tv Fast Money CNBC November 11, 2022 5:00pm-5:31pm EST
year >> news wise it looks like we're clear. if things get disorderly, if you start seeing more shoes drop, you can't be confident we've discounted all of it there is room. it's only 2% to 3% >> i feel like we haven't seen the last of the crypto i'll see you on the other side "fast money" is now. right now on "fast" dollar doldrums, the greenback marking its biggest drop and the chart master sending us a big warning signal for what it may mean for the rest of the market plus, a semi surge chip stocks have roared back to life with the smh etf up more than 30% from its october lows so is this a sign the sector has truly hit a bottom one stock's move really stood out. how this stock jumped 25% in just five days and where it's
going from sara eisen in for mea lee from the heart of rainy and dark times square. we have courtney garcia, tim seymour, steve grasso and we'll start with the market. the nasdaq jumping nearly 2% to jump the week. the s&p 500 coming back above the 4,000 mark and even the dow which spent most of the day in the red managed to eke out a gain solid gains for the week with the nasdaq up more than 8% since monday one of our traders says not so fast things may not be as good as they seem. what warning signs are you seeing quite a rally. >> i hate to be timmy downer welcome, sara. some obvious things, the wall of
worries, we know what positioning was, where cash levels were and where sentiment has been that inflationary number from 40-year highs because of used car prices and a new calculation for help care doesn't take the fed out of play. i recognize relative change. we have only just started to go. fourth quarter revisions negative after having been 9% in june for the fourth quarter. a lot of that is still to come i would point to rates is, if anything, moving out into '23. i think you named it, some of those numbers, a 31% move. nvidia, i think there's an environment here where we've seen a lot of these moves before and the reality is that the market was expecting a hot
number yesterday they got a less than hot number and we know the rest i can't wait to hear carter talk about the dollar >> 4% down move. do not see that every week courtney, you disagree with tim. you're buying this, right? >> i half agree with tim here. i do think it's very positive this week but it doesn't necessarily mean inflation is over what we want to look at is a lot of your longer duration, higher tech assets, for example, this rotation back in it's not behind us we will still be on a higher inflation environment. although i'm optimistic on the market focus on your value companies over your growth i would not say get too excited. >> but that's not what happened this week. we see inflation come down and the urge is to get back into tech, the most shorted stock,
into the pandemic. everything that has gotten crushed this year. >> those are things that have fallen the hardest and will come back up. i see that as a shorter term bounce that will not last. >> grasso, what about you? >> everything hinges on the dollar and everything hinges on powell, so to the extent powell doesn't upset this rally, this rally can last into year end and then you have seasonality. you don't have earnings to get in the way you don't have a lot of headlines anymore, sara. at least the next month and a half i think the rally continues. look at commodities, lumber right around the 52-week low, corn right around the 52-week low. cotton, coffee it's lower than its peak that really doesn't matter
because if powell comes out and says we want to crush demand, he's going to crush demand and the market will go lower i don't want to say it's all clear. >> i don't think anybody expects him to pause or to stop with the rate hikes or the hawkish rhetoric but if inflation is coming down and this is the beginning of a trend, then the market expects the fed to slow the pace of interest rate hikes. they want a softer landing and this makes it more likely that they do that, doesn't it >> well, he did say he wanted to crush demand those are his words. they had to kill demand. i don't know if this would be killing demand just yet. we haven't seen the jobs market be crushed just yet. and then go back to the other number, sara we haven't seen a fed stop raising rates until the fed funds rate is higher than the rate of inflation. so we've got some ways to go
there. so i don't see a soft landing. i do see a rally, an aggressive rally. >> what about you, jeff? not so fast with tim or are you more hopeful >> i'm with grasso in that i think we can rally into year end but with tim in the sense i don't think we've seen the bottom for the cycle i think you can keep those things very separate some things have been pointed out from a technical perspective. we haven't seen that kind of momentum 64% of stocks had a two standard deviation to the upside. i've been pointing to that in terms of the momentum spark. look, breadth is better than the highs in august. 51% of stocks above the average
in august. now we're still 10% below those levels still not great but better than before it probably brings in the august highs as well but as soon as people start to realize inflation is falling because demand is a problem, it's already a problem given what the fed is done, i think the market will reverse course. consumer confidence, i think that's what will win out as we move into next year. >> it is around, what, 4100 on s&p? >> correct >> the two standard deviation move, i've heard every argument today that's unhealthy, that's classic bear market behavior you sound like you're saying it's quite bullish, that it could be more the sign of a bottoming process in the near
