tv Fast Money CNBC July 20, 2015 5:00pm-6:01pm EDT
so this is a win. >> i've got to tell you we all had sweaty palms waiting for norton to get up here and you did very well. >> thank you. >> thank you, jim. good to sigh. dr. j, thank you as always. >> thanks, bill. >> "fast money" coming up in just a few seconds here. >> melissa leerks what's on tap for us here? >> we have the ultimate burrito taste test and we are trading the stocks. >> keeping it classy again tonight. >> that sounds like a good one. over to you. >> "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square i'm melissa lee. traders on the desk are tim seymour, pete najarian, dan nathan and guy adami. tonight on "fast" gold crashing. the yellow metal hitting a fresh five-year low in today's session but commodities king dennis gartman says this is only the beginning of the plunge. find out where he says the next stop is for the gold trade. plus what do apple, gopro, yahoo! and microsoft all have in common? they're all reporting tomorrow night in what we are calling trillion-dollar tech tuesday. but one of those names has got our traders worried and we'll tell you which one. but first, ibm, one of the largest dow components, out with earnings moments ago.
revenue coming in light, the stock getting hit hard in the after hours session. this is close to the after hours session low, down by almost 5%. let's get straight to cnbc's jon fortt with the very latest here. jon. >> well, melissa, as you said, revenues have come in light. there's a big currency impact as well. and growth markets in particular, brazil, russia, and china really a drag on growth here. ibm said india actually was up modestly but those others were down double digits. 5% growth. outside of the bric countries as far as those growth markets but those big ones drag them down. hardware actually performed reasonably well. compared to how they've been doing recently in ibm hardware. there's some possibility they bottomed out in that department. also the services backlog came in at $122 billion. that's around the range, maybe even slightly higher than analysts were looking for. but there are still some cost
issues they're working out in that arena. from the way they word td prior to the q & a the q & a started right before this program was beginning. sounds like they paid more for talent for ios in the enterprise. now they're getting questions from analysts about how this turnaround will continue given some of those difficulties they're having. cloud big data and security, though, those growth imperatives were up better than 30% constant currency. but that's not quite enough to counterbalance some of those areas that are down, melissa. >> jon fortt, we'll check in with you later on. ibm at after hours session lows on this report. the good news is the growth areas are in fact growing. d news is everything else is pretty much not. how do you look at it? >> definitely not. year over year revenues are down 12 1/2%. if you look at the services business, this is 62%, 63% of their overall core. not enough. transition continues. and everyone wants to say it's cheap, it's got a 3.1 div yield. it's been cheap for a long time,
it's a transition that's been sloppy, and i think you have to wait. and there's no reason to jump into the stock, especially a stock that rallied 6 1/2% into those numbers and has a very clear trading range. risk reward's 150 to 185. why would you have bought it going into these numbers? >> i think the problem is transition. it just has not been very smooth. everybody knows they're trying to get themselves more position in the cloud but when you look at revenues for the last 13 quarters down, when you look at the 1r6 revenues those are to down 12%, you look year over year just about every category it's down. we've got to see growth. the one area we are seeing growth is those imperatives, the cloud area, that's great but that's not enough and when you see weakness in the asian markets as well that's absolutely something that continue be tolerated right now. they've got to turn this boat a lot faster than they are right now. >> you've been making this point in terms of buybacks. oh, what did they beat on? they beat bps they missed on the revenue. what are they going to do in new fashion? they're going to do new buybacks. >> we got on this back in january when they cut the full-year guidance. they actually said they were only going to use the balance of their existing authorization.
