Skip to main content

tv   Fast Money  CNBC  September 29, 2015 5:00pm-6:01pm EDT

5:00 pm
whether to run the company or get a ceo. >> you saw the movie. >> i was the only male in the audience. >> against the advice of my investors and others i chose not to do that. >> i wish we had more time. but thank you for joining us. tipped success in your book and career. >> read it. >> thank you, mike for joining us. "fast money" is up right now. melissa. >> thanks. "fast money" joins right now. overlooking time square, i'm melissa lee. pete najarian, steve, and guy adami are on the desk. tonight on "fast money." tesla's moment of truth. the first delivery of the model x is happening tonight and phil le beau is on the scene with the details. and google just announced something that could have other investors nervous. we'll tell what you that is later on. but first tonight's largest story. the largest stock in the s&p rolling over hard. shares of apple dropping 3% and
5:01 pm
it is lower. now negative on the year. question, did the market just lose apple and what could that mean for the selloff? pete, what do you say? because it was a selloff in the whole session. >> right. and including the early part of the day, this stock was in positive territory. and then we start to sink toward noon and the selloff begins. and you wonder are these folks with profits in certain areas and taking some of the profits off the table because they are getting hurt in other areas. i really didn't see anything specific out there. yes, google has a competitor, a phone that undercut apple. apple still owns the smartphone market. android is trying to make a push with the nexus. but i'm not sure that is the pressure. it is more panic from the market. >> i think you used the right word in terms of panic. if investors are selling this stock, with a load of cash on the balance sheet after the biggest weekend for the iphone s
5:02 pm
success what, is going on here. >> just remember how much investors lost this week. a tremendous amount of money in the market place. so this is a stock that uses a source of funds. and also investors are getting it wrapped around their heads that apple doesn't have the next new product to substantial growth. >> i don't disagree with david. and the news confirms the fact that the upgrade cycle is not what we saw last year. >> you don't think the record number looks good? >> it did not clue china last year. so $10 million last year in the first week and $13 million. and i don't think it was that exciting. and to replication the 25% year-over-year growth in iphone, i they they are not going to do it. they are getting used to the fact that the company is expected to grow in fiscal 2016, mid single-digits and where do you pay for a company like that. >> and that is the question we asked last week.
5:03 pm
>> i asked you last week and i said the same thing, mel. >> so what is going on right now. >> when you look at apple and say it has moved quite a bit. i'll give you that. but it hasn't moved as much as some of the other names in the portfolio. if you are going to make some sales, you are going to sell this to raise cash. >> what i want to know, if i'm an investor and i don't have apple or if i have apple and interested in adding to my position, is this a rerating or a source of funds where the sources are still in tact. >> can i dove tail. >> dove tail. tail that dove. >> go ahead. >> well let me try to explain. so august 24th was the day that all of the stocks printed at ridiculously low levels and they all came back. but that being said, a lot of the stocks out there are revisiting the levels and trading through them on the downside. the low print for apple was 92. the s&p is now basically back toward that level. apple traded $113 to pete's
5:04 pm
point today. i think a lot of people, source of funds, looking at a stock and say this stock printing $92 on august 24th and a lot of other stocks out there that are revisiting the low levels, if not trading through them, let's take advantage of the relative strength of the apple from that august 24th low. >> it is not just apple but tech names underperformance. facebook down, amazon down 1.6%. and google is on the defensive. >> it is incredible. they have blown $90 as a gift. it is an incredible story. it will keep moving higher. new york has the advertising week and facebook is the buzz at the new york advertising week. i'm surprised it is trading so low. and it is still a relatively cheap stock. >> and what would you say? >> it puts pressure on the facebooks and obviously apple as
