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tv   Fast Money  CNBC  September 21, 2022 5:00pm-6:00pm EDT

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like 2008. >> it's hard to come out of these news conferences with a ton of confidence that they are going to orchestrate the soft landing that people hope for because they give no -- they can want -- can't see that far in front. that's mike santoli with his last word. "fast money" begins right now. >> right now on fast, the fed hits the market with a 75 basis point rate hike and tells investors to prepare for another hike before the end of the year. chair powell saying the fed can't take its foot off the gas until inflation is under control and if that causes the economy to tumble into a recession, well, that's the price we'll have to pay. the s&p finishing down 1.7%. big losers, all those travel and leisure names. nasdaq dropping almost 1.8%. meta, apple, tesla all turning negative and the dow falling
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more than 520 point. it was higher by 315 treasuries, also whip saw action take a look at the moves in the two-year ending the day above 4% then there's the dollar. hitting a 20-year high what day welcome to "fast money," everybody. tonight, everything you need to know about the fed decisions and the ripping effects it will have on the markets and your money. what do we make of it, tim >> it was a fed we didn't know how to interpret where we were left and we were all over the place in terms of the market the clear take away, we added a point to where we're going to be on futures between now and year end. we added another 25 basis points to at least after the next meeting or after this meeting and bottom line here is this is a fed that wants to get to restrictive faster than we thought. stay there longer than we thought before today and if anything, one of the d
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dynamics was rates that may be positive at some point that's something that should scare people >> you're trying to trade through today during the day >> not pretty. >> and we were talking about the whip saw action. that was not easy to deal with >> it worked out okay. i will tell you, i've been focused on the nasdaq 100. the fact we saw microsoft and google really break down to new 52-week lows here and down about 18.5% from their mid august high versus the s&p and nasdaq which are down less, that to me is very troubling i was trying to trade some other things as it relaetes to rates i think the dollar's about to pullback, too. i think that's a function of growth that we are likely to be in recession in the not so distant future i just think of amazon and apple. these are $4 trillion of market cap still 20% above their 52-week lows i said last night, we're going
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back to those 52-week lows and when these megacap names join the party, that's when we get there. >> the question in this environment is are these market giants, the biggest weights in the market, but the biggest weights in the market, in this market environment, rates going higher, is that quote unquote, defensive, which had been the belief before? >> used to be defensive. it's not anymore i don't think it can go lower with the fed with it foot on the gas. so if that doesn't go lower, then energy goes lower >> the trade, too, versus other currencies >> exactly so i think that it's almost uninvestable if you were questioning do we hit june lows? we're going for june lows. the question is how low? >> i'm thinking 3300 fed 2020 >> 3300 >> we're just traders.
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there's people that are putting lowe lower gauge on where they think this market can do let's talk about where we're starting 33 >> karen >> i'm kind of perplexed by how the market reacts to what powell says we were talking about the show, just the hint of anything dovish, we had the big rally then turned around sounded like higher for longer and recession be damned was what i took from it that made for a 750 point swing? it's sort of amazing to me because what did we expect going in 75 basis points seemed to be the overwhelming highest likelihood event. that's what happened i think the hawkish tone was not surprising right? now tim touched on some of the other things that were more hawkish, but it's interesting to me that the market seemed to be defensive and not taking a lot of sides going into this and yet we had a 750-point move
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intrahour maybe. that's kind of amazing to me i step back, i don't think things have changed all that much right? we knew it would be 75 we don't know what the next one will be. and so i don't really know what's different but the market has moved a lot. >> don't people -- don't people, don't all of us want up markets? i think in general, bears make money in a very narrow window in the market everyone makes money when the market goes up so we're all trying to be polly annaish about when is he going to cut rates and that doesn't seem to be the case now. that's the reason why people keep holding on to any little iota of dovishness because we want to see apple go to 200. >> i think there's a lot of people out there that when i look at positioning, yes, people want markets to go higher unless you're a short seller. the volatility, we've had nine plus or minus of 8% moves in the year at some level, they've been at