at the time it was about $6.3 billion. this quarter for the balance of 2015, this quarter they bought 2.3. that's about half of what they bought last year at the same quarter. so when you think about it from an earnings standpoint, yes, earnings are declining, let's say double digits here but they're obviously trying to cut a lot of fat here. there's going to be some pain in the transition. i think you should be happy know they're not spending every single dime of their free cash flow on buybacks. they reduced that and you're going to have to see some organic changes to get revenue growth and earnings growth going again. that's how people are going to say okay, this is how a stock that trades at 10 250i78z earnings, it has a 3.1% dividend yield, this is how i see it going back to double-digit growth again and right now there's just no evidence of that. >> 13 straight quarters of revenue contraction, that is the exact amount of time that virginia ramadi has been on the job. >> i'm not going to say it's coincidental but you brought it up so we'll take it as is. >> really can't take it into
consideration yet. declining revenues, huge buybacks. what is the right multiple for a company with 13 straight quarters of declining revenues and given the scope in which ibm -- the business they're in. the fact they can't turn this around. i would submit it's probably closer to 9 than 10. right now it's trading at basically ten times the mid-point of next year's numbers. i think it should trade closer to 9. that gets to you about a $147 stock. again, not suggesting it will get there but it puts you basically right at low end of the range timmy just mentioned. >> the good news here is that the bar for the stock is ridiculously low. you probably are going to trough this quarter if not next in terms of where you are in the cycle of their revenue. can things get much, much worse? the argument sounds like for some of the people on the desk is it could. i think the transition is in place and i think it's just a case of why do you need to own the stock today. but for people that are looking to play out the next, you know, six to nine months, even though it's been 13 quarters of disappointment, it's not as if we just started this. and there is some chances being
seen. i think you can start to look at a company where you priced in an incredible amount of pain, you know your trading range and that's how you need to play this. >> we've seen this transition but is it fast enough? i think in some areas we're looking and we are seeing -- >> like turning a giant freighter. >> there's no doubt about it. but when you look at microsoft, we're going to be hearing from them not too long from now but when you look at some of these companies the transition's much faster. much more clear, more aggressive about it. to your point 13 quarters where we've seen these revenues going down, that says something about what's going on up top. they've got to turn it. this was a low bar, by the way, and they still basically missed at least one of those. >> but are we at the point now where she's got to do something, show more evidence in the next quarter, next two quarters, otherwise she's going to be under a lot more pressure than right now? >> they've been selling off assets. when i think about this, think about what ge did in april when they announced they're going to get out of this massive business and they were going to use the cash to fund buybacks. i know this is back to what you originally asked me.
they almost need to do something different structurally. you just mentioned microsoft. microsoft's grown sales by $20 billion over the last five years np if the last four years ibm has actually decreased sales by $20 billion off of a 100 base. it's just a massive secular shift that's going on with these businesses there. and they're just in the wrong positions and they're moving too slow. >> ibm's impact on the dow, it's one of the largest component but it's its own animal. >> only reason ibm isn't trading to levels tim just mentioned 147 is the broader markets been on fire. we closed at an all-time high. you have a little downturn in the tape which i'm not suggesting you will get. and this is a $147 stock. their legacy businesses are in decline. what's the right multiple? >> and more and more the dow is irrelevant. the s&p, these others. but the dow is 30 stocks. irrelevant. >> totally agree. one more check on the ibm chart in the after hours session. as jon fortt mentioned the q & a session is just getting under way on that conference call and we are sitting right here at afterhours session lows. this decline is more than 5% on
big blue. so we'll keep watching this story throughout the hour. coming up next shake shack falling hard after hours on a secondary hurt. herb greenberg just looked through a company filing and he's got a lot to say about this move. plus gold is crashing but the commodities king dennis gartman's got a way to make money off the gold plunge. he'll tell you what that is ahead. and later, tomorrow microsoft, apple, gopro, yahoo! they're all reporting what we are calling trillion-dollar tech tuesday. and our traders are betting on a big move in one of those names. we'll tell you what that is ahead on "fast."
but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.
few of its existing shareholders will sell up to 4 million shares. the burger chain saying it will not be selling any shares nor will it receive any of the proceeds from the sale. among the sellers green equity advisers shake shack. cfo jeff utz and chairman danny meyer. the filing with the s.e.c. comes ahead of next week's ex-praix of the company's post-ipo stock lockup. shares of shake shack are sliding in after hours, down about 6%. melissa? >> morgan brennan thanks for nap
for more on shake shack let's get to the one and only herb greenberg of pacific square research. on the "fast" line. you've been looking at the filing. what did you find? >> they're selling 4 million shares, insiders selling 4 million shares or at least registering to share 4 million shares of the 19.8 million this gruch insiders own. of course you could have more sales as a result of this but the thing you have to think of is this. not every company files a secondary. some do, some don't. we have so many companies with very limited shares outstand zmeng it's almost like as they come into the marketplace they want these registration statements to prime the pump, get people ready for it. but you look at how some of these have performed once they've done that and you get a fireeye which has collapsed, a gopro which has collapsed. we don't know how shake shack is going to do in the days and weeks after the actual lockup next week. you have box, which is locking
up which is locking up, comes off in three days, they didn't do a filing. so there are so many ways you can spin this in your head. >> how are you spinning it, herb? it sounds like you're trying to connect the dots between this secondary before the lockup expiration and fireeye. as we all know, that was pretty disastrous and a dramatic fall. >> i think in this case given everything that's happened with this stock post-ipo there's hardly a soul on the planet who wouldn't say this thing is beyond expensive that i think they're trying to -- i think companies that do this try to sustain the damage -- not sustain the damage, try to get ahead of any potential damage if they can. you can see what's happening in the after market. people being reminded there's a lockup. and again, you know, we'll see how many people really come out in the months after the actual lockup, after the registration. remember, this is just the registration. they're still free to sell. >> good point there, herb. thanks a lot for phoning in. do appreciate it. herb greenberg, pacific square.