term >> off lows, rallies that are sustainable, you typically see multiple days where you have stocks 50%, 60%, making daily advances i under the knee-jerk reaction to say this is unhealthy look at arc is up. it's a reasonably good technical sign >> so you are buying more the cyclical groups? what did you say, industrials, financials -- >> health care was one of the worst performers i would look at some as an opportunity. i don't think a big shift and tech is overperforming i think health care, your energy, i think those are things you want to continue to be in. we sill own tech but i'm not overweight it or actively trying to chase it. i think we will continue to be in this area where they're going to continue to be under pressure
because rates are still going to be higher. >> tim, what about your exposure if you don't love the market move, would you rotate away from the rotation this week, back into stocks like health care, consumer staples or utilities which did underperform this week >> pharma for sure this pullback is something you've had massive breakouts in mercks and j&js and clearly underperformance i get asset allocation emerging markets work. i think there are more risk on trade. commodities have been discussed. even in a weaker demand environment, i don't think you get terribly away from what's working. jeff and i were talking about this on our midday call. haven't given you the kinds of defense after the first two-thirds of the move to this point. i think staples will be
defensive. there's nothing good about those val wagss. i think rates have pooled back too much too fast. those allocators and those towards fixed income and to credit and as you move up the credit curve are actually very interesting places to be allocating capital here. i think you had the kind of pullback that makes them interesting to buy again >> 3.8 is where we closed yesterday. bond market closed today because of veterans day but did see a lot of buying on the inflation print. meantime, the u.s. dollar losing nearly 2% today falling toits lowest level since mid-august the chart master has been calling for this move since late september. let's bring in carter worth of worth charting everyone wants to know whether the dollar has peaked and we continue to see it move south. what do you think? >> it's been the long-awaited thing, dollar too strong, dollar too strong, rates too high
the market bounce has happened but the weak dollar and lower rates are bearish. let's look at a few charts it's a perfectly parallel mathematically identical two lines and we know it's not p/e and it's not balance of payments and it's not gdp, it is almost all technical it is responding like a pinball machine and that's what it was of course we're down here, the before let's look at the chart. we've now cracked through the bottom the question is how much more to go i do not think this is bullish let's look at the next chart and try to figure out where from here i've gone back further this is a two-year chart, on a different time frame it's the
same sequencing. big currency desk don't trade gdp and balance but price action back to the upper band but i think ultimately we can sink into the middle and what that would be, take a look at the next chart and final chart the middle band. i think at minimum we are continuing lower and you will get to the middle of this well-defined move since the lows >> that's very bullish, carter >> why lower rates but that's the game of the stock market. we will change our work for apple and google because the cost is 3. it's an elixir for the moment. lower rates means that demand is off -- >> what do you mean it's taking 8% to 10% off revenue.
>> that's a long-term thing. it's interpreted as bullish. what it means is that something is weaker than basically economists possibly a recession >> tim, help me out. >> look, carter's charts always tell stories that are more than 1,000 words. i just -- the dollar represents central bank differentials right now. we've gone from a place where the fed was the only central bank in town for a long time dixie goes to 113. bank of japan has been asleep at the switch the move on the dollar is reflective of the ecb, 60% of the dollar index stepping up their game and we've had a fed that's even told us in their last meeting to me dollar and central bank differentials are driving the dollar here and ultimately i do think it is constructive if you think that the opposite is a lot of this is not central bank differentials but has been safety and so i agree with carter i'm not getting lost here in
constant currency dynamics or what the fx impact was i don't care about that. i think longer term these multinationals, i really care about their core business and would rather look at constant currency and strip out your fx i do think the dollar move here is very important. i think it's very important both for sentiment. i think it's very important for a number of asset classes. i think it's giving you some sense the extremity of this move is -- and here i was the one saying it's not over yet buti think the thrust of the federal reserve being so far out in front of every other central bank in the world is ending. >> right we had a good debate a few weeks ago and you said the dollar is stopping going up. >> we love currency. >> clearly that's what's happening now. >> i think it's a tail wind. >> grasso, what about you? if you believed carter that the chart indicates more weakness for the dollar, would you buy stocks on that because it's a risk barometer. it's an earnings indicator
