tv Fast Money CNBC November 18, 2022 5:00pm-5:30pm EST
terms, the absolute dollar level of act at this time has remained pretty high. it's not to say that the rule book has totally been torn up and you're not going to have recession risk next year, but i think it's a viable argument on both sides and i think that's why the market is caught in between. >> you have a great weekend. i'll see you on the other side of that. "fast money" begins now. oil, crude crumbling, down 10%. a host of other commodities falling, too does this fall to fears a recession is looming plus, power outage at tesla. shares falling 20 % this month lace 'em up at foot locker stock popping after earnings beat and a better than expected outlook, and taylor swift seeing red over the ticket master debacle. that's coming up i'm melissa lee. on the desk tonight -- we are
awaiting the sentencing of f fof fof former theranos founder elizabeth holmes first to the markets, we start off with crude oil prices getting crushed wti falling blow the $80 mark for the first time since late september. the commodity putting in its worst week since april taking oil stocks with it. all down more than 5% this week. and it wasn't just energy. king copper dropping 7%. is this a sign that there's even more pain to come for the economy? or just a trade that lost some momentum karen, what do you think >> i think the energy part might be a trade that lost momentum,
although you could point to other sign os a recession. i'm not sure but i feel like the move in energy was so big in such a short amount of time, that even if the fundamentals were still there, which they very well may be, that it just was so much you had to take some money off the table. so, i wish i took more off the table. >> you piece this together with what the yield curve is telling us in terms of this inversion that we have been witnessing with china getting pretty strict on covid lockdowns in the beijing area, tim, and might think there is a slowdown looming here. >> the data we're getting on oil demand is not one that tells you it's falling off a cliff here, and if anything i think we're finding it's much more resilient and china opening to me is a delta that the market's been trading on up or down, but the reality is china will re-open at some point, the global economy is slowing we're all handicapping to what point. but aggregate oil demand is
probably 2% next year. that's on the downside gets back to where energy equities are trading and being priced for we talk about this all the time. the community's probably got $70 or less in terms of the conservative they're pricing against. i would look more broadly at other commodities. scrap metal prices, scrap steel. i would look at -- i'm short steel. i do think that resource companies while i say all the time are run better, we're in a cycle where i don't think resource companies are necessarily going to see the kind of demand they had coming out of the crisis. but not yet have we heard it fall off the table a lot of this has been a function of the dollar trade i'm somewhere in the middle. i think there is a lot of cyclical in this trade, but i don't think it's a reason to get out of it. i'm buying. >> we have been showing the copper chart down. so it's not just oil alone it's the commodity complex that's telling the same story.
>> yeah, i think you have to take some from this relative to the macroeconomy you can't have the central banks hike as much as they have, you can't have inflation coming down without seeing some impact on the commodity complex, but relative to energy, there's still some pretty good charts. look at exxon, chevron they're above the june highs they're retesting now. i think whether they hold or not is going to be important pay attention to that. karen alluded to this, this has been a mean reversion rally, i think driven by false hope of a fed pivot or lower interest rates, whatever you want to call it the worst year to date stocks were down 60% before the most recent rally they're up 20% during the recent rally. it's been the best stocks, the energies of the world, that haven't done much. i think you can stick with this trade even though the economy is slowing down i think the energy dynamics are still going to support the economy enough that earnings
earn enough to support. >> you mentioned the fed pivot you could make a bear and bull case with the economy for the fallen oil you can say the fed is going to pivot so pressures ease and oil and other commodities come down. or they don't pivot work go into a deeper recession, and commodity prices come down steve grasso, what was your call on oil before? i remember you made it and jaws dropped on the desk because it seemed so off at the time. >> yeah, it was back when wti was in the 120s and i said $65 a barrel of oil by year end so i think it has a lot to do with the dollar but sometimes it's correlated. sometimes it's not correlated. you can't really trade off that. i think right now it's traded off recession worries. but if you look at all commodities, melissa -- lumber, wheat, cotton, heating oil, iron