5:05 pm
we talk about. but i think that can create opportunity. >> okay. >> i disagree with the desk in terms of they don't have a new product in terms of apple right now. >> you feel like that. >> and i do. and it is a hard wear refresh. and we know how well that does work. and moving out -- i think that could extend out the next year or more. and then there are other avenues. >> i'm ready to jump out of my chair right now. and when you say something like $90 below is a gift, that is talk. it is moving below your feet right now, people. forget apple it is down 20% from the recent high. the story is done. it is dead money. it is not -- so we talked about amazon and facebook and google. that is almost $800 billion in market cap right here. and aside from google,er talking about speculative value. that is not a gift here, people. i'm telling you. all of the stuff is
5:06 pm
incorporated, the sales week is in the stock. and when we go back to the october lows, this stock is going back to $80. >> the growth of the companies is tremendous and the opportunity, there is nowhere else, except biotech and we're seeing what is going on there. but i look at facebook and google. and it is cheap. i look at amazon and say when the market turns dan, and when it does, these names are going to take off. >> it is turning lower. it is that simple. >> i don't think this is a lasting phenomenon. >> guy, where are you? if the market is changing, then the ground under your feet, then watch out. >> well after a couple of weeks, the carl icahn comments we talked about. i thought 1820 would be a revisit and today was lousy. six months ago the rally we saw this morning would have continued throughout the day. we would have closed on the eyes given what we saw yesterday. my opinion. the fact that we traded
5:07 pm
unchanged on the day was somewhat disappointing. i think we can see 1820 in the s&p. what does that mean for facebook? probably means $85. or $103.5 or so in apple. we'll see when we get to 1820. >> $85 is on tomorrow's open. >> we have to move on guys. shifting gears. no pun intended. we're talking tesla. expected to hand over the keys to the model x and phil le beau joining us from california. hey, phil. >> hey, melissa. this is the day people have been waiting for. for a long time when tesla said we'll deliver the model x by the end of the third quarter of 2015, a lot of people said, hum, not sure that will happen. well we have a couple of days to spare but the first model x will be delivered tonight here in fremont, california. they are turning over the keys to a couple of bhodel x's -- model x's to the first two customers. this delivery marks the
5:08 pm
beginning of what will be say very important fourth quarter for tesla. and when you look at the model x, here is what is at stake for tesla. the beginning of an important ramp-up going into the fourth quarter. keep in mind that tesla, as they go the gradual ramp up into the fourth quarter, the model x is key to that. the starting price tag at under $80,000. basically the same price as what you have for the model s. although the signature series is as much as $130,000. tesla targeting 50,000 delivery this is year. not many will be the model x. there is the gradual ramp up in the fourth quarter but keep in mind they are on the same plant floor here in fremont, california. it is a quantum leap in manufacturing to go from manufacturing one car, the model s, to manufacturing the model x. and that begins now for tesla.
5:09 pm
it has begun over the last month. and we're here at the event taking place this evening. and by the way, when you take a look at shares of tesla, people are wondering is there much of a bounce coming out of the event. i don't think we'll see that much of a bounce. this is a stock that historically, even after we've had other events with the delivery of the model s or other versions of the model, we haven't seen the stock move higher but it will be interesting. we'll hear frommel on musk. and we'll have more on the "squawk box" tomorrow. but we'll have more here. >> thank you so much for that. phil le beau joins us from fremont. and let's talk about no bounce on the stock off an event like this. >> no bounce off the market bounce like this is disappointing. technically the stock did what we thought it would do. the fact it held 220 and i thought it would take out the $290 level. and i thought by now we would be trading north of $300.