there's a lot of head winds that come from the strong dollar around the world >> ultimately it could be a weaker economy or recession but to your point a stronger dollar and higher rates was weak for growth stocks and was weak for the overall market so the inverse should be at least shorter term positive for risk assets, positive for growth so i would be a buyer of the market based on what carter just said >> well, that was a good one, carter we'll see you for "options action." intel shrugging off a double down grade and locking in nearly 8% gain for the week should the stock surge give the semi bulls a reason to breathe more easily. answers next later, is there magic left for disney shares saw their biggest single day drop since 2001 earlier this week off earnings. there may be a way to play the
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money. look at the chips stocks the smh etf up 15% since monday closing out its best week since october 2001 even intel able to shake off a double downgrade from jpmorgan which cut its rating on the stock from over to underweight, years to regain the market share as personal tech demand slows. the stock down as much as 3% finished the day up more than 2% a very strong showing. are you a buyer? there were a lot of concerns in this group >> there have been, yeah likely one of the things a rising tide to risk asset are benefiting from that is up with the overall market it has not gone away yet
it will continue to outweigh on intel and how much their share is being taken from amd. i am not a buyer yet they are still expensive >> amd has a new chip out. called the dominos because it delivers jeff, are you into the semis >> there are positive things going on valuation is easier at 15 times versus 26 or 27 times and the smh at the top if you're trading this, a lot of the really important chip stocks are in clear down trends and you're working on 40% rally for amd, 50% rally for nvidia so this is similar to what we saw in the summertime, clearly great businesses but there are issues with sickly kalt semi demand and falling demand is going to happen so i think you can buy them cheaper and relative to a stock like intel
just quickly, that is gone, a stock down 60% from its high and the p/e is higher than it was at that point so it speaks to what's going on from a fundamental perspective with a stock like intel. >> people aren't excited about the chips act and the billions of dollars in subsidies these companies are going to get to reshore manufacturing because it will take a while? >> and supply/demand i've been negative on the chips space for quite some time now. nvidia up 40% for the month, the best chart in the chips space is texas instruments. it's not in that overwhelmingly declining space that it's in but the chance to buy them a lot safer than where they are now. we went from a supply drought to actually a glut in the next couple of months i would stay away longer term.
a mega melt up one of our traders called for the stock to rally we'll tell you what it is and what he's doing. there's the clue it's a he. up more than 20% in one week you're watching "fast money" you're watching "fast money" live from times square ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. can he stand on his own... once he's all on his own? this is financial security. and lincoln financial solutions will help you get there. as you plan, protect and retire.
keeping up the momentum amid the broader market rally you called for a bounce earlier in the week after what we've seen take place, do you take your profits and run or stick with it? >> when i'm looking at these, i like to watch retracements, sara, play technicals on stocks. and this was just jumping out at me as a stock that had bottomed and wanted to retrace a lot of the downward move. the first initial retracement gets you to $115 which is what we've seen and where people sell stocks between the 50% and the 618. another $5 to the upside, risk/reward. if you bought it this week you could lighten up i'm staying long my position i think you're going to see this stock continue its rally with the rest of the market into year end, so we could probably get back to that 130, 135 mark in my opinion. >> tim, do you agree or not so fast again >> i do because i'm long and i
was buying in the 130s and i expect we'll get back there and maybe that's a place to trade out of it. the fundamentals i heard wasn't just about a $40 billion market cap gain by cutting 11% of your workforce. i heard a ceo that said not only my fault but a ceo i think will show a lot more restraint on metaverse. if they said no mas on metaverse the stock would soar they have significant opex attached to security and cost that is have grown the last few years but they have major capex of $35 billion to $40 billion they can cut this is an interesting time to own the stock. it is time for our final trade. around the horn, tim, start with you. >> look, as a longer term play and an investor taiwan semi trades at the same multiple as intel with a lot more growth when you get an iphone downgrade that's when you buy this thing
>> grasso? >> this is another one i think is prime for a big pop, nexgen energy, a uranium play this could rally, too >> did not see that coming jeff what about you? >> i have merck. look for support at 95 that's at breakout level i think it goes higher from there. >> courtney? >> two big things where we got positive news out of china and bw is a great way. taiwan semi is one of s it largest holdings >> don't go anywhere because "options action" is next can't wait
it is friday happy friday it also means it's time for "options action. i'm sara eisen in for melissa lee live from times square after yesterday's huge rally markets were a little more mellow this time around. so is today a little bit of a pause or followthrough that refreshes or just the big bounce just a blip maybe? we'll help prepare you with options. and then one sector that is sure to pull back after similar upside spree, asset managers we're going to look at how to play that. and it's still earnings season we are working aroun
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