ore -- everything is trading at the lower end of the 52-week range so i think everything is in the process of factoring in recession. i'm going give it a shot at $65. i don't want to push it at the blackjack table too long, but i think you're going to see oil really collapse on itself in the next month and a half. >> tim, you're the guy in vegas, you were shaking your head when he was talking. >> i don't think that energy demand is going to fall off a table that quickly, first an all, and i would get back to some elements of the economy that at least tw now -- by the way, pushing back on steve's argument doesn't mean that steve's not right that there aren't issues i don't think we should be thinking about but between now and year end, the unemployment rate is going to stay well below 5%. the u.s. economy is not going to crater the issues around energy -- first of all, wti prices are a function more of geopolitics and
when you talk about equities that are down, what, 3% all time on a big move from oil we're talking about multiple things here. i think energy dynamics in the fundamentals and what they mean in the context of fed hikes, i think they're two different trades, and i think we agree we haven't seen the head winds from the fed on the economy i don't think reinvestment or cap backs in the sector that's lagged is going to change. the companies themselves have been much more discipline about. that that's good for the equities but good for the price. so to me there's a good floor on oil prices here. whatever that number is, it's certainly a case where it's not going collapse. >> how much does this help your view of the consumer, karen, after we got the terrible data point from target other day? >> well, as a target shareholder, that was a terrible data point
the call was pretty terrible as well but it does seem to be somewhat idiosyncratic to target. walmart is a little bit different business in the groceries, and so they just did a better job executing target still has inventory issues and i think the housing trade hit target harder. but i think all of these things coming down -- all of these commodities, that was partially what made home prices unaffordable everything going into the home -- lumber, copper, everything -- i do think labor is still really tight, but i think the -- we are six months maybish from the housing trade bottoming, and so i don't know, i feel like target, they just kind of blew it. >> yeah. meantime let's goet to tesla. shares have been cut nearly in half and the chart master is
firm on his call, keep selling so, carter, what are the charts saying, instead of just sell >> they say kind of keep selling. what a mess. here, just a simple exercise if you were to find everything is balance since october 13th, if you look over a broad aggregate, find stocks that are making new 52-week lows it's a few. this is not a small stock. you can draw the lines any way you want, but i think the lines draw themselves. what we have here, and this is sort of very symmetrical -- tesla has respected these line, and now of course we are hovering right here at a great juncture we undercut that low every so slightly today let's look at the same thing and draw the lines a different way some people like to call their formations, name them. head and shoulders, something that's been documented for decades and decades, and that's what this is now, how to know how low it will
go, the truth is it's anybody's guess. but we close around 180, and i think certainly 150 is in the cards. >> carter, is that line 180, do we breach that line? my question is, if for some reason the stock manages to find enough oomf to get above that line, does it make you more confident, maybe, that there's hope that that line could be a floor for the stock? >> sure, that's the nature we did undercut it ever so slightly, and you can still save yourself so to speak but the real is twofold. it's just how poor the relative strength is to have almost all equities global by bounce for the better part of four weeks, five weeks straight. to not participate means you're not attracting buyers, which means people are looking at it but buying something else. let's say it does start to bounce and comes to life there are so many people who are
trapped who would love to be out, you're heavy. it acts poorly. >> we'll see you shortly in "options action. steve grasso, are you with carter worth, sell it? >> yeah. i'm looking at the chart as well as he was speaking and the next area of support is $167. that brings you back to 2020 levels, and it could go as low as -- what i'm looking at is the mid 20s. so 167, stutter step support, down to 125. >> jeff mills? >> yeah, i totally agree i have been saying to sell tesla for a while, and i have been wrong. starting to look right listen, i think some people looking to step into a stock like this say, maybe we get a fed pivot, maybe interest rates drop and you get a pop for some of these tech names. i don't think that's the reality. the bond market is prying in the same peek funds rate as it was
