tv Fast Money CNBC July 15, 2022 5:00pm-5:30pm EDT
they once did but not like a falling completely apart story. >> not yet. we have to get there a couple weeks to see what the third quarter and fourth quarter forecasts look like. investors should be looking at the next two or three quarters for direction. so far, you've dodged a bullet. >> he will be back next week as well i. have a great weekend. right now, city pushing the banks higher in united healthcare. and netflix the best performer on the nasdaq. your set for the heart of the earnings season. plus what is old is new. big blue making a big comeback is ibm outpacing. one of the traders insists it's the best of the tag.
and a hot and tasty charter. up nearly 14% since monday and can you still post a profit trading? this assessed money live from the nasdaq. can see more and he is not quite on the desk but is here in spirit, steve grasso. we start with a solid rally in an otherwise rough week with the major markets climbing more than 1% and the dow more than two. retail sales and sentiment coming in better than expected. what a difference a day makes. citigroup searching 13%, the best day since march 2020.
i still see that is $4.90. after posting a profit estimate that the j.p. morgan. to close more than 4% higher and the action comes as were ready for another big week for earnings. netflix, tesla and united some of the names getting ready to report. yesterday the rally or did we just see a short-term bounce. would anyone characterize this as coming out of nowhere? >> welcome, good to have you. it's great to have you and if you think about what we got this week in the market, we got the worst of the inflation. we think this is probably peak inflation and if you look at gas prices, they continue to make new lows and if you look at the market overall, you have this rally in the quarter end and then you rallied a little bit into july and we have been sideways and from the june 17
letter we are making higher lows. i'm not saying it's time to do cartwheels but i'm saying i will continue to point at semiconductors and those parts of the market that we actually do need to see a bottom end before we get to the bottom of the market. semis have outperformed the s&p. banks and leadership, i don't know that we are going to say that yet but i think today was a relief and it was almost a vindication for all those people that say thanks are better in this environment and higher rates are good for banks. >> do i get a yellow flag if i talk macro week >> absolutely. >> we want demand to come down but why would a strong retail sales number be a positive and why would that be taken as a positive and why does a strong jobs market be taken as a positive? >> you've got economic data
that was in terrible but then some comments from federal reserve and it may have left a little pressure off the market. when you look at leadership today it was energy, materials, industrial with a lot of parts of the market that you think would rally on good economic data and the curveball flat with the tenure down and i think that's telling you something. if you dig into the retail sales number, the real retail serials sales continues to rollover while the headline inflation or headline retail sales goes up and that is not necessarily a good thing for the market and i think a lot of cases that's why we have an earnings problem. the economy is not where it needs to be and companies are keeping prices higher to help mass the unit demand which i think we are singing. carmax, the big year-over-year
revenue print with second quarter in a row of sales coming down on the unit basis and that's what you see and that is what will eventually flow and earnings and that's why keep talking about this rotation. >> in your world can you imagine 3.6% unemployment rate? what should i do? make a combo? >> the volatility is coming. to the point and i wanted to pick it up and kind of run with it. you have the robustness in the job market and that's why you saw some positivity. you are like people stopped and paused, what does it mean for the feds because that is the overarching theme. we are in earnings season and i don't think that's what's driving things. the same earnings that led to j.p. morgan being down yesterday are the same earnings that lead to being a 4% this day quick that tells me the macro pictures what's in play.
you had the retail reading but on a real basis or unit basis, it is still the climbing and if you put the futures and see the move away from the one point hike that was pretty much baked in, 80% probability, that's down to one third. i think it is that move and speak to the volatility and that is what led to us having the action we had today and for that reason is the reason why i'm not ready to buy into it. >> i will push back a little bit and i think the bank members today and j.p. morgan can say things different by the way congratulations to citibank up 16% and back to june levels. this was important and i think the relative outperformance what i hear from j.p. morgan and citibank and what i hear from banks is they told us loan activity is up in credit card activity is up. the credit card npl related credit were better.
and the interest rate being higher is great for banks. we did not hear anything from the banks and the banks have been pushed around and they always get pushed around during these periods. it doesn't give you an all clear citibank told you in a better term the j.p. morgan that their commercial loan business is very strong in the credit card business is strong. it's not like people don't have jobs. i don't think markets -- >> world quick. could this be the ultimate bottom that we've already seen that never got about 33? is a possible that this is different where you don't have the final? >> we are in a period of heightened volatility and it's all led by the rate market. think about the moves we have seen. 15 basis point move on a 3%
base and that is volatility and it's only a matter of time before you start to see that. >> that's my guess. >> we tried multiple compression with pricing intercession and we haven't really gotten into the downgrade cycle. a couple major strategist have downgraded the market on a lowering of eps which is what i think you have to do. with the mega cap tech pulled forward a lot of demand is seamless demand. >> eli lilly, if at an all-time high today, the best performer on the dow. the sector in the green for the year is sticking with his bullish call on health care and it's kind of cool because i saw you earlier this week and so far so good. you made a good
call on bit coin. but you were on. >> we all got our dads and let one of these were sectors and i think that's a desirable characteristic. three charts in a row and their relative charts. it's one thing relative to another and if the healthcare sector relative to the s&p and you can see since 1989 we have come down and have bounced to the penny to the penny and we did it again. we could put in some arrows to annotate that. stick with it. and we look at relative a different way and the next one is a two panel, what we have is this is the section of the
beginning of the year and almost everything is down including healthcare but what is it really doing? it's going straight up relative to the s&p. two more charts and as depicted by the etf and it's very well- formed and i think you catch this for a pop as drawn and finally the biggest waiting in the entire sector, unh to the penny to the penny to the penny to the penny. it's a beautiful 45 degree angle and i think you just take your m arrow and extended. >> my mind is mush. >> it was melissa when you made some of those points. and grasso is here.