dan nathan, does this take the sting out of the lockup expiration? >> i think it's smart. when you see a company trying to -- especially a company that has such a low flow. let's remember here that this is a stock that doesn't even have options listed on it because the float is so low. when you see this 180-day lockup, this should be a good thing for those investors because you want to see greater liquidity here. and so you can debate valuation or whether it's a good burger, a bad burger. i think this is good for the stock and i'd like to see management out in front of this. >> what do you think happens when the lockup expiration rolls around? >> i think the valuation is unsustainable and i think the growth story, obviously there's plenty of growth ahead of this company but from a trading perspective this is 630 million market cap. the volatility in this name is inherently high until this actually grows. yes, it will add to liquidity but i think ultimately it's going to have people staring at the fact that the best time in terms of the valuation are behind this company. i wouldn't be chasing it just because the lockup comes out. i think the stock comes out lower. >> amazon kicking off our top trades tonight.
gaining an upgrade to outperform from neutral at wedbush. also increasing price target to a 5.75 from 4.35. amazon reports earnings ever after the bell. >> we also have news from column as well. 565 and they talked about clothing and general merchandise being 70% of the revenues right now. they're talking about what that could mean in the near future, 2017 in terms of how big they could be. then you look at wedbush's call, they're talking about prime day. the prime day was very interesting. everybody was basically saying, hey, look-y would they do this in the middle of this year tharks just going to cut into margins. turned out to be an absolute hoernl. they actually surpassed what happens on black friday. this turned out to be something very, very strong. multiple different records were set there. that's probably why we're seeing 52-week highs today. this stock has been on fire for a while. you don't want to short it. earlier in the year we heard from them when they wanted to show us, they lifted the kimono and said here's how much money we can make at amazon. they showed everybody, now everybody knows and that's why i think this stock's -- >> it's okay to spend like a drunken sailor now?
>> at least i think they opened up why they're spending like a drunken sailor. i'm not saying necessarily that's the right thing to do, mel, but so far this is a company -- >> better than drunken sailors lifting up their kimonos. >> there's a lot of different things -- very interesting kimono. >> mixing metaphors. the image in your head's probably going to cause nightmares. i'm glad you mentioned wedbush but bernstein also came out with a bullish note saying they are way above the street. bank of america said this is our top pick. it goes on and on and on in terms of the analysts willing to jump on the bandwagon now at all-time highs. >> at least they're jumping on if ahead of earnings on sthurs. got to give them and credit for that. better to do it now than post-earnings. i'm in pete's cam. and tim's camp. i still think the gains in this stock can't continue. i wouldn't be surprised to see a netflix type move in amazon. i think it's going to catch people off guard. i think the pain trade is still higher. i get valuation. i get all those things. i'm just talking about trading the stock. i think the pain trade is higher in amzn. >> now from tech to solar sun
edison announcing it is buying residential solar play vivint solar. vivint shares soaring 44% on the news. tim. >> they keep feeding the beast. another multibillion-dollar acquisition for this company. i'm long the name. and the strategy here is they want to be -- >> long sunedison. >> i'm long sunedison. they just announced they increased their megawatt capacity by 50%. now somewhere around 4.3 megawatts up from 2.8. i think it's very, very good for the entire sector. and if you remember solar city's also talked about doing some kind of a deal through both acquisitions and another yield co or a yield co. so if you look at the success of sunedison, how they've been able to spin off the yieldco, continue to buy assets, grow their capacity, and now they're getting more into the residential business because as you said vivint is the second largest player in the residential pv business. it's a very big deal, a very exciting time in this whole space and and these guys are ahead of everybody. >> right. sun power also another yield co
coming in the next couple weeks, emerging markets yield co. it was interesting to see the reaction in the sector because solar city was the one that moved highest off the back of this. >> tim has been -- and karen too on sunedison. but the way look at this there's a lot of financial engineering going on in the space. >> no doubt. >> that has tons and tons of losses at a time when investors are seek more risk here. and i actually think it feels a little kind of squishy here. you know, we talk about biotech bubbles. forget that. this is also somewhat of a bubble here. a lot of m&a. >> why is this a bubble? >> huge debt. and these guys don't make money. >> if we have lower for longer oil, a lot of these projects look a lot less interesting. we can talk about it now and i can sound as dumb as i do about amazon or netflix or any of that. >> i don't know about that. >> but there's a day in the not too distant future where all these stocks are going to be cut in half. and that's just a fact. >> cut in half? >> of course. >> i don't see that coming. >> fact. okay. coming up, ibm falling after its
earnings report hovering near the lows right now. the conference call is on the way. but who is not speak on that call that's got investors raising their eyebrows. in the meantime here's what else is coming up on "fast." >> announcer: gold prices falling to a fresh five-year low. but no need to fear. the commodities king is here. find out the reason he says this may just be the tip of the iceberg for the gold plunge. plus trillion-dollar tech tuesday is upon us. with apple, gopro, microsoft, and yahoo! all reporting tomorrow after the bell. but one name could put the tech rally in jeopardy. yep, just like that. and the traders will tell you what it is when "fast money" returns.
seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm, they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day.
welcome back to "fast money." gold taking a beating today as some five tons were unloaded on the shanghai gold exchange. today's drop pushing prices to their lowest level in five years. so is there more pain ahead for the yellow metal? let's bring the commodities king himself in, dennis gartman of the gartman letter joins us from virginia beach. dennis, always good to see you. >> always good to be seen, michelle. >> melissa. >> michelle. melissa.
>> have another bourbon. >> i need another bourbon. absolutely. >> exactly. all right, dennis. let's cut to the chase here. in terms of gold, more pain ahead. why is that? >> well, the dollar's so strong. it is the overriding fundamental right now that's taking the gold price down and it's likely to continue. i see no reason to think that's going to change anytime soon. i've maintained we're only about in the third inning of maybe a nine-inning ball game, if we want to stretch the metaphor as far as the dollar is concerned. once the dollar gets going it tends to continue for a long period of time. that's weighing on commodities generally. but clearly it's weighing even more specifically upon the gold market. i have not liked gold at all in dollar terms for a long period of time. i do like gold in terms of euros. i do like gold in terms of yen. if i'm going to buy gold i want to own it in the currencies that are devaluing, that are falling in value. i don't want to spend dollars to do it. and i'm afraid that now other that we've gotten gold under this sort of duress you could -- we'll end up going to what i
used to call the obscene number. it wouldn't be surprising to me to take gold out from $1,000 just to do it. at that point you might have my interest in gold again. >> under 1,000 you think it's interesting? >> i think it would be interesting. and markets have a tendency to go to the obscene number too many times. i've seen it time and time and time again. and now that we're under 1,100, why can't you go under 1,000 just to do it? >> let me ask you this, dennis. there are a lot of people at home who can't buy gold in yen or euro terms that easily. why not just buy the dollar? isn't that basically what this is a bet on? it's a bet on strengthening the u.s. dollar. >> actually, they can buy gold in euro terms or yen terms. there are etfs to do that. it's not as difficult as it might seem. but it has been nothing more than a dollar denominated trade. clearly that has been the simple methodology. rather than trading gold, wouldn't it have been better simply to buy the dixie, wouldn't it have been better to sell the euro? wouldn't it have been better to
sell the japanese yen? wouldn't it have been better to sell the canadian dollar? so yes, the answer to your question is that has been the simpler and easier trade. no question. >> all right. dennis, good to see you. thank you. >> sorry about that. >> no problem, dennis. we go way back. so it's no problem. david. see you later. >> there are so many, you have to ask yourself does this augur a move lower in rates? if you think gold is moving the opposite -- if there were inflation there would be a need for gold and this is implying the ten-year's going to 160. what i don't understand is you why want to own gold at all in any terms because again, if the yen is down 2%, the dixie's up 2% in the last three weeks. gold's down 10% in the last month. so if you think xwoeld's going down through 1,000 you want to get out of the way. the question is what do you want to do with the gold miners? these things are basically being priced like they're going bankrupt. barrack, abx. 2 1/2 times debt to ebidta. you want to stay clear. but a kinross or bvn, b
buenaventura. these have an ebidta less than 1 and are buying gold assets right now. not everything is a trade on the negative side. i think you look at some of the guys that are going to be opportunistic. >> but ultimately even for these miners don't you just need a stable gold trade? these stocks, no matter how good their balance sheet is, they're not going to move higher if gold -- >> is gold going to zero? >> no, but if they remain at five-year lows. what do you think? >> april '09 india the country bought about 6 million ounces of xwoeld from the imf. 104 for $1,044. if it gets there that's where you buy it. and i don't think the selling in hong kong was anything nefarious. i think it was margin calls. pete's talked about it in energy. i think that's what you saw last night in gold. i don't want to make too much of it. 1044, we haven't seen it since '09. if it trades through buy it. >> he mentioned energy and i want to go right to oil. less about gold right now in my mind. i'm looking at oil stocks, $60,
50 in oil. wildcat, shale, drillers, all of them absolutely hit to the down side. and here's the odd part, mel. we aren't finding anybody out there who wants to buy. nobody's trying to buy -- catch the falling knife right now. they're chasing this to the down side. all we're seeing is put buying, put buying, put buying across the board. for those that are actually looking for some kind of a bounce, we haven't seen any signs of it right now in the derivatives market. >> apple, gopro, microsoft and yahoo! all on deck to report arnings tomorrow. could those reports be the key to the next leg of this tech rally or is the run-up in jerpzy? plus we've got quite the unorthodox method of finding out which company is tops when it comes to best-tasting burrito in the space pape hint, it's got a little something to do with guy and a burrito. that makes sense, right? that and much more ahead on "fast."
