tv Fast Money CNBC September 26, 2014 5:00pm-5:31pm EDT
hey, there, kelly. a lot of people talked about pym pimco and a lot said it was the bond market. what is the impact of bill groves leaving on the actual bond market and rates? we are going to tackle that question. >> huge question, important question. straight over to you guys. >> "fast money" starts right now after the nasdaq market. i'm melissa lee. our traders tonight are tim see more, brian kelly, pete najarian and guy nadalma. ending the day up 167 points after yesterday's violent selloff. the s&p seeing the best day since early august. the nasdaq soaring back with over a 1% gain. keep in mind, all three major averages logged their worst five-day performance in over eight weeks. pete, should we be setting up for more volatility ahead? >> i think we are going to see some swings. the volatility index, the fact that it got as high as it did yesterday before it started to
sell off. it got underneath 15. are we overly concerned? no. is it something to watch? absolutely yes. we are over the 50 in the 200-day moving average? the volume has increased. september has been a monster month in the options world. a lot of this volatility we are seeing, the movement. these triple digit moves require the fact that we would expect to see volatility trading. >> we have talked about this on this desk and you have been pretty clear with that message. >> if volatility has rallied roughly 15%-20%. based upon the market, it was to sell at this point. would you be selling volatility here? >> i absolutely would be. i think we are going to go down. that also is because of the fact that it is predicated upon, i'm far more bullish in the market. i see some of the opportunities out there in some of the sectors. because of that, i think the volatility does go lower. >> we had an okay trade in crude
despite that. we had a good day for energy stocks. >> energy stocks in particular are very good. we have seen crude bottom out here. when you look out further, to 2016/'17, is hasn't sold off like everything else. that bodes well for somebody like a exxonmobil, xle, xlp. the volatility in the general market, i don't think anything was different today about the world than it was yesterday. i think it is really difficult to get a read off in either of these days. when we rallied today, we didn't have as much volume as we did when we sold off yesterday. generally, volume follows the trend. >> the last couple of days, holiday days for many on the markets. i am relatively positive on markets. i think volatility is going higher. i have been talking about the dollar. this week, the dollar closed for the 11th consecutive week higher which it hasn't done since
bretten woods. the united states from a central bank and economic policy is so far ahead of everybody else. it doesn't mean things are so great. will that choke us off? no, i don't think so. it infuses some questions about not only multinationals and other risk assets. emerging markets have been destroyed during this period. the dollar is going to continue to go higher and bring more volatility. this is ultimately constructed for equities. normalizing isn't painful. it is painful because we haven't been here. talk about that being sort of a pivot point. i still think it trades to 108. s&p was good today. bond market didn't move. the bounce at some of these casino stocks. i thought win was overdone. it bounced back today. i think some of the things that look interesting among many are some of the casinos, lvs and win. >> you take a look at specific names that are considered the more momentum names.
they didn't do quite as well as the broader markets. amazon logged in less than a half a percent. google was almost flat. >> a lot of the push yesterday started in the nasdaq because of apple. as we watched apple today, it started to move back up and got back up over 100. everybody was laughing yesterday when i said poppy docock, i don believe it is going lower. >> let me laugh at poppycock today. >> in one day, how much attention was given to apple and today, no attention. the move to the up side erased yesterday's losses. that's something i think is reflective of what's going on. we talked about big cap names. the mobile names didn't. the big cap days did. transportation as well. >> we were laughing at the word, not the idea.