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very key and clear levels. i just think that the positioning and defensiveness in the market is a function of a lot of people. not seeing a major pullback in demand we can talk all we want about what the fed is doing and one of the questions that was addressed to the fed today is are you going to wait and see the impact of your fed hikes and i said this last night talking about 300 basis point of hiking in seven months we've never done that before at least until you go back to the mid 1980s when rates were at 12%. not zero so the percentage change off of this >> prior to 2020, this black swan pandemic recession that we had. the prior two recessions you know, we had bear markets that were extended bear markets it wasn't a four-month bear market like we had in 2020 so i'm just going to keep saying this the s&p 500 got cut in half from the highs of march of 2000 to o
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02 and 2007 to 2009. think about this we're down less than or around 20% or so and we haven't even had the recession yet and the dif difference now is that we were easing monetary policy in both instances the whole way. interest rates were on their way to zero. now they're going to opposite one. one thing, i guess this is the answer to your question, is that valuations haven't reset >> disagree. there's a huge bifurcation to get to that down 20 average, right? you've had some expectations that have been very much reset >> did you watch the show last night? the 490 of the bottom weighted stocks, the top ten that make up nearly 30% of the weight of the index of 500 stocks have a pe of about 25 so that's why i just think that until apple and microsoft and google, until they have that moment -- >> 496 then. >> they are priced for recession
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right now. but don't valuations -- >> need the others to be priced as well or can we go to recession without having that reset in the biggest cap tech stocks >> we can't. and when you look at the multiples relative to history, we're still expensive. i haven't heard anybody talk about demand all we're talking about is a dollar that's stronger all we're talking about are interest rates that are higher and a consumer that still has a job. do you think that's where we're going to be in 18 months i don't. >> let's get to the man in the heart of today's action. steve liesman is live for us in washington steve, good to see you what's your take on this day >> you know, i think that the fed and chair powell, melissa, delivered on the three themes they've really hammered for the past month going to hike to a high level, hold at a high level and what it's going to do the going to hurt the fed historically raising rates 75 basis points for a third time forecasting more hikes to come. boosted the outlook for the
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funds rate next year by a full percentage rate to 4.6 slashed to as close to zero as ever there may come a time when the fed stops to see what impacts it's had on the economy. powell said we ain't there yet >> there is a possibility certainly that we would go to a certain level that we're confident in and stay there for a time but we're not at that level. clearly today, we're just, we've just moved i think probably into the very lowest level of what might be restrictive and certainly my view and the view of the committee, there's a ways to go. >> maybe the most hawkish part of the press conference when he said at the end he thinks it's likely the fed hits that 4.6% rate that made the fed's outlook more hawkish than the market. but it wasn't enough the fed outhawked the hawks
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today, melissa >> also commentary about how divided the committee was in terms of next steps. i thought that was an interesting glimpse into what the market is grappling with in terms of trying to figure out what is next beyond today. >> i wouldn't think too hard about that, melissa. because i think that the way to play this is to just assume the fed is going to be more hawkish than you thought it was going to be that has been the better play for several months now seymour's right. you've got to go back to somewhere, 1980 to find a time when the fed has done, been more aggressive with rates. look, maybe that's a good way to look at it volcker raised rates by ten percentage points in one six-month period we're only deals with 300. three, i guess >> think about this panel, steve, interestingly is that i think largely, they have been more hawkish than the fed.