5:10 pm
so how do you trade tesla here and now. pete will tell you correctly you do it through options but if you are long on stock, i still believe $220 is the line in the stand. >> carl lynn rich from oppenheimer has a buy rating on the stock. great to have you with us. $340 price tag so you are pretty bullish on the stock at this point. in terms of execution, is there any risk going into the final quarter, when finally it is making two cars at one time, are you concerned that when it goes full capacity to factory there may be some issues? >> i think there will be issues and i think that is built into the expectations for the company and our expectations for the stock and in the final quarter of the year. i think the stock is already assuming some success with the model x and what is at stake is the development platform as well as the rollout as the stationary product this year. >> do you have a sense, now we know the starting price,
5:11 pm
$80,000, of what the maeshlgs will be -- margins will be like on this vehicle. >> it should be similar to the model s. as they scale up. we should see 30% plus out of the platform. we won't get that for several quarters until they ramp up. so out grate we'll see drag on the gross margin and that is priced in the stock here. >> and how confident are you about two years where they own the market because audi is not coming out with the evs until 2018 so how important is it for tesla to gain a certain amount of market share or sell a certain number of vehicles before the competition officially comes out. >> we have the ramp up to 80,000 vehicles by 2019 which is half of the market globally. i think they have a shot of doubling that and maybe better and much bigger portion of the 500,000 vehicles. so we're looking at this vehicle being 20% or less of the total
5:12 pm
sales of the sales. and so i think they have an opportunity to overshoot that and we'll find out more about the car tonight and how long the legs are on this thing. >> colin, great to speak with you. colin rush of oppenheimer. $340 price tag. it initiated in september. we should keep that in mind in terms of the 12 month. pete. >> we have to wait until tonight until we get more numbers but i think guy brings up the technicals and it is important and when you look at the stock bouncing off the 220 level and went through the 50-day, around $250 a share. we close at -- $246. and i think when you look forward to 2020, i'm amazing people can give projections on -- >> the 2025 -- >> i agree. it is staggering that we're looking at those kind of numbers. >> i think it is about execution. this is another check the box for delivering this car at this
5:13 pm
time and it is a positive step in a good direction. the valuation is high but i think the stock will continue to work over time as long as they continue to execute. that is the most important thing. >> coming up. on the street today, a couple of the calls didn't make the grade with our traders and we'll tell you which ones after the break. plus, you tube making a change in hours that could have implications for twitter and facebook. we'll explain what that is later on. and shares of mgm falling 10% and the ceo will tell us what people don't understand about his stock. that is coming up on a very busy "fast money." stay tuned. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
5:14 pm
5:15 pm
i'm a senior field technician for pg&e here in san jose. pg&e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. raising a family here in the city of san jose has been a wonderful experience. my oldest son now works for pg&e. when i do get a chance, an opportunity to work with him, it's always a pleasure. i love my job and i care about the work i do. i know how hard our crews work for our customers. i want them to know that they do have a safe and reliable system. together, we're building a better california.
5:16 pm
welcome back to "fast money." let's get to our big story developing here in the after hours session. ralph lauren is stepping down as ceo of the company that shares his name. the 75-year-old will stay on as executive chairman and chief creative officer which means he'll still be the lead designer. gap's old navy stephen larsson will be the ceo. shares are higher by 5% in extended trading. gaap is down 3.5 hour in the
5:17 pm
session. they said the company has to change. and it happens on a day when the stock hits a 52-week low and higher in the after hours session so maybe what he says rings true. >> it is never a good thing when the ceo steps down and the stock is up 5% in the after market. the market is trying to tell you something. >> is it? i would think it is a good thing for the stock, for the ceo. >> for the ceo. >> okay, fine. >> but for the stock, though, and given this $190 stock at the beginning of the year. i'm not saying it is cheap in terms of valuation. but what i am saying in terms of cataly cataly catalysts, you could get long for the trade. >> i think ralph lauren will still be long -- >> the apparel names. like a ralph lauren. the ones that will win are the megacap names with distribution and the ability to get some sales generated through amazon. i think amazon will start eating the lunch of macy's and ralph
5:18 pm
lauren and i say for the long-term is still in a very difficult position. >> a number of upgrades in today's session so we asked the traders to grade the upgrade. let's kick it off with mcdonald's. a comp sales trend starting to turn higher. steve, what do you make of that? >> in a relatively short period of time, since march, i give him credit, he's working to get a business plan to work and get the momentum going. the stock is performing really well. i want to see more before i jump on board here. i give him a "b" for his rating. i know they have an analyst day on the 10th. i don't think there is anything shocking coming out of that. that will be a needle mover for the stock. people want to see a meaningful sales turn. that is what i wan to see before i jump in head first. i think it will grind up. $105 is a difficult level to get to. >> october 2nd is also the
5:19 pm
earnings. and you are a fan of this one. and saying that consensus thinking doesn't incorporate same-store sales that are going to happen and happening now. >> and they talk about the asia market and same-store sales there. i still wait for easterbrook to say we're going to attack this menu and reduce it by 70%. they do something like that, i think mcdonald's is off to the races. until then there is the put beneath them and holding the stock around $90 or low $90s per share. >> the company is saying they are well positioned for growth and, guy, it has been an underperformer compared to other staples today. >> we're playing the upgrade. and i'll tell you why. because they took it to a buy from a hold. what does a hold mean? if finer man was sitting on my right.