starboard turned up the pressure on the internet urging aol and yahoo! to join with aol. eric jackson joins us. you actually made this call months ago. so kudos to you. i want to get your take on star board's analysis and some of the parts analysis. they say according to their analysis, there is a $17.67 gap between where it traded presumably yesterday at the clothes and where it should be trading. would you agree with that? >> yeah, i would, melissa. basically, the opportunity with yahoo! is really in the potential for tax savings of the stakes they still hold in ali ba ba and yahoo! japan. they traded off because there is not a lot of confidence among most investors that marissa myer
and ken goldman are going to n unlock the mix. now with them 2in the mix, something more positive can be done. >> is it your hope that marissa myers and jack, she is calling today to talk to about this. you think about when starboard went after aol, that activism precipitated tim armstrong to go behind the scenes and talk to microsoft and pull a rabbit out of his hat. $1.4 billion to microsoft. it totally surprised everybody. it was jim's way of trying to win over shareholder approval to say, don't trust those activists, trust me. the heat is on to marissa, to come up with something like that, herself. it is not going to be a patent
sale but something like the cash rich split with ali baba. let's just buy the whole company. take me out. i'll move on to the next thing. >> i'm confused on which part of this you think offers more upside. starboard talked more about aol. trying to fix the business people alie no backing too it. if you had a taxi efficient structure, that could make people would say $60 on yahoo!. which side is more interesting right now? >> the tax sufficiency part. it's $15, $17 a share that you are talking about potentially. the aol merger, it makes sense. if two private equity firms owned aol and yahoo! they would slap these two companies together and fire 13,000 people
overnight in a heartbeat. that's not going to even move the needle that much when you are talking about potentially 15 billion doz, $16 billion. >> part of the starboard letter is that they are merging marissa myer to halt the aggressive acquisition and then urging her to combine with aol. what do you want to see happen? >> i don't want to see any more tumblers or acquihires. them going public does put the lid on that. it will turn up the heat to return all the cash they got from ali baba, no the half. my hope is what i think is going
on right now, we should see some pretty significant over the next few months play out here. >> eric, thanks a lot for ponying in. eric jackson, joining us in the fast lane. what did you do with your yahoo! calls? >> i did take off something earlier that was going to expire anyway. i am going to add to it even more on monday specially based on some of the activity and what eric hit on right there. i think eric is on board with something i have been pushing for, which is potentially, why is it yahoo! itself in play? not just yahoo! doing acquisitions. the idea these guys from starboard in their letter talked about, hey, look, we are done with the acquisitions. we have had enough spending going on. why do you think they are thinking that? >> there are a lot of reasons why if somebody wanted to, yahoo! could be very attractive. >> as eric had mentioned, you have the up-side in terms of a bigger dividend to share
holders. he says it is ride in terms of the checkbook being closed. that had been a huge wild card concern for investors. those are two big things. >> that's why i bought it when it was down 5%, 7% that day. it was probably somewhere around zero. it is worth something. not only that, now, you have it in play. the ceo of softbank has already said, he would like to own more of ali baba and wishes he did. >> this gets the guys involved in the stock. tax or not, efficiency or not with ali baba. no matter what you did, people had much higher evaluations. it had to attach to yahoo! after ali baba than they had. some of the parts even without taxi fish yun tax efficiency. >> what starboard is saying is 5662 on the stock. that's a huge up side.
>> we talked about a move potentially to 45. it got to 44. the pullback was on ridiculous volume. it traded almost half a billion shares and we talked about that being the flush. it feels like it wants to repeat. i i am not convinced 50 is in play. >> unusual activity in case you missed out. action investors will have another chance to trade the chinese e-commerce company whether it debuts its stock options on monday. what are we watching for. what shall we expect? >> what you can expect is something close to facebook. >> 365,000 contracts traded the day facebook did list the options. a lot had to do with the fact that because of the botched ipo and stock direction, it is a different set of circumstances. if you are wondering about implied volatilities and how much to expect, we already know. there is a huge attracts. people are already trying to position themselves, because
they think this will be a monster in terms of options and how much is going to be trading in there. if you look at the u.s. stocks, about 29 is about the average implied volatility there. about 41 when you look at the chinese-related internet stocks. i would expect the volatility to be trading somewhere between 40 and 45 for the implied volatility of the options which i think will attract folks that probably want to come in and buy some protection or sell a little bit of up side against some of their position they have got on. >> coming up, blackberry posting big gains after reporting a smaller than expected loss. is it back from the dead for good. plus, the move heard around the street. how bill gross's departure from pimco could signal more selling pressure ahead in the bond market. back in two. the conference call. the ultimate arena for business. hour after hour of diving deep, touching base, and putting ducks in rows. the only problem with conference calls: eventually they have to end. unless you have the comcast business voiceedge mobile app. it lets you switch seamlessly from your desk phone
janus. the major action was to sell. with his departure, is the strat skri going to change? >> the knee-jerk reaction was probably wrong. treasury market is huge. bill gross has now got to go build a portfolio over at janus. there are still going to be borrowers in that sense. the high yield space, hyg, jmk. if they get redem shunptions, p will be forced to sell the bonds. that's what you watch. that covered my hyg short. i will be back to short it again. it has been a great trade. >> the pimco return fund alone is $221 billion. janus has $31 billion in assets under management as a whole. if he goes and builds a bullish
portfolio. >> why are you selling at pimco? >> i am not. i am just raising the question. >> let's assume this is done in a way there is other people driving the ship. they have been driving the ship for a few weeks. there has been, as we hear, a lot of turmoil behind the scenes. i don't think he was suddenly running away from a portfolio. if there is any selling in the bond market has been around interest rates and volatility. >> it traded really well. tlt. the s&p up huge. they had a big run. you would have thought with that news and a move in the equity market, they would be down a percent. it was not. it was unchanged. doc was here yesterday. i think rates go a lot lower. >> i think ten-year, goes to 2%. two, two, two, whatever it takes. >> 221, 222. >> time for "pops and drops." big movers of the day.