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so the question is what do you do from here for when folks here are outhawking the fed and the fed is coming around to our thinking, steve grasso >> steve, when we look at unemployment when you get an idea of where you think unemployment is that it moves the needle for the fed, did you come out of that meeting with any clarity? >> a little bit. i think their number is understated if they really want the kind of slack that's going to be needed in the economy to bring inflation down in a classic tradeoff between unemployment and inflation i don't know if they have that chart in the back, the fed's own unemployment forecast. they have been going up to 4.4%. that's less than a percentage point and i don't know if it's going to be enough to create the kind of slack. the fed essentially by the way is kind of forecasting a soft landing. remember, it sees gdp next year go to 1.2% unemployment,4.4
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that's not really too shabby consider i think powell himself said that if that happens, it will be a pretty decent outcome. he's not forecasting a recession per se, but when the fed says 0.2%, you know, it's darn close to no growth at all. >> is there any historical precedence, steve, to look at in terms of fed hiking interest rates and when unemployment tit ticks higher what the lag effect is >> there's no defined rule in general, there's a relation between gdp and unemployment, but hard to find one between the fed and this in general, you get unemployment rate falling, sorry, rising, in the beginning of recessions, which is why a lot of people are reluctant to call this a recession. you asked a good question, there aren't a people going through right now. you have an economy still trying
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to find its legs from the pandemic still needs to put people to work to get back to where we were before in some industries while at the same time, dealing with a really debilitating war in ukraine and really dramatically having an effect on prices there's a lot of adjustment to do i wish i could give you an all clear. certainly the two looks like a screaming buy if you think the fed is going to go to 4.6 and it's priced that had in, but there's some possibility it may have to go higher than that. it may have additional adjustment to do if i could go home and take home 4.1% on my two-year and say two points of that is real, i'd be very, very happy even if one point is real, i'd be very happy with that. i just don't know if you can sound an all clear alert on how high that yield is going to go >> hey, steve. isn't it like clear as day what the market's interpretation of the fed was today?
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the curve inverted another 12 basis points short end sold off the market fears the fed's pushing too hard >> i think that's right. when you say too hard though, what would the market say if the fed was backing off here, tim? with inflation doing what it did. i think the market is of two minds. it wants the fed to do both things at once and it can't possibly do that the market wants the fed to vanquish inflation i guess they want to immaculate inflation vanquishing is what they want and it's not going to happen, tim. i think powell is saying look, the only way to do this, if that's what you folks want, which is what america is screaming for, to bring inflation down, there's only a couple of ways to do that. one is to create slack in the economy. reducing unemployment rate and economic growth. you can't walk away without your hands dirty on this one. >> the fed talks about bringing inflation down slowly so why
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can't maythey move a little slo now after they've been aggressive >> great question. i think the fed believes there's some efficacy in front loading this, getting it done more quickly and maybe it doesn't have to have as much pain on the back end if it brings forward and takes the medicine now i think that's what the thinking is in the federal reserve. not saying it's right. >> all right steve, always great to get your take on things >> pleasure. >> steve liesman, long day today. so the message powell delivered was pain more pain to be felt on main street and wall street where are we now, steve? >> i don't think we're feeling pain yet housing market has just started to correct people associate their worth with the stock market and the worth of their home. the worth of your home hasn't taken a hit yet. the stock market has taken a hit, but to dan's point, we're still way above where we should potentially be so i think we're in the early
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stages of pain >> i thought that was equities telling us we're seeing conclusion they're going aggressive i guess that wasn't the case get back to a couple of companies that have announced the last couple of days. look at general mills today. they raised their guidance said this is an environment that's great for them. kelloggs rallied in sympathy some other names, colgate palmolive. there's a lot of trading to do in here, but there are companies to invest in >> so we're in that kind of market staples, cereal and short duration bonds >> and utilities none of that is particularly attractive you think about markets and think about how to find a bottom in a period like we've been in you need some capitulation there are hundreds of stocks that have been cut in half many are down 60, 70, 80% or so and that's what it feels like in a bear market.
