the worst quarter since 2008 pete, what do you think of the names? >> you know, i think some of the
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them just got so cheap, mel. and i think the algorithm are part of the buying as i've been talking about the ten-year, every time we watch the movement as it pulls back, suddenly the buyers come back in, right. and they come into tule and the semiconductors and the other sectors that had not really been performing very well at all. semiconductors absolutely were not. but we're seeing a pretty nice rise in a short period of time i think that is partially the alg algorithm and folks sitting back these are gotten cheap, whether nvidia or amd or qualcomm, they've gotten so inexpensive, people are willing to put money to work there i think that is part of it as well i think they're looking long-term. it doesn't mean they don't get a push to the downside but i think that will get predicated on what we're seeing in the twos and the tens. >> and the semis continue to get some life here and remember this is the most
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chart for the market we did our charts in the first black of the show where this would have been the chart two months ago before we see the downturn so the break down to 220 on the smh, the outperformance is nice to see because you should be seeing 100 basis points or more in outperformance in semis i think names like nvidia are names they want to own and i think the defensive semis, i would go with taiwan semi or the chip value plays within chip. >> i'm still negative semiconductor. they're a commodity other than the ones we just talked about so i think the path is lower for them. >> especially if you think we're going into a recession >> dah dah dah if you do look at this, though, what do the companies do we had a drought of chips. now we're going into a flood of chips. because everyone over ordered. so there is going to be a massive pull forward once that supply chain unleashes
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i think it is negative for the space. >> guy, how do you think about that thesis that we go from a drought to a flood or could the semiconductor companies actually dial back and on what they make because right now they can't make enough. i mean, i don't really understand unless everything is on auto pilot, i don't understand how we go to a flood. >> i think steve has been bringing that up for a while now and he's been spot on in terms of way the stocks have traded. i won't disagree i think people could have double ordered and that's problematic at the back half of this year. i look at it as a training opportunity here and i think there is we talked about qualcomm specifically last night. the company now trading around 10 times next year's numbers with decent eps growth and at levels that we bottom out at if you look in october of last year and in march of last year. this 122 or so level so i think qualcomm right now just giving you an opportunity to be long a stock into their earnings season into july sets up really well post earnings, we'll have another conversation
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but i think the glide path from here is higher. >> even if they didn't double order and the demand goes down with chips ordered at these levels then there could be a supply glutton chips you don't need the notion of double order. >> and why don't you throw in the little caveat of china coming back online just that for the supply chain is going to be a massive, massive amount of calculations >> and shouldn't there be some demand we have numbers out of the auto sector, greatly impacted by semi shortages is getting prices, the prices for cars indicate there is still demand for the cars that need those chips that haven't gotten there yet so i hear you. we've heard from walmart and target, why shouldn't the chip companies be in the exact same spot but i don't think yet. >> we're counting down earnings from nike and insights into china. we'll break down the numbers and throughout june we're celebrating pride month.
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a huge line up next week with the as pen ideas. we'll hear from jessica alba, and eric schmidt and wells fargo and bumble and much more coverage starts on monday. well nike stock jumping 4.5% today and many on wall street forecasting a hit due to china lockdowns and a slow down in consumer demand. it is down 32% this year time tim owns nike. >> i think we've priced in a lot of china and some impact on gross margin i care really more about north america and some of the comps which i've continued to be strong the gross margins are around the dtc business continue to support the stock but more importantly this is once a stock trading about 36, 37 times and now trading around 26 1/2 times forward. this is one of the great companies. this is one of the stocks folks that you have to pick your level. around 115-ish is a level that
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goes back to kind of a month after the covid lows so. i think you have a chance to own this based upon the reference points but on valuation. >> think you could own it here. >> guy, i hear exactly what tim is saying. it is cheap relative where it is historically still think it is expensive. i would wait for them to report and i think operating margins will be under significant pressure i think there is another leg lower in the name. >> it is time now for a friday final trade. let's go around the horn pete najarian, what do you say >> i'm going to kick it off with charge point i love this name i saw a lot of activity just today. i think it is going higher >> guy adami. >> earlier this week, karen flagged merck and look at it today. bristol-myers breaking out dmy. >> and tim, some of the things that we're talked about this week were lower gas price and things that are helping that
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walmart consumer this is a stock not with a much of a bounce and over done. and i think you've priced in a lot of bad news here, walmart. >> and another one over done xpi, a small cap biotech index is down 32% year-to-date and up 12% this month it has much more room to the upside. >> that does it for us here on "fast money. see you next week. don't go anywhere. option action is up next (mom allen) verizon just gave us all a brand new iphone 13. (dad allen) we've been customers for years. (dad brown) we got iphone 13s, too. switched two minutes ago, literally right before this. (vo) now everyone can get a new iphone 13 on us on america's most reliable 5g network. for every customer. current, new, everyone. to show the love.
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tonight on options action, the s&p surging so could you ride the rally into the last week of the quarter. plus a big tom come back if china. the etf that tracks mainland up 16% in the last month. is now the time tobet on beijing. and later we're taking your tweets as we wrap up the options market welcome to "options action," i'm melissa lee.


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