5:20 pm
>> you are grading -- >> well that is fub. don't yell at me. i'm just making a point. >> these guys have an impeccable balance sheet. 15 times forward earnings and three different businesses and the consumer products business crushes and plus they will make an acquisition so given the tract 3.5% dividend, i like the upgrade but i don't like the hold. lose the hold. it is either buy or sell. >> it is an in between. >> i'm not a purgatory guy. >> i don't think it is always a buy or a sell. [ overlapping speakers ] >> you're going to hold it because you are looking at this company, that as you are waiting for more information. >> you think j&j is a buy. so you agree in the end. i don't like rate inflation. give it whatever you want. any way -- go pro, finely, initiated into a buy. the firm is having strong growth despite hurdles dan.
5:21 pm
>> so i give the initiate a b. and i'll tell you why. >> everybody got a b. >> i think stocks like this are in liquidation mode. it is down 50% since the start of august. so something is not clicking with investors here. for this guy to come out and say this is a buy. i'll tell you why. they have one new product, the q4 for the holiday season and you have to look out to 2016. so right now, if you believe the estimate is expected to grow earnings at 15%, sales at 20% and trades at 16 times the expected earnings it doesn't seem expensive. if you believe in the product and nick woodman and think this thing has a runway. i'm not sure. i expect the stock will trade at the 2014 ipo price at $24 in the next few months. >> that sounds worse than a b. >> we're grading his grade. so if i'm new to the story and he's trying to advise clients,
5:22 pm
he thinks it should be worth $45, for me that is an okay. >> was that a ferret or a squirrel. >> that video gets an a-plus. >> how did it learn how to water squee like that? did you see the life jacket on him. it was adorable it. looked like steve. >> anyway, biotech stock. you do that in nature. biotech hitting hard but the ceo said that is perfectly normal. we'll hear from him later on in the hour. you're watching cnbc, first in business worldwide. here is what is coming up on "fast." >> that is how investors in casino stocks feel. the ceo of one of the largest will explain why it might be time to double down. plus -- king carl has a warning for investors. >> high yields stands for junk bonds. >> but there is a bitter irony even he doesn't understand. we'll explain when "fast money" returns.