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the problem is we are only down 20% from the all-time high on january 2nd of this year, right, and so a really short period of time so we haven't had that pain yet in the stock market. if you own individual stocks, it is painful if you own the indices, it is in the hospital so to steve's point, if you haven't felt it in the housing market yet, down 20% after last year, you probably don't feel horrible yet the last piece of this puzzle is unemployment when it ticks up, when we see four, then on the way to 4.5 >> having a job is what it's all about. >> it's not something any of us feel good about. the fed's use of the word pain is kind of hard for some of us who are gainfully employed when you think about this >> more from dennis lockheart. dennis, great to have you with us >> thank you >> pain was the message that powell delivered how much pain and when do you think we'll see unemployment go above 4% when it comes to the pain we
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felt on main street and wall street, is that you know, around it had corner? >> i think it's likely to start later this year if the path to policy they projected turns out to be executed, which is another 100, 125 basis points by year end. i think companies are going to begin to retrench in the anticipation of a much slower environment and going into 2023, you could very well see the unemployment rate rise >> you know, when you paint the picture like that, deppnnis, higher unemployment by the end of the year, companies retrenching, the world in which the two-year note is yielding north of 2%, it doesn't sound like a soft landing scenario where do you stand on that now knowing better what the fed's
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f trajectory is? >> as chairman powell said during the press conference, the higher for longer posture or stance of policy may very well mean the chances at least of a mild recession that's as far as he wanted to go, i think. he's very sober in his recognition that may require a recession of some kind in order to finally vanquish as steve liesman said, vanquish inflation. >> it's karen. thanks for being here. let me ask you, do you think the fed given all the data they have, do you think they're doing the right thing? >> well, it's always a compared to what question >> to the wrong thing. >> yeah. but i mean, it's compared to alternative scenario of some kind
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i think they're doing the right thing because i think the fundamental point jay powell has made is that over the long-term, if a central bank does not get inflation under control, everyone suffers and then you have to come back and try to fix the problem with harsher measures at a later date and then the suffering is deeper so they're presented with this inflation problem. they're going to deal with it. and i think the policy path, the policy stance is what is required, yes. i'm very supportive. >> is there any fear though on your part, dennis, that we just have not seen the impact of these rate hikes flow through to the economy? we haven't seen the effects of balance sheet flow through to the economy either and when it does hit, it's going to hit really hard? >> i think that's possible because there's always lags. one metaphor for this is the risk of oversteering
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you've heard this before, but it's the ocean liner and you're the captain and you're turning the wheel and nothing is happening. and so the tendency is to oversteer. in this case, the fed doing that with limited tools against a complex picture of inflation >> mr. lockhart, inflation what part of this troubles you the most and just timeline on where are we turning the corner? >> i have been focusing on the shorter term measure of inflation month over month and i've been focusing more on core and various indications of core inflation, which gets to the underlying inflation that the fed really cares about and at least the cpi last month, the underlying that is core inflation month over month doubled effectively. so it shows as powell i think portrayed, you know, we're not seeing real convincing evidence that inflation is coming under
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control. >> dennis, we've got to leave it there. always great to get your take on things appreciate it. so now what, dan if by the end of the year, we're starting to see unemployment tick higher -- >> did you watch last night's show because you should know. to quote our friend, guy he's still our friend, right >> still in sicily >> careful what you wish for and when you think about this. so if they want pain, then they may have main street pain. may put us in a recession. may not know how to get us out of that recession because we have unusual dynamics. we just doubled the size of the fed's balance sheet because of a black swan event not because of the normal course of recessions or anything like that again, the logical higher bound of unemployment is not where we were pre pandemic at 3.5%. probably is somewhere around 4%. the recession that is coming is not likely to be one that
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they're going to be able to turn on a dime and go back to qe to lower interest rates just don't know how to do that >> i have a question for steve in terms of your forecast for fed worry. 3300 >> did i say february? >> yeah. >> gave us an exact date >> he meant the fed 2020 highs pre pandemic >> sorry i thought you meant february >> i was actually going to ask for a pair of aspirin. >> if we go to those levels, below what many people -- are you short the markets now? like, how do you trade through that >> for me, the only thing that's a catalyst for the market to bounce before year end or there abouts is midterm elections. so i can't, i don't think collectively -- >> the next fed meeting is a week before the midterm elections. >> which could bepoliticized earnings are going to start to take a hit margins are going to start to contract so there's zero bullishness in
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me other than the elections in november and that's the only thing i can see that rallies market >> or maybe a cpi trend that cools off. >> no. doesn't matter >> we know now we know that the next month could be another jump like we saw in july, august, right we've learned our lesson >> right but it could also come in cooler >> right >> which i -- so you're saying what could maybe -- >> i think you're right. as soon as powell and they come out and say it needs nothing >> entirely hawkish. they've got to go past it. he said the economy doesn't work if there's not price stability he only leaned on one side of the mandate. didn't really talk about employment talked all about price stability. they're going to go a lot farther than they feel that i had need to. minimizing meta. will they trim to bring layoffs? we're all over afterhours action shares of kb home and lennar on