i actually forgot about you. >> whatever's on your mind, i want to know. >> i felt like i was watching the show. i didn't want to jump in. >> is a friday? >> there's on deck, stay tuned. >> i will just give you a little bit of a drop-down. we start off work harder left off i think you're starting to see safer than the overall market. you have lily, biogen is up in a different sector and that is up 10% for the month.
merck up for the month. moderna, that's one that's highly volatile and is up 30% for the last month. i think you see people rotate out of where they got crushed. moving into where they think the puck is going and i think you have a window of opportunity to where tim started off saying, i do believe inflation is peak and i believe you have a window of opportunity to market rally and make of august and not get to make cute. we wind up making new lows after august. >> that matches with some of the technicians we've had on a and maybe a renewed back and that horrible month we have seen in the past where we saw so many bottoms in the past. i guess -- is there any hope that doesn't happen for the ultimate lows are in and would
that be the first time it's ever happened? oil is down how much? if inflation rolls over and the labor picture eases and there's no way that there could be clear sailing? >> i think it can be clear sailing and not political but i think both parties want to see sort of a regime change. the midterm elections have the ability to be the catalyst to a rally that pushes us into the year and i do think you will see oil. oil will be around $65 a barrel. by year end. i saw that when oil was at $120. i feel like we are climaxed on the economy but i don't think we will skip the last putsch push. >> three year inflation expectations have dropped and
the consumption headwinds have alleviated it. sentiment printed on the aai and you name it about one month ago was the fourth on record. sentiment as we know positioning as we know has been extremely light and it's not as if there have not been a lot of folks that actually have been well-positioned. if you think of where the market is his positioning is so light that if you start to get some terms and until the fed has told us it's at least time to pause and they may not be as clear as they used to be, those are really the moments that we can start putting bottom talk in. we still have not heard from companies and there's very little incentive for companies to tell you how great their businesses. >> up next, is there a poster child for old tech? ibm predates ti and just about
with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. welcome back to fast money. the first full week of earnings starts next week. airlines, and ibm reports monday after the bell and for the first time in quite a while, the company comes into early earnings as a leader not a leg or. up 4% this year compared to the s&p which is 19% lower.
you like ibm? >> it's interesting and not only is it up 4% but on a relative basis outperformed by 17%. a really good place to hide and collect the dividend. it's early days but i think you could be in the midst of a legit turnaround. they are growing and have more cash to actually invest in the growth and a fair bit of the businesses recurring revenue and that's what you want in the market. that's really important and i did not say it was the best in tech that our friend christopher roan published it and i tend to agree it's making higher lows since the bottom and you look at the 140 level bumping up against it and if you push above it it would be positive for the stock and it's a reasonable place to hide because i'm still not feeling that great about the market >> ibm is giving investors a free cash flow story and for ibm were talking about relative performance and not just to the
market that to some of the big tech. we are talking about 35 billion in free cash between 22 and 24 and if you think about that, some trends with the software business are starting to catch some traction. let's not get to carried away. i think this is defensive and they have shown a difference. but the numbers are pretty decent. >> who gets credit for this? does it put us into position where it's working? >> they got smaller to focus on growth. >> every time they be earnings it was buyback. is this really changed? >> you could make the argument that it's becoming relevant again and i think it still is show me story but for now doing
things that can legitimize the growth prospect and for me defense and i think you continue to outperform especially relative to a lot of other corners of the market. >> that means everything. i think all those things definitely play in the picture but if we were up and to the right and futures were back where they were like going into 2021, the situation would be different and we would be talking about its underperforming and maybe some of the things that you just mentioned would be highlighted. right now and steve said it earlier, the rotation and making sure. and where you feel that you can be safe so really it's about not losing nearly as much and this is the relative value and indexing and it should be such a core component.
>> is it like bomber? what happened. >> i just think when you look at the stock, he and i were on the same page and when you look at ibm if you could drop back to 2013, the chart is terrible and ibm has broken more heart than you did in high school. this is an environment where people are buying this because of the yield and the environment. >> i don't even know what you're talking about. >> it wasn't so great for me in high school. college wasn't so great either. coming up -- >> making up for lost time. >> firing up the chart of the week with the burger rallying
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i am peter akwaboah and we are morgan stanley. there's something out here. - nope. - nope. nope. nah. no. nope. - hell no. - no. welcome back. time to revealed the chart of the week. shake shack surging nearly 14% since monday. is the burger chain poised for a comeback? >> steve, you're here? is a poised for a comeback? >> it's been in a declining
trend since february 2021. when you look at the chart, i would rather miss this for the next four are five points until it breaks out of the declining trend. let's just say $50 or higher, keeping the $50 as a floor. it's an expansion store and digital store and a drive- through story. when you really look at it, it outperforms all the others but when you look at it, mcdonald's, if you think were going into a recession, people are going to pay for value meals and mcdonald's, you pay a premium for shake shack >> we will have to go to the final trading. >> final trade. >> to much love. i love biotech and small-cap biotech breaking out. >> finally figured out your here and now we are leaving >> we love to have you here on
a friday. and we love united healthcare. everything about the stock is the reason they up there full- year guidance. the cash flow and dynamics are strong in the chart is in a good spot >> don't forget the narrative of china. resist the urge to jump in >> i think the less risky on biotech, good management team to navigate. recurring revenues, really important. yi gdb'mnot believe that i sangooye to you guys. >> you could be back next week. >> all of this for fast money. don't go anywhere. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq,
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right now on options action, big friday rally helps the major indices salvage most of what was looking like a pad week after a solid one last week. meanwhile the daughter were -- dollars starting on outwards projector he. and heading into the heart of earnings season, find out why it's time to make a play on healthcare. the healthcare heavyweights on the long side.