5:23 pm
5:24 pm
5:25 pm
google chasing online and e mersin veiling a new ad this afternoon. julia boorstin joins us on set with that. >> hi. great to be here. and they justin veiled a
5:26 pm
shopping app designed to turn into a digital short fund. an ad would appear in the corner, like a little button and when clicked on, the video will drop down. another click will take you to the retailer's website and they are only paid when you go to the retailer's site. and you tube is joining facebook and twitter and pint rest who are trying to make it easier to buy directly from their social platforms. if it works this could mean a difference in ads. and the question is whether people feel comfortable buying from these platforms, to take out the friction. >> it sounds like a greatoid yo. do the people who post the videos create a cut so it creates more loyalty. >> that is the idea. people are going to you tube. you tube said the number of videos and videos about products increased 20% in the past year. so people to go you tube to
5:27 pm
figure out what to buy and this year one of the you tube stars who makes money by selling things, this could be really good for you. >> are there any estimates as to what this could mean? >> it is still pretty early days when you look at the sort of commerce stuff. but it is all about the future of e-commerce and everyone is trying to get into it. people are buying things online and now they want to make it easier to buy things on your mobile device. so if twitter and facebook can get you used to that, google wanted to be in on that as well. >> and there was the discussion how amazon like ralph lauren could go back to their ad and you could click through the retailer site. you won't click through to the amazon site. >> no. i understand. i don't think it will change. we're seeing a $200 billion shift in ad revenue perfect tv to mobile. it is an incredible shift. so i think, look. is it something that will move the needle? maybe a small margin but i don't think it will infringe on the
5:28 pm
shift occurring right now. >> certainly it seems if anything it is more reason to try the new formats. >> what would you trade here in. >> well, google, i heard the term defensive and cheap and heard a lot of stuff. and google was trading at discount at the market for a year before it broke out and now it is coming back here. so we are in a different world order, people. what is not defensive, nine ads. they are not a source of revenue. so if you think this company is cheap, i think that the range is supposed to go 17% from 13% this year and trading 21% now and 18 next year. it is not cheap if things slow down. so you can use terms like defensive but i wouldn't use it right now. >> i have people tripping over themselves to invest. to put ads on facebook and google. everything shows it clearly. there is a big pile of money moving from tv to mobile.
5:29 pm
>> i don't think he is disagreeing with that, but in terms of the stock, it is not working right now. and facebook this week, for advertisement, you tube was the buzz. >> this could step in and get a cheaper valuation, no doubt. >> julia, thank you. >> two nights in a row. that is like winning the lotto. >> totally. >> which is by the way -- powerball is like 300 and something. >> still ahead, one dow component is below the flash crash throw and could spell trouble for a sector. we'll tell you what that is this hour. and jane wells is live in vegas talking to the biggest name in the casino business. hey, jane. >> reporter: hey, melissa. we're going to talk to the biggest player on the strip and the new kid on the block who spent millions to get here and not billions. they have two different very stories. we'll have that next live from the tropicana when we come back.
5:30 pm
5:31 pm
5:32 pm
welcome back to "fast money." markets trying to rally but leaving most of the gains for the dow ending up about 50 points and the s&p ending slightly higher but the nasdaq is down now 5% for the month of september. in the second half of "fast
5:33 pm
money." carl icahn asounding the alarm but his message could contain irony and we'll explain. tech stocks failing to make a rebound. with you one sees major opportunity and he'll explain. and there is appreciate with some of the biggest operators for casinos, like wynn resorts and mgm has seen big losses. but jane wells is live from the best place in the world to get the pulse of the casino industry, the global gaming expo in las vegas. hey, jane. >> reporter: hi. i'm actually just down the strip at the tropicana. speaking of carl icahn, he owns penn national that owns the tropicana. but that is still empty. we're going to talk about two companies with two different stocks so far. in the one corner where i am right now, tropicana owned by penn national which bought it out of bankruptcy for only $360 million. but why?
5:34 pm
it has been fine being on the strip. the stock is up double-digits. but the ceo said they need the property for the 3 million loyalty members that come to investigati -- vegas and stay at the competition. >> through the rewards program, i know the power of feeding las vegas with customers coming here any way. so we think can he can take the property and take advantage of the data base and improve the earnings significantly. >> now willmott said they were thinking about pursuing asia or maybe vietnam or japan and boy he is glad he didn't do that. and mgm ceo called it is ugly but thinks macau will turn positive next year. but over all las vegas is down this year. but some properties are exceeding expectations. quote, october is going to be a monster and the company is spending $400 million on a new
5:35 pm
arena. >> i would bet a lot that we will get a hockey team, a professional hockey team and i bet we'll know by the end of the year and i bet it will play in the brand new arena that aeg and mgm is building. >> all right. right now on, we ask if it will be a reit and i bet yes. and he talked about the presidential election and who he likes, not trump. and why he is suing the governor of the home state of connecticut. back to you. >> all right, jane. in terms of macau, how rebust of the turn is going to be and is it specific to his properties or macau over all. >> he said over all. as comps get better will firm and bottom by the end of the year. he has a new property opening next year and wib does as well and he thinks 2016 will turn positive.