prior. the bond market has not changed so i would not be wading into names that look technically weak in hopes we get some reversing i agree. i would sell tesla here. >> another issue is even if there is some reprieve for tech stocks, tesla might not fall into the category just because of all the other stuff that's going on with elon musk, tim. >> also, it's an auto company, right? i thought if anything we were going to be introducing the concept that auto companies have fallen under a lot of pressure i understand gm has positive comment about their ev business. but as a guy who's long on both of those stocks and think the valuations are grade and fundamentals are valuable, you can't tell me that tesla doesn't get pushed around by the same auto trade you go straight to autos in terms of where the fed is impacting the macroeconomy, and
i would get to the marginal buyer of tesla stock outside of institutions has been a retail investor if you see the fallout in some of the asset classes including crypto and multiple tech, this is the group of folks that were defending elon and the stock at all points the three or four big rally point for tesla have been an s&p inclusion, a stock split, and of course the good stuff, the profitability that got him into the s&p and production numbers really the numbers that started to get them when they started talking about $500,000 and so some of those positives are things that clearly are in the price. i'm not sure what those positives are going forward, especially when you consider the head winds in the auto sector. coming up, are sneakers going to be the hot ticket item? we'll bring you that stock next. >> plus, it is friday, so we're cooking up a chart of the week general mills. stick around to find out what he is watching. and we are still --
actually, we've got the elizabeth holmes sentence. let's get straight to scott cohn who's in the courthouse in san jose. >> she will get 11 years 11 years and th3 months elizabeth holmes sentenced after being convicted on four felony counts back in january in a lengthy, about four-hour sentencing hearing here at u.s. district court in san jose, california, in the heart of silicon valley the judge who is a silicon valley native talking about how he grew up here and how business use to be done with a handshake, and wondering whether elizabeth holmes was intoxicated by the fame, whether it was the human being hubris that made her predict these counts of wire fraud. before that, a tearful plea from elizabeth on the stand about how
she was devastated by the failure of her company, how theranos and the team meant to world to her, and how she was setting out the change the world and is now trying to change herself. and learn lessons. what she did not do in the plea was apologize to the investor os patient who is relied on the blood testing. she's planning to appeal this almost certainly that may be part of the reason why. but again, judge davola ruling that at least $121 million lost by investors, by more than ten victims in this case, and that gives elizabeth holmes the sentence, what he says is on the low end of the federal sentencing guidelines, but just the same, 11 years and three months in prison for elizabeth holmes. >> it could have been up to 20 years, scott, so one might view it as a lighter sentence
you said before she's most likely to appeal, almost certain to appeal this will she serve right away or will she be at home for the appeal >> reporter: we're waiting to hear about that. that's another thing the judge will have to rule on oftentimes in cases like, this they will let the defendant stay free on bail pending an appeal, but that's something they'll be arguing about as we speak right now, whether -- but he does have the option of sending her right to prison or letting her stay free pending her appeal, which is virtually certain also unclear is restitution. the government want add a 15-year prison sentence, so she got less than that, and the government asked for $800 million in restitution. the judge said he's going to hold a hearing on that at a later date one of the people that the government says deserves restitution, or the entities that does is the estate of
george shultz, whose son worked at theranos. he was a board member and backer, and george shultz's son, who's his grandson who worked at the company, his son got up and talk about what the family was put as a result of all of this george shultz stuck with elizabeth holmes to the end. left a big a strangement and a very difficult episode that the company said -- that the family, i should say, they're happy to get behind them but again, the whole question of restitution and everything else, still to be determined with elizabeth holmes now sentenced to 11 years in prison. >> all right scott, thank you scott cohn at the sentencingof elizabeth holmes interesting given the backdrop you know, we have had trevor milton nikola. we have had sam bankman freed who could be facing similar
messages what message does this give to founders who want to go the route of trying to fool investors? >> not a good one, something particularly health related. i know i'm going to get @'d, but i think she got a lighter sentence because she's a woman. >> pregnant with her second child and they submitted family photos to the court before sentencing there's a case to be made, should the kids get punished always a question for females. >> yeah. not that it shouldn't be for males. so that's good for women, i guess, lighter sentences other than that, i don't know. >> the message here is that no matter how smart, quote unquote, the investor is, you got to do your own due diligence we've seen this with theranos. think of the board