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wow. i can do better! yes you can! i can do better, too! now you really can do better! switch to the fastest mobile service - xfinity mobile. now with the best price on two lines of unlimited. just $30 a line. welcome back to "fast money. meta and google, the latest tech firms to start making cuts according to a "wall street
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journal" report. meta looking to trim by at least 10% likely job cuts and giving employees a month to reapply for internal roles google alerted employees they had to find a new role or face layoffs. let's bring in gene munster. good to see you. are you glad to hear these companies exploring these cuts >> glad couldn't come soon enough obviously the market narrative around profitability is one of the reasons. the second is that this hiring bender that especially meta has been on the past couple of years has been a concern we are shareholders of meta and that has been a concern. i just want to quickly put that into perspective they grew head count by 23% last year they grew revenue at 22% it's rare you grow head count faster than revenue. if you're curious, that's just over 50 hires per working day
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last year. you can't hire at that speed with quality in the previous year, they grew at 30% google's was 14% and 16% respectfully over the past couple of years, but their growth rate was much higher. so really this conversation is about meta and the core question that we have is ultimately how deep are these cuts going to go? i think 10% is a starting point. i suspect if you fast forward two years from now and look at their peak, just over 71,000, i think we'll probably be 15% plus below that and i think that's a good thing i think as much i believe in the meta verse, i think some of that needs to come from their reality labs and i think that's going to be good for profitability. >> hey, gene, so you're very focused on consumer internet names and we're seeing cuts here we've been seeing cuts in tech for months this is at least 8,000 jobs. when you think about these sass
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companies, is this the quarter we're going to start to see, microsoft didn't confirm it last quarter. are we going to see weakness in enterprise demand? i think this is where the last pieces of the puzzle here for megacap tech >> i think so. i think microsoft in particular is probably the one they hinted to when talked about pausing additions. i think the enterprise is going to slow. talked a lot about the consumer. why do i think the enterprise slows? at some level most of the time is driven by the consumer. it has the second third derivative leading back to the consumer just takes longer for that to happen for these cuts to come from some of these bigger companies like microsoft, it doesn't mean that microsoft's revenue needs to fall off the cliff that's unlikely given the subscription nature of the business it's more likely that growth rate dips a bit and you don't need as many people. the recession here, we'll call
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it a recession, is given an opportunity for a lot of these companies to look around and also right size relative to revenue and also to productivity because things kind of got a little off the rails over the last couple of years on the productivity front >> gene, thanks for your time. good to see you. >> thank you >> so which big cap tech stock do you think is most vulnerable, karen, in terms of a correction or being more in line with the market multiple? >> something that has a higher market multiple, for me, a alphabet is my biggest position. you've got the cash below market multiple is a good place to be clearly, that's not been the right place to be for the last couple of months, but i like the idea of cost cutting there and meta they're somewhat different stories, of course but they've had revenue growth all have had tremendous revenue growth and the gross margins are so gigantic that you can hide a
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lot of expenses. they can't do that anymore revenue's clearly not growing as fast this is the next thing to do these are still fantastic businesses >> when you look at meta, they have a pr problem. they don't know how to narrate who they are when the stock is down 57% year-to-date, it's hard to say you would still sell it but when you look at a chart on a technical level, i run out of supports for meta. we remember when it came public, the set the stock had. which means that it can descend a heck of a lot longer than we're prepared for >> we're watching shares of salesforce the company saying they expect to hit $350 billion in revenue by 2026. what year is it? what year, 2022? >> sometime in the future. >> 2026 is the forecast for $50 billion. it's up 2.5% we are saying in the break, do they know what's happening this quarter or the next let alone in
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four years >> yeah. so consensus estimates for 47 billion. this is a rounding error maybe it's shorts covering there's a lot of bearishness near term so you like to hear some of this longer term guidance, but it speaks to their plan they will probably get to $50 billion in revenues in fiscal year 2026 just depends how >> gene told us about the second derivative software at some point, you can pull back and cut back and getting back to google meta, google i think has priced in a pullback think about ad sales the underperformance is about ad sales and underperformance to tiktok and that is pricing in some of the cyclicality. >> there's a lot more "fast money" to come here's what's up next. >> getting grilled the options pits are sizzling with some restaurant activity and traders could be betting one
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name gets fried. plus, stocks dropping. as the central bank hikes rates yet again and the move has one of our traders buying something for the first time ever. "fast money" trade school is in session. you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. ♪♪ welcome to life in the new open web. where innovation keeps pace with imagination and the future arrives daily. viant is pioneering a new approach to media combining ai with human insight. creating new ways to reach customers and new standards of measurement, both on and offline. viant. built for the new open web. built for now. what's it going to take for the world to reach net-zero emissions? it's going to take investing in some things you've heard of and some you'd never expect.