5:36 pm
melissa, he said for the first time the macau government is sitting down with all six operators as they map out what they've done so far and where they are going. and he met president jinping last week and after the dinner at the white house he felt much better that the central government is serious about macau thriving as an entertainment site. >> that is interesting. jane wells, thank you. joining us from las vegas. and casino stocks are bad as of late but the biotech space has been an absolute bust. are we going to talk biotech right now? >> i think we're talking about -- >> let's talk about wynn real quick. it has been an angry show and dan has taken the brunt. but he is spot on. $50 right now. >> i believe him. >> you believe that he believes it. >> and i'll tell you this, and wynn and we talked about this $10 ago, this stock has not bottomed yet. you know when you see 15 to 20 million shares.
5:37 pm
and the bad news for them in my opinion, the dividend yield is going up for the wrong reason. it is going up because the stock is going down. at some point are you worried they cut the dividend. so wynn, everything is going wrong at the exact wrong time in the market place. i still think there is a down side in wynn. >> let's see who is the best. and we're playing a game called hit me with chris, let's start off with mgm resorts, off more than 16% year-to-date. do you hit, stay or fold here? >> i hit. >> why? >> i'll tell you why. because 60% come from north america and on the las vegas strip, as you saw the optimistic views for the las vegas strip. so you continue to be heavily exposed there. and continue to build out with the arena and see deleveraging there as well.
5:38 pm
and more importantly they have an option on macau, 2016 i think will be better times ahead for these guys as well and decent exposure to the market but not overwhelming so i think this is the one to play. i would get in the market today. >> next up wynn resorts. up about 64% and macau continues to slow. you heard his rediction, what will -- prediction, and how he met with president jinping last week and so on wynn, do you hit, stay or fold? >> i know it is against opinion i'm going to hit. at $50 it is too good to be true. i don't think this is the same thing as 2008 and 2009, certainly not as heavy leveraged. and the balance sheets aren't connected. if you see the challenges in mcka, it will not drive down north america business. 60% does come from macau but i don't think it will go to zero or anywhere close to zero.
5:39 pm
so i think you could be in for a couple of rough more couple of weeks and take until the end of the year but at this point you want to own the opening of the casinos and we've seen that over and over again and wynn is the best in class operator and he'll take share of macau and that is where you want to be. >> and last up, scientific games corp which makes gaming technology for casinos and lottery. down 15% so far this year. so chris, hit, stay or hold. >> i hold on scientific games. the structure of the balance sheet, and stocks, a significant amount of debt leverage on it. the easy money on that stock with a quick path to deleveraging which i don't think will happen by the end of the year and i think that is what has driven down the stock. i think you need to see this market and considerable deleveraging and i think they are challenged to do that by year end. from an operation perspective, they are world class but i think that leverage dynamic is going to weigh on them for the near
5:40 pm
term. >> chris, thanks so much for joining us. jis jones, from union gaming. playing hit, stay or hold. >> that is the first way we played that game. >> and he did well. he stuck with the options we gave him. and to recap, mgm and wynn were hit me and scientific games was hold. -- or stay i should say. what do you say, pete? >> would you be a stay on wynn. and do a potential hit-me with mgm, depending on the exposure of north america versus the asia markets right now. wynn is scary, because we talk about 2016 and the openings, that is still a little ways away so you want to wait on that. >> i'm a hit on mgm. i agree with that from exposure perspective. but i don't believe in any of the names. >> with wynn, i don't know how you take share in a market declining 35% every month year-over-year by adding casinos.