massive pop for agios, the cancer drug. >> kudos to jim cramer who a week and a half was positive on this. you can't chase it here. it goes to show you the strength that some of the bio space they have. alex celgene. >> a pop-up 2% getting bumped to a bye rating. >> that was mr. mom on whatever it takes. altria, a story about their investments. it was dying 20 years ago. they own 20% of sad miller. i own it. i stay long. >> what are you guys talking about? there is like an inside joke. >> you ask how many votes are going to put in? >> now everybody knows. we are all on the same page. drop for fives are down 1%. that will significantly delay the development of it sickle cell drug. >> it is a slight drop. i still like this name. when you look at it on a forward
pfrmt "p." it is trading closer to that. >> michael keaton, up 7%, b.k. >> obviously, a big regis favorite. he is a winner again here. up 7% on good news. usually, up 7%. he takes the profits. i wouldn't here. i think this is a blast for .335. nike popping to a record high on a solid earnings beat. what it might mean for the likes of foot locker. we have the trade straight ahead. u lait?
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let's send it back to kate. marissa meyers did acknowledge that the company received a letter from starboard, which called on yahoo! to pursue a combination with aol. they acknowledged they did receive the letter and look forward to reviewing it with starboard. >> shares are moving higher today. >> the company posted a smaller than expected loss for the quarter. making some encouraging comments about the company's future on cnbc. >> i added to my long call position today. yesterday, we said it was down too much. today, great day. john chen is doing a fantastic job. he is doing everything he said. this is still a turn around story. on the new phone, i wish they wouldn't focus on it. they have preorders for 200,000. that's going to make them at least break even. that's a wash. we don't have to worry about that. that's where they are best at and i think they will. you stay long. >> would you give the beakers a
high-five. first of all, at least you have a defined risk tolerance you are willing to go with there. i read a book about that. >> absolutely. there is a lot to be said for the security levels of blackberry that a lot of people address. there are reasons behind it. >> next up, nike popping to a new high. the company saying its online sales jumped 70%. what might this mean for foot locker earnings. we did see positive price action. >> even lululemon got a bounce. go to nike real quick. we have all waxed poetic about nike, timmy specifically, pete as well. the problem is, i think it is too much too fast. huge volume day. crazy move percentagewise for nike. nothing not to like. western europe was unbelievable. too much too fast. a lot jumping on the back of this. everybody raising their price target. i say, look for a bullbacpull b.
i think you will get it. >> i took a third off today. this kind of a move, you don't see. i don't think you should see. asps are on the rise. their margins are on the rise. the assumptions, things are very healthy. why you have to remember about nike, a great long-term play. they will continue to he see better margin expansion. this multiple starts to get a lot of great news for 2015. i think you can take a breath here. >> foot locker. they crushed it last quarter. i think they crushed it again. obviously, we all seem to agree nike is strong. >> they had the worst drop in a single day ever. >> they are different numbers. when you looked back at the quarter foot locker was able to put up. and you you look at their balance sheet and the fact that they trade 15 forward earnings. this company is killing it. they still have plenty of room to the up side. they are so strong in europe and
western europe. there was no currency in western europe. >> 100, to 200 bases points. >> it didn't hurt them at all in this quarter. >> it might be a nike specific story. everybody is worried about this quarter, whether or not the u.s. dollar is going to hurt. it looks like it is not. the founder and ceo of go-pro, nick woodland will be live. you will not want to miss that. high school classmates of josh lipton. same class, same year. >> handsome. >> i hope he is listening. time for "the final trade." on the horn, tim seymour. >> cheap to the s&p. exxon. >> brian kelly? >> take off short hyg. i think it goes shorter. >> 550,000 calls 2 to 1 yahoo!. >> fun show.
what do you got going on next? carter where it is going to be. >> cbw, always. the hammer. >> that's hot. bristol-myers has not traded well, underperformed. they got some positive news after the bell. bristol-myers, bmy. that does it for us here on "fast." see you on monday. "options actions" starts right after this break. they're custom made trains.
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this is "options actions." the gross out trade. we are talking about the shocking pimco departure. what it could mean for the market? >> how could this crazy stunt make you a crazy amount of money. go-proshares are on fire. wait until you hear how high some traders see it going by next week. you won't believe who is kicking amazon's nook. it is not tyson but a fearsome group of opponents and itld