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help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity shares of le nnar on the move kb home turning in a report with mixed results. diana, what are the details here >> melissa, it was as you said a
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nice beat for lennar in q3 coming in at 5.03. still up 29% year-over-year and revenues were higher primarily due to a 13% increase in the number of home deliveries and a 15% increase in the arverage sales price to 491,000 from 428. stewart miller said supply constraints still limit deliveries starts were still consistent driven by adjusting prices and incentives also said sales have been impacted by rising interest rates but there remains a significant national shortage of housing, especially workforce housing and demand remains strong as we navigate the rebalance between price and interest rates lennar's inventory rose 24% from the end of last fiscal year and i see that as a red flag
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>> what is this talk about the rebalance of price because of interest rates when prices have gone up? >> so that's what -- yeah, that didn't make a whole lot of sense in the report to be honest because they had prices up 15% and they're talking about you know, adding incentives. buying on the mortgage rate and lowering prices. on the homebuilder sentiment report we got this week, they reported one quarter of builders said they were lowering prices then you see this average sale price for lennar going up, you have to wonder are the more expensive homes selling? because it doesn't sound like they're lowering prices, but then he's saying we're rebalancing prices >> yeah. questions. thanks diana olick. steve, so we were just talking about how main street's going to feel pain and what is holding up is housing and if he's going to break the back of inflation that's got to come down. >> sounds like they're selling less homes for more money. that was my takeaway there
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you would think that the inflation in the housing, the actual price of the home has to be coming in or sooner or later will be coming in, which means the bottom line will be less you cannot think in a rising rate environment that they're going to earn more money going forward. >> right so what does that mean for a home depot because you like to go there literally. >> i do. i do i'm a junkie for the black and decker tools you have a dynamic with the homebuilders where you have to see rates going higher home depot is trading just above a market multiple. it trades at a premium to lowe's i'd rather own lowe's. they can both pull back more 250 is an area you can start nibbling i done home depot. i think there could be more pain >> i would like to buy more. i think they're both great companies. i think the sentiment around it is pretty terrible but the valuation has come in a lot and
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i think about ultimately, these are great businesses to own. >> coming up, if you can't stand the heat, get out of the kitchen. one restaurant stock sizzling higher, but options traders could be betting this gets burned plus, long time listener, first time buyer one of our traders scooping up something they have never bought before "fast money" trade school is coming up right after this
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shares darden falling. one option trader betting they're about to erase those gains. mike >> darden traded 18 times the average daily volume outpacing calls by 3-1 october 130. trader bought 1,000 of the 130s. sold 2,000 of the 115, making a bet it could drop about 13%, risking about 240,000 in total max profit would be about one and a quarter million if it declines that much >> i thought they still owned red lobster. they do not. private equity so for those who associate the
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two, disassociate. grasso what's the trade >> before it sold off, the chart looks okay i would use the 200-day moving average. call it 131. remember the three-day rule. if this stock gets hit now, i would wait a couple of days until the stock stabilizes >> for more options action, tune in to the full show. coming up, it's in the every meinone of our traders buys sothg for the first time ever the new buy and why. "fast money's" back in two
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stocks closing as session lows today the dow dropping more than 500 points and karen made a notable buy on the heels of this fed decision it was the first time she has ever done this in her career what did you do? >> sounds so crazy i have never bought one year treasuries before and yet, you know, when powell came out with his decision and things really started to move, i thought, all right. this is really good. the one year yielding 4.10
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as an all terntive to cash, seems like a great thing to earn state and local taxes, you don't have to pay. so i literally had never done this before. i didn't know how to do it can't be that hard people do it all the time. called up jpmorgan, said is jamie there. he's busy, but can we help you i think i'll probably hang on to it for a year. that seems out of whack, right >> we had michael schumaker on yesterday from wells fargo and he said by short duration because the yields are so good >> i think you could stay short duration in credit and in places where credits and muni bonds we've started to talk about this this is a new asset allocation approach it makes a lot of sense. a laddered approach to me makes a lot of sense because i think