george shultz wasn't the only one. tim draper was an early investor then we have ftx and think of the long line of "smart" investors in that as well. >> if one smart investor did their work, seemingly another smart investor doesn't have to do their work. i also know the timing of this verdict and the sentencing is -- it's more coincidental to what's going on but boy, doesn't it seem -- scott does such great work i feel like it's day e deja vu s could be madoff. seems to coincide and there's a market cycle it's unfortunately sad in terms of all the people that were hurt and injured. there will be more we hear about from ftx and other similar schemes, and that's where i do think these resets in markets are very important in terms of people, as you said, doing the
work and understanding where the fundamentals -- we talk about long duration assets and growth at all costs these are pie in the sky situations. >> let's go back to scott cohn he has more information on when elizabeth holmes has to start serving her sentence. >> reporter: she will be going to prison, according to george davola who says she must surrender by april 27th. so he's not allowing her to go free on bail, although she can plea to the court of appeals we're hearing from jill sylvester in the courtroom the family is hugging one another. her mother looks devastated, sitting down and crying. everyone is hugging one another. again, she is being ordered to go to prison april 27th following her conviction her sentence now, 11 years in
this epic theranos fraud. >> do we know how far along her pregnancy is i'm curious if the april date has anything to do with when her baby is due to be born. >> look like she's pretty far long, but i'm no good judge of that that may have something to do with it. i also want to correct something. i said earlier she did not apologize to her patients. she did, in fact, as we get an account of what she said in her very tearful appeal there, so she is taking some responsibility, but the judge didn't see that as necessarily in sincere, and he talk about that in his sentencing as she pronounced this this afternoon. >> scott, thank you. elizabeth holmes sentenced to 11 years in pso e' have to surrender herself to prison in april much more "fast money" after this
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kinda like this- welcome to 30 rock! join xfinity rewards for free on the xfinity app today. our thanks. your rewards. welcome back to "fast money. shares of foot locker jumping higher on the heel of a strong earnings report. the retailer setting strong demand increasing its fourth quarter and full year guidance it was the company's first report under new ceo mary
dillon karen, you're a huge fan of hers >> i am. i'm a huge fan of foot locker. it opened $5 and ended up 2, 3 bucks but i thought it was a very good quarter. she talk about the cadence of the quarter, which like a lot of other retailers saw dropped off in october but it sounded like this quarter is going well. i thought she was sandbag it a little bit i think she talked about -- or the cfo talked about gross margins coming down, sg&a going up some of the initiatives she wanted to do they did not buy back stock. that didn't thrill me, but i give her a lot of rope to transform anything she likes if she can be remotely close to foot locker what he did at ulta. guy would say, is it better at $288 than yesterday?
i think it is. guidance is kov. why not set the bar lower. >> i hadn't thought about the parallels between ulta and foot locker until you told me about them jeff mills, i wanted your take about foot locker being the seller of other brands and how successful she was in transforming ulta in selling other people's brands. here we are at foot locker do you like the stock? does i interest you? >> yeah, that's an interesting comparison i think even after the move today, it's still cheaper versus broad retail, so i think you can play the momentum just given the valuation. >> all right time for the final trade let us go around the horn. tim seymour. >> i think in a week where the stock market went sideways but has big gains the rotation back into pharma is where you want to be that's pfizer in pharma.
>> steve grasso. >> a stock i've never said in all the years i have been on cnbc, flex the whole space on fire. buy. >> jeff mills. >> i look to fade this 40% rally in semi. sell the smh and hit 228 there's more downside. >> karen >> not surprisingly, my final trade is ft oolocker. >> that does it for us don't go anywhere. "options action" is up next.
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it's friday, and it's time for "options action. i'm melissa lee live from the nasdaq markets in times square here with us carter worth, mike khouw, and a special appearance by denis savage. >> market volatility will be with us a while longer the options arena is presenting a opportunity few have ever seen we'll explain what it is, how long it may last and how you can take advantage now then, crude below $80.