thing the services margins don't look to be set to improve anytime soon. currency headwinds a big part of that but also management saying we're investing in cloud platforms, we're investing in skills and they're referring partly to ios in the enterprise, this push they have with apple to try to bring mobile into the int-prize. they're investing "quite heavily" there but they believe over time as they get stale in cloud that margins will improve. they also did have some positive news on those growth initiatives that include big data and cloud analytics. they did see 30% growth there constant currency but unfortunately for them constant currency isn't exactly the world that we live in. we do have these currency headwinds which ibm did say got worse throughout the quarter, worse than they expected. free cash flow, though, was up and they expect to maintain their margin despite the fact these currency headwinds continue. >> now, jon, the call has
wrapped up. we have not heard from ginni rometty. she was not on the call. was that a surprise? >> that was not a surprise. the ibm ceo whether it's ginni romet rometty or her predecessor typically not on these calls and we have a call you can listen to to get a flavor for what ibm was saying about growth. here it is. >> in total our performance in the major markets was consistent with last quarter. while the growth market decelerated driven by the bric countries. the brics implement pacted ibm's overall revenue growth by two points in the second quarter. said another way our revenue excluding the brics would have been up 1%. >> this is similar to what we've seen from microsoft in the past, you didn't hear from the ceo on the call. ibm's been in that same boat usually when the ceo comes on it's because there's some major unusual announcement. so it wasn't unchon not to get ginni rometty here. >> jon fortt from san francisco.
ibm shares are down pretty much to session lows, down 5.1%. anything you hear that changes your mind? >> no. and the excuses about the growth markets, it's what we said here. their core business is not going to change overnight. the transition goes on and on. having said, that the bar is very low. the comps get better. you trade this thing from 150. guy says 147. that's fine. but there's no reason to buy going into these numbers. >> when you hear about the bric countries being so pavl doinful to double digits -- i like he says when you take out the bric -- you can't do that. that's garbage. read-through to other companies with huge exposure to china, to russia -- >> only in my opinion if they're in the same world as ibm is right now. i think it would be an overread to say thaev else -- >> you mean old legacy businesses? >> the legacy business i think would definitely be the guys most impacted. >> look at oracle, look at hewlett-packard, these are stocks trading at the lows of 2015 right now. they have not reported.
oracle reported in june. there's two takeaways. i think it's safe to assume that i.t. spending in the enterprise is not strong. we know that. and i think when we see a continuation of that the other point is when these companies give guidance in mid april the dollar actually was at the lows of 2015, and since it had this rally now it's come back a little bit. i think the comment about the dollar strength i think that's going to be a big, big headwind for the balance of the year. and second half 2015 numbers could be way high for some of these large cap. >> one of the most hotly anticipated reports of the season due out tomorrow. when apple gives its quarterly results. we caught up with piper jaffray's gene munster to find out what he will be looking for from the world's most valuable company. take a listen. >> i'm gene munster for "fast money" earnings edge. apple reports tomorrow night. the three key things to focus on, number one, iphone units. the bogey is 49 million units. number 2, gross margin. 39.5% is the bogey.
and number 3, the implied iphone number for the september quarter, which is 48 million. you put all three of these together we think it's going to be a net positive in shares of apple will move higher. for "fast money" i'm gene munster. >> all right. >> nice. >> pretty cool. >> earnings -- >> he's a pro. >> come on. >> he did it. i got confirmation. he did it one time. good for you, gene. >> 122 is the level we said. traded down to 120. i still think it's basing for the next move higher. i'm not pretending i've been this steadfast apple boy. i have not been. but it's setting up for the next leg higher to 154. >> we are in a tape that wants to go higher anyway. >> and one of the guys i think we have come to respect because he's been so strong. but he was talking about the penetration into china. he's talking about obviously the numbers themselves as well just like gene mentioned.