5:41 pm
so wynn could win if they blow up some of the casinos. and i think this could bottom out. and i don't think you need to catch a falling knight. i don't know why it can't do so on the down side. >> he's sitting on the 18 with win. and i don't know what that means but i'll explain it to you at the break. if he said $10, i would be on the same way. chris jones, the analyst we just had on. >> while casino stocks have been a losing bet but biotech sector is a bust. but falling again today. it is down 30% from july highs. wilber punk ert hassan weighed in on the meltdown earlier today on power lunch. take a listen. >> we have seen a tremendous increase in the value of biotech stocks over the last six years compared to the sppd and once --
5:42 pm
s&p 500 but over all the biotech stocks have done well. it has been a great run. >> and he is a member of the board of am gen which is getting crushing like the rest of the sector. is biotech truly broken. i'm not going to you. i know how you feel. how about you. >> i think some of the names are buys. >> some of the db's. >> you know me. i'm not an etf type trader. i think part of the reaction, quite frankly, is the lack of liquidity in the ibb has caused other names to get sold off unjustly. whether it is celgene or am gen and gilead and i like all of the names. >> you like them all. pete. >> i agree with what he just said. the etfs are knocking down the stocks. right or wrong. is this a normal correction? no. there is nothing correct about
5:43 pm
it. and congress sent a letter to valiant and the stock was down 18%. there is nothing normal about that. celgene is cheap and so is am gen and gilead. that doesn't matter because people are in the shoot first and ask questions later. the biotech index is where it traded down to yesterday, that was the low. it is right there now. i don't think you can buy the stocks until the cell gene report on the 22nd of october, i believe. wait until then. >> still ahead on "fast money," carl icahn sending a warning about one market. what has the hedge funder so worried and whether you should follow his advice. need to hire fast?
5:44 pm
5:45 pm
go to and post your job to over one hundred of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. and now you can use zip recruiter for free. go to
5:46 pm
the high yields really stands for junk bonds. people are buying these, not really understanding what they are buying and if you just look at the numbers, they are amazingly risky. you have $2.2 trillion of junk bonds up five years ago, up a trillion dollars. that is a hell of a lot when you think about the whole s&p is only 90 trillion. but wall street does what it does best. it sells securities. >> that was hedge fund heavy weight carl icon in his new avant guard video. he talked about junk bonds as he
5:47 pm
described as a risky investment pushed on by investors on wall street as well as the etf industry. we've been talking about high yield and what this is telling us for a long time. that is basically the point. the canary in the coal mine. >> it is a great put. i would tell you that brian kelly who sits on this deck from time to time has been saying the last thing for the last six months if not longer. when carl says it is news, people have been saying the same thing. hyg, the high yield etf. trading around -- i think it made a 50-week low today. in my opinion it is critical that it holds $82, which is where it was. we talked about that last night. but everything that carl said, he is not cracking any new ground here respectfully. >> no, he is not. if you believe what carl icahn says, does that make hyg a short. >> i think it could go lower and there is an energy component that is dangerous right now.