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we still don't know. it's back to our fed conversation how quickly and how long >> just think about what we always talk about on this desk when do other markets or spaces become more trtractive you have a value investor who's never done something like this before this is the level where things have piqued her curiosity. there's a finite amount of funds that you are investing and you've allocated them to some place other than equities for the first time ever. i think that's probably a worthy note for the market as a whole on a macro level >> yeah, but isn't your portfolio look like a google etf soon or alphabet >> no, because as it goes down, it becomes -- >> they own a lot of treasuries. i bought the i shares u.s. treasury etf which has short and longer term and i think that's a good way to express that >> coming up, some stocks just aren't worth the trouble
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welcome back with fears about where the market is heading, we asked our
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traders if they had any stay away stocks. dan, i feel like your list might be long. >> i want to give you one here xrt. retail in general. if back to school doesn't materialize the way that a lot of retailers were hoping last august when they reported, i think it's going to be a highly discounted holiday season. it's going the start early and often. >> karen >> for me, the travel space and it's just you know combination of recession, people have less disposable income. they've already traveled a lot we knew there was a bubble and a lot of these companies raised so much debt, they had to during the pandemic, wasn't their fault. but that is coming due and they're going to have to roll it over at much higher rates. >> talking about duration in a portfolio and to me, i don't want to be in long duration assets high multiple tech i don't want to be in heavy duty growth stocks. at some point, great companies that are nithese companies are
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worth nibbling on, but it's not time the semiconductors smh. i talk about this all the time but not only do i think some of these very high quality companies can go lower, it's not an indictment on what's going on with semiconductors. if you look at the chart and the rel rel relative underperformance, i think you can go back to the first quarter of 2019. this group has another 25% or more to go lower i don't think you have to chase them there we know what's going on in the world, but not now >> xle energy for me, could you have scripted a better scenario for energy to rally? no xle is up 36% year-to-date now while i think the dollar is moving higher, what does that mean for energy? it's an inverse correlation. energy has to move lower if we have the last five years energy did nothing
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now it's outperformed. it's overdone. >> they can still make money though if energy goes lower. >> they can still make money the break evens for a lot of these companies are a lot lower tan they used to be, but when people are transferring money out, it's a finite basis >> could we get split screen these companies are running -- they're running the most efficient they've ever been. >> with the dollar up 25% and we know the impact of the dollar. there it is, steve so but again, i think the free cash flow we've heard from these companies, the payout levels, these are not necessarily companies that are going to grow at all costs if demand on oil grows aggressively, that's fine. but the headlines out of russia are particularly scary that changes the geopolitics around oil. >> what was the major headwind for a lot of these fossil fuels? it was esg investing
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i think everyone became agnostic once they learned they could only earn a profit with energy stocks but they're going to have a come to jesus moment when the ends and people sell their fossil fuels >> germany's closing down businesses closing down factories >> what are they going to power them with? >> esg means nothing if you can't turn on your lights. the world's not ready to fully embrace a decarbonized world >> up next, finatresl ad
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final trade. we made it to the end of the show no one made fun of my shirt. tim. >> you really kept us in line. kept the players playing within the lines. great job. mcdonald's i think people are playing down to mcdonald's and that's a good thing for mcdonald's i stay there >> i'm wearing a red challenge flag my final trade, what i bought today. one year never thought i'd say it >> dan >> you hate that i disagreed with you on that >> you've disagreed on a few
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things netflix. >> steve >> darden restaurants. this one's going to be volatile for the next couple of days. use the 131 level to buy >> if only i had a whistle we'll see you back here tomorrow at 50.:0 "mad money with jim cramer" starts now. my mission is simple, to make you money i'm here to level the playing field for all invest to investos there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to a special san francisco edition of cramerica other people want to make friends, i'm just trying to save you some money my job to entertain but put this in context call me or tweet me @jimcramer look, the market got


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