gene mentioned 49 million. i think the numbers are looking a little higher from other folks out there and ives lifted a lot of areas from 15 to 16. i think china's going to be strong. you asked about ibm just a minute ago. i think this is a completely different animal and i think apple's strength will come from china. >> it depends what you're selling. >> you're selling a larger phone. and you're selling it now with 3g and 4g numbers that are going higher and-high higher. you'll the major carriers came out and said 3g growth up. june up in mobile. everything apple needs to grow is coming in china and a bigger phone means this refresh is going to be multiyear in china, not a couple quarters. and that's enough. no hype on this stock going into these numbers, by the way. it's very interesting. >> you mean the 12% rally in the last week and a half? >> i'm talking about the overexuberance in terms of the expectations about apple to not do anything wrong. the whole market's up, dan. right at key resistance. i think this stock is waiting to break out. i'm long. there you go, dan. how about that?
>> 2 1/2 bucks away from a new high. >> i would be very surprised if they beat and guide the guide up you're going to have a new high in the stock but i think you could have a situation where in the low 130s the stock has been sold over the last two quarters and that's kind of been a top. you're going to need a big beat to get this thing going higher. i think it's important to note the google move on friday was eye-popping. they gained about $70 billion in market cap but a 10% move higher in apple would be about $70 billion. it's not crazy to think about. and smuf guys, dennis was saying the obscene number, i don't even know what that is, but is that 1,000 on apple? is that what everybody thinks it has to get to $1 trillion in market cap or something like that? i don't know. i mean, listen, i think the easy money's been made. >> we've got a good print on apple when it reports. is that all clear for the nasdaq? bob pisani had a trader note out today saying that 31% of the market cap of the nasdaq 100 is when the largest four stocks, google, apple, amazon and facebook. all of them are going gangbusters. all of you guys here, well,
maybe not you, not dan, like these stocks and think they will go higher. what do you think? >> i don't want to get -- i don't even know what all clear means. when is there ever all clear for anything? can that take us to the next step higher? yeah, if that's what you want to say. i do think we can take the next leg higher. but when you say all clear it implies there are no hurdles, barriers, and it's not the bus you see coming it's the one on the other side. yes i think it can go higher. does that mean all clear? i have no idea. >> we've also got a slew of other reports out, big cap tech names that is. yahoo! microsoft, gopro all out after the bell. we're calling it trillion-dollar tech tuesday with the combined market caps of tomorrow's earnings reports exceeding $1 trillion. time to take your position ahead of these earnings. where do you want to start, tim? >> i'll start with yahoo! because i'm long the name and i bought it going into numbers last quarter and that's been not a painful trade but down probably 8% from last quarter. you're going to trade on alibaba but the core is trading in negative territory.
just sipt the asian assets and the cash and then investment share at 45 bucks a share. the alibaba story is a big problem for these guys and i think people are totally missing that too and that's not going to work itself out overnight. the fourth quarter tax spinoff is what this is about. not exactly the same. pete and i were talking about this. but look at the move in ebay and paypal. everybody knew for months what was going on here and it took that actual spinoff to get this thing to shoot up and create value. i think you're going to see the same thing in yahoo!. >> everybody's excited about paypal and that's a spin company, right? people aren't excited at this moment in baba. it has all sorts of problems. >> there's some confusion there. this is not clear. >> for that reason i'm more standoffish. the easy money in yahoo!'s been made. >> how about gopro? >> it's had a nice squeeze, gron 50 to 60 in a heartbeat. a lot of good news about products and i think that's what people need to see, they need to see what the company looks like,
what the product offerings are years from now. they don't have a ton of competition where they're doing very well. so this is one we have to continue to squeeze. i'm not long. i wouldn't advocate buying it here. but if they put up a big raise, you probably see 70 in the coming weeks. >> or more. >> which do you think out of those? >> i love this game. is this the game? >> no. it's a different game. good earnings versus bad earnings. give me a pick for bad earnings and for good earnings. >> the bad earnings is easy. you've got to go with yahoo!. i'll go down that. and the good earnings, look, i've been trying to stay positive in gopro. it's starting to work again. ambarella up huge again. might lend itself to some strong earnings for gopro tomorrow. bad earnings yahoo!. good earnings gopro. >> we'll see. coming up chipotle earnings on deck and the "fast money" team is doing some groundwork on wlrn whether or not it really has the best burrito. a full-on "fast" investigation right here on set. a shocking reversal in morgan
stanley after its earnings report. what was it about the results and traders hitting the sell button in we'll break it right down. stay tuned. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good. i like to bake. with at&t get up to $400 dollars in total savings on tools to manage your business. why should over two hundred years of citi history matter to you? well, because it tells us something powerful about progress:
that whether times are good or bad, people and their ideas will continue to move the world forward. as long as they have someone to believe in them. citi financed the transatlantic cable that connected continents. and the panama canal, that made our world a smaller place. we backed the marshall plan that helped europe regain its strength. and pioneered the atm, for cash, anytime. for over two centuries we've supported dreams like these, and the people and companies behind them. so why should that matter to you? because, today, we are still helping progress makers turn their ideas into reality. and the next great idea could be yours.