5:48 pm
the borrowing has been compressed. >> the energy component. that is why the irony is. in his video, he said people are buying into the market without understanding what they are buying so we thought we would tab a look inside of the high yield bond which is down 6% in the last three months. seema has the details in the newsroom. >> that is right. retail investors get exposure to the high yield or junk bond market through the etf and it is called the hyg. that atf hit a full year low today as the market has tumbled. and a look inside reveals why. over 12% is comprised of bonds issues by energy companies. we all know what happened to oil. and for credits, top holdings is aca. t-mobile at #.9% and allied football and tenant health care
5:49 pm
and sprint communications in the top five. and hyg holds separate bonds issued by carl icahn enterprises and that is debt issued by his company, which is ironic given that the activist investor has warned about the danger of the high yield markets. melissa, back to you. >> seema, thank you. seema wrapping up in the newsroom. so not only is iep debt in hyg and as seema pointed out, energy is a big component of hyg. and what are biggest bets, the energy and materials sector. so this is ironic about the guy warning us about the dangers here, right, pete. >> and he is putting huge bets on cheniere and lng and freeport macmaran. and i know dan sees the same thing i do as we look at the
5:50 pm
market options. if you look at fremont, there has been some gigantic put-buying for a while now, fighting against folks trying to pick the bottom in that area. u.s. steel, huge put-buying in that. so there is the retail space and energy space and huge buyers down side as well -- >> maybe he is long the stock against being short all of this debt. this is the message that he's sending here. and so i'll just say, if you want to look at the hyeg and speaking to risk aversion, to me wall street a warning bell that has been screaming in silence all year long here. and it is putting it together. the name of the video is danger ahead. i'll put my money with carl. you want to talk about aip or whatever his fund is called, he's probably doing something smaller than we've been doing. >> well the stock is terrible. $140 stock at the end of 2014 and a $66 stock today. a stock that is in dire need of
5:51 pm
an activist, ironically. >> also another layer of irony in this story. all right. do not miss the man himself joining scott tomorrow at 12:00 p.m. eastern. hopefully we get to the bottom of all of these ironies here. coming up next on "fast money," which is below the flash crash low. it will surprise you. you're watching cnbc, the first in business worldwide. sure, tv has evolved over the years.
5:52 pm
it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv.
5:53 pm
ahh... steve, other than making me move stuff, ces. 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
5:54 pm
of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this. i'm seema mody with a market flash. the barracuda networks falling in after hours trade. the storage company reporting sales below wall street estimates. and reporting weak guidance on the analyst call. guiding $0.08 to $0.08 versus the $0.10 estimate and that is what investors are focused on. it is down almost 19% in after hours trade. >> thank you, seema. and these stocks are taking to the wood shed. and they are trading lower in the after hours, paltrow alto is down 16% since the all-time high
5:55 pm
of $200. and the cyber security names are the next biotech space. it feels like that is what people are doing. so sell first and ask questions later. i understand valuations are ridiculous in this space. and i understand it is one of the most important industries out there right now. i'm not sure if you get back in, but if you do, panw is the one to buy. >> and dan, what do you see? >> total option volume, 1.5% times the average daily put volume. and this is a stock showing low relative performance to the broad market and the peers. if you look at the one year chart it topped out a couple of months ago. it is down 11% on the year and down 22% from the highs and today it held at about 171.5 and that was the flash crash low that it bounced off and it bounced there about a year ago. and when you look at goldman sachs, it is in the uptrend
5:56 pm
since the debt crisis in europe here. and look at the move right here, it just broke below it. so the underperformance, investors as we look out to q3 earnings and q4 guidance, that the fed will not raise rate, we won't have that steep yoke, they are coming out of the financial bets. and one more point and this is important, and there is speculation of who won and lost in the volatility bout. we know goldman is savvy about this stuff so we probably won't have answers for a couple more weeks. >> thanks, dan. for "options action," check it out on friday. coming up next, what the traders are watching tomorrow. stay tuned. romantic moments can happen spontaneously, so why pause to take a pill?
5:57 pm
and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to
5:58 pm
5:59 pm
time for the final trade. around the horn. >> disney is trading from $122, under $100 a share. i think it is a buy under 100. >> steve. >> i know the ibb has sold out and biotech has sold off. i'm standing by and i have faith in the industry. buy the ibb here.
6:00 pm
>> and risk reversal. >> but i think you wait until it hits $80, soon. >> we'll see if ralph lauren holds the gains. sorry about that ralph, rl. >> thanks tomorrow at 5:00. don't go anywhere. "mad money" with jim cramer starts right now. 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. 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. i'm just trying to save you money. my job is to entertain you and call me at 1-800-743-cnbc. guess what i've been a bear. this market is


info Stream Only

Uploaded by TV Archive on