take a look at this chart of morgan stanley. a huge reversal in today's session. the stock finishing out the day lower, this after a big earnings beat this morning. should we be concerned about it? guy, what do you think? >> we've seen this happen with goldman sachs before too. i thought the quarter was fine.
it didn't stretch on valuation. i think you got to a point where people took profits in a name that's been up huge. i think a week from now we'll look back and say morgan is higher than it is right now. i still think goldman sachs is the place to be. i still think it trades up to the 250 level we saw six or seven years ago. pp to me that's still best in breed. should we be concerned? if we come back a week from now and it's 38 we'll have a different conversation. >> do you like morgan stanley because the trading revenues almost beat out goldman sachs -- >> yes. >> -- or do you still like the wealth management -- >> both. i think the management has done a phenomenal job. this company seems to be absolutely cranking right now. this was all expected but the stock had made the move to guy's point. this is a stock that if you just go back six, seven days ago was trading closer to 36, 37 and now today it got up all the way to 41. a hot of this was built in. stock was moving nicely in the premarket. then eventually the sellers came in. i think these financials when you go through bank of america, jpmorgan, citi and all these numbers, pretty spectacular and a lot of beats. not just beating expectations
but beating previous year, beating across the board everywhere. >> is citi your top pick? >> citi's my top pick. and citi if you look at it it has broken through these five-year levels. to say they're going to break down at key levels for morgan stanley this is probably as much resistance as any of them because this goes back to also interim resistance back in august of '08 but this is a level that the stock broke out through. i think you actually buy this stock and i think the numbers show not only is trading working but wealth management can make money with higher margins even when the market's not going higher. that's what these guys are doing. >> here's an epic breakout. look at visa. 70. new all-time high. this thing has been consolidating. >> it wasn't just the financials having a big day today. in fact, take a look at the biotech index. this is as the largest alzheimer's conference of the year gets under way. cnbc's meg tirrell's got the details. >> people are very, very excited about this conference. we talked last week on stock
therapy about how the stakes are so high for a couple companies. and that's because alzheimer's drug development has been so hard. between 1998 and 2014, 123 alzheimer's drugs failed in clinical trials and just four were approved. but there is some optimism now. there are 59 drugs currently in the pipeline for alzheimer's and two of them are in the spotlight this week. we took a really simple look at how they work. alzheimer's disease is characterized by build-ups of plaque in the brain, called beta amylloyd. those may be toxic to brain cells known as neurons. key for memory and thinking. medicines currently on the market like nimenda and aricept may temporarily alleviate symptoms of alzheimer's by increasing levels of certain brain chemicals. but they don't reduce the plaque build-up associated with the disease. new experimental drugs from eli lilly, biogen, and others take aim at the plaques themselves.
they're given by infusion, binding to beta-amyloid and reducing its levels in the brain. scientists hope this approach and others may slow the cognitive declines that are hallmarks of alzheimer's. and with the number of people who have alzheimer's, analysts say a successful drug could be 20 billion nasdaq annual sales. we're bring you all the news from biogen, eli lilly important for both of their stocks on wednesday. back to you. >> wednesday is the date biogen moved to 1% higher in today's session. >> wednesday is the day. it's been moving a lot on anticipation of these data. but you also saw it peek in march around the first information that came out and it's kind of come off as people have worried about what wednesday's going to bring. it's really volatile for such a gigantic company. >> meg, look forward to wednesday. thank you. meg tirrell, our biotech reporter. guy adami. >> you mentioned ar sept. that's pfizer's drug. they report i think the 28th of july. pfizer's pretty interesting here. i know pete's talked about it. alzheimer's is the holy grail. i mean, that is the holy grail.
i don't think anybody's as close as some of these stocks would like lend itself to think that they are. but somebody's going to unravel this. will it be pfizer? i don't know. but i do think pfizer rallies into earnings. >> here's the interesting thing about this particular company. they went through trials years ago in 2011, 2012 and did not progress because it did not quite get to the levels they needed to yet they have stuck with it, put money into it and as guy mentioned $20 billion. holy smokes. if they can get there, this is huge. >> still ahead chipotle on deck to report earnings tomorrow night but just how does its famed burrito stack up against the competition? it is a major burrito blowout. in a blind taste test. much more "fast money" straight ahead.
♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. welcome back. chipotle getting ready to report earnings tomorrow. but it its burrito stand up to its competitors? it's time for a good old-fashioned blind taste test to find out. we've got guy adami here. got his blindfold on. can't see anything. he can't see anything. so we've got a burrito from chipotle, taco bell, and qdoba and guy's going to taste each. >> let's go, sister. >> let's go.
here's the plate. here's the burrito. >> feed him. >> i'm not feeding him. you need another bite? >> mm. that's a solid burrito. i'll tell you right now that's not taco bell. zblr >> all right. let's do this. ♪ >> that's -- i'll tell you right now that's taco bell. i can tell by the girth. >> it is small. >> the girth. >> the girth. >> mm. all right. >> okay. >> the second one is definitely taco bell. so it's between 1 and 3. >> which tastes better and which do you think is chipotle or qdoba? >> the last one i like the best which if you go the guy adami
thing that means it's qdoba, which means chipotle was number 1. taco bell ghetto was number 2. sorry. am i right? >> you can take your blindfold off. you got it right. >> what does that mean for the trade? >> i don't know. but i'm going to run to the men's room. >> i'm worried about guy's system here. >> guy's a tough guy, but his system is very delicate. it's delicate like an orchid. tim seymour, what's the trade? >> i'll tell you the trade is probably yum brands and i think if you look at cmg i've been someone who says it's very difficult to support a 48 times multiple. if you look at the trading range the stock's had a nice run off the 610 bottom. you going into numbers you don't want to trade it from the long time. i think yum risk reward looks a lot better. there's an activist story there, a china story that gets better. my best fast food play is mcdonald's. i'm obviously a value guy and i think smnlds a turnaround.
>> d >> dan, let's get to options. expecting a big move out of chipotle. >> implying an 8% move in either direction. that's about 57 bucks. i think it's important to note the stock is unchanged on the year. but it just bounceoff of $600. rallied 13%. almost a straight line in the last two weeks. on average the stock has moved about 7% or 8% over the last four quarters. it's really important to note also that the last three moves after earnings the stock has declined 7%. this rally you that see right here could incorporate a bit of the good news. this is a stock that's trading 30-some times expected growth that's decelerating about 20% as far as earnings. so to me i actually think you've got to be a little cautious here. a lot of good news could be in this move of the last two weeks. >> for more "options action" check out the full show friday 5:30 p.m. eastern time on cnbc. coming up next on "mad money" tonight cramer's making a major call for a big pharma break-up plus jim gives his top picks to buy on a dip and which sectors you should avoid at all costs, plus cramer's giving you his
earnings insight in a monday edition of the game plan. all that and much more tonight on "mad money." by the way, guy adami's okay. got your first trade tomorrow when we come right back. stay tuned. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this. can a a subconscious. mind? a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit?
because it's so challenging, a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day. it's one of the absolute worst things to own right now. are you holding these stocks in your portfolio? i'm calling them out. plus facebook, amazon, netflix and google. what you need to do right now with tech stocks.
"mad money" is next! ♪ guy's making fine work of that burrito. finishing the rest of the qdoba, which is his favorite. no beans, though. that's key. beans. forget about it. >> not for his system. >> delicate like an orchid, his system. time for the final trade. around the horn. >> i'm definitely a seller of guy later this evening. morgan stanley, i think it's a case where the beat was a widespread one. very good business across all the key segments. and again, wealth management is now being run at a higher margin. don't be scared of the pullback p stop yourself at 3840. >> pete. >> love the pipeline of eli lilly. i think the stock will continue to go higher. i love what bmo had to say today, raised all kinds of targets. 92. i think it's going through. >> dan. >> verizon reports in the morning. i'm not looking for a big move in either direction but if i see the stock in the mid 40s i look
to buy it. i like that 4.5% dividend yield. >> did you finish that thing? >> no beans. i finished it. beans we've got a problem. we have issues. the facebook. >> questio >> yes. my mission is simple, to make you money. i'm here to level the playing field for all investors. 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 cramerica. other people want to make friends and i'm just trying to save you money. my job not just to entertain you, but to teach and educate you so call me at 1-800-cnbc or tweet me @jimcramer. it may not feel after today's action the dow gaining 18% and the nasdaq at 1.7%, but this week -- this week is a minefield. that's right.