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tv   Fast Money  CNBC  February 19, 2016 5:00pm-5:31pm EST

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your attention. treasury secretary jack lew meeting with puerto rico bondholders including some names that you see there, kyle bass, steve rattner and steve with sdwhartsm schwartzman saying all needs to come to the table. so much to pack in. that does it for us on "closing bell." hand it off to "fast money" which begins right now. "fast money" does start right now, everybody. live from the nasdaq market site overlooking new york city's times square. traders on the desk are tim seymour, brian kelly, dan nathan and guy adami. tonight on "fast," the biggest controversy in america just got bigger. both the white house and donald trump turning up the heat on apple. will the tech giant cave? should they cave, and what could it mean for the stock? a special report. two dow stocks could be signalling a big selloff on the horizon. we'll tell you the names and why traders are so they are vows, and the man, the myth and the legend. richard branson, that's sir richard branson to you.
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he joins us as he unveils his new rocket ship that can take you into space. first, we start with the market's best week of the year for stocks. the s&p was up almost 3%, stabilizing on the last two days, but there are two big questions facing investors as we head to the weekend. are we out of the woods yet and who is in charge, the bullets or bears, tim? >> nobody is in charge but the onus is on the bears to say china is about to blow up. oil is going to 18 bucks, that the u.s. company is heading to mass recession when in fact we've gotten better data. it's not great, never told you it's great but to me the people who say the world is coming to an end, all the things, the confluence in the first week of the year that suddenly the world was such a bad place. >> wait a second. data has gotten worse, has gotten worse. lock at auto sales declining. look at what they have said autonation, what they have said. look at what's happening with diesel demand, oil, okay, had a little bit of a rally back. >> jobless claims are holding up. >> jobless claims is a lagging indicator. >> jobless claims is a four-week
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average. >> and it's starting to go back up, starting to trend up. it's starting to trend back up and the jobs number, exactly what's wrong. the fed is using the wrong model. >> is it going off the cliff? >> the rest of the world is. >> so the data to me has done nothing different -- >> i agree? >> does ton nothing different except gotten worse. >> the u.s. data, we'll get durables and housing data, housing market continues to hold up. we -- wait, wait, wait, we had a horrible housing data. >> i'll bring in the other side of the desk here as you two squabble. >> please. well, tim is obviously a bull here. he's been on top of this, and to his credit ovx went from 81. it's now 62 which indicates that maybe oil has bottomed and oil has been the indicator and i think the onus is not on the bears but the bulls. has to get above 1950 on the s&p. prove themselves above there. not close yet. a couple closes i'll be in tim's camp and until then i'm in
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b.k.'s camp. >> saying the onus is on the bulls doesn't mean you're bearish, just need a couple more things to prove the case. >> where i kind of weigh in is i don't think that there's too much data here in the u.s. that's gotten incrementally better. maybe it hasn't gotten that much worse but my contention would be that if the market is going to continue to go lower, we're in a massive dunn trend for all the major indices here in the u.s. oil, you can call a bottom if you want. could have called it every time, you know, over the last six months, but it hasn't bottomed. still in a downtrend. what's going to take the u.s. lower is not going to come from inside. it's going to come from outside, and the only thing i'm going to thread one needle here is look at the way our u.s. banks have acted off of the highs, you know. we have many of them off 35% over the last six months, off the 52-week highs. they are not down because the capital ratios anything going on evil here. they are going down because what's going on because of what's happening in europe or going down in europe. >> no, they are down because their earnings are down. >> we knew that, tim. i understand that, but actually
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the results weren't so horrible, and they started going down ahead of that, okay? so a lot of the positioning into your end had to do with the fact that the fed was going to raise fed funds by 1% by the end of the year. >> cpo curve, blah, blah, blah. >> when market volatility happening, nothing economically, market volatility then the feds said the hikes were off the table. >> think about what volatility means for the banks, liquidity issuances tighten up, banks, that everybody thought was really, really cheap, not so cheap on an earnings basis. cheap on an asset basis but cheap for a long time the wrong reason to buy a bank. you want a bank if they are going into an earnings kind of trajectory. >> the banks are not a buy. >> banks are not a buy but banks are not falling apart because the seaworld falling apart. banks are trading down aggressively. >> i fundamentally disagree with you because what's going on in asia, we're seeing tighter credit conditions. >> yes. >> that has the potential to spill over. it's obviously spilled over into european markets, and it's at
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least spilling over at least >> what does spill over mean? >> look at the price action. >> i get that. >> look at some of the stuff that we've seen that jamie dimon feels like he has to support his stock, that deutsche bank feels like they have to buy debt back it's gotten hit so hard. >> why not, be opportunistic. >> the reason it's getting hit so hard is because things aren't good. they are exposed to the whole commodity sector. let bring it back to the u.s. look what deere said, the second quarter in a row they have had horrible earnings. >> stock is up on the year, by the way. >> john deere is up on the way. >> down 30% last year. >> it's down from $100. down 30%. this is a volatile market. >> let me put this question to you. everybody is acting as if the banks definitely have exposure to the commodity space and what i don't get while is it that every earnings call we've had they said the exposure was minsnowfall why would they lie? >> mortgage-backed securities,
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the thing is -- mortgage-backed securities -- >> hold on a second, credit related to emsecurities and the deal by samsung, the deal that blew up and high yield to energy, the worst of them, not exotic. we're talking about standard debt deals. >> they are talking about -- >> derivatives and the credit issues face the energy issue. >> there's tons of derivatives in the energy area. >> you mentioned cnbs, mortgage-backed, a totally different environment. >> i would agree with you it's a different environment in the sense that the u.s. banks are not necessarily falling apart and the system isn't ready to come to an end. however, you have this domino's effect. we're still interconnected as an economy and when you have a fractional reserve >> where do you stand on what the bank ceo told investors and america versus what other investors believe? >> it's the same rhetoric -- i'm not suggesting that we're in '08 but the same things you heard. deutsche bank has gone from 35
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to 17. something is going on. i don't know what it is. i don't think anybody is. >> the bank is less profitable and may need to have a capital raise. >> been cut in half and i think it's bigger than that. i think they definitely have -- it's the largest derivative book, b.k. can speak to this, in the history of drive tir book, something is going on. >> the derivative book is bigger than world gdp. >> these guys are saying there's a mass blowup that will be a domino systemic effect on the world and i don't agree. a very aggressive statement and i don't agree with that. >> i want to get to actionable information because everybody -- nobody on this desk is a buyer of banks no matter what your view is. what are you buying? >> materials is where you start to add a one-third position. newcorp announced the end of january the stock is up on the year as well. upstream and downstream business is change, seeing some demand. fighting the steel dumping in this country, and they are going into a value-added chain. you pick stocks in this environment. a fantastic balance sheet, 2
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billion in cash and 100 billion credit revolver. don't buy the full position, buy a one-third. >> i would only buy one-third because you're going to get low levels to buy the next one-third and the next one-third. >> that's a good way to trade. >> if you tune in at 5:30 to "options actions" -- >> so you're selling. >> i wouldn't take down oa? >> he's down the other side of tim's long. >> i don't like the bounce that weave seen in materials for a whole host of reasons. we'll do that in the next half an hour. if you're telling me that this is a company, newcorp, that's well capitalized and, you know -- >> i am. >> then pick a stock and have a ball with it. i'm just saying, have an opportunity. >> what did you guys buy? >> i think the bounce in materials is exactly that, a bounce in an oversold condition. i think the cold market is still trying to at least tell you something. i think the bond market continues to show that it wants to go higher, yields go lower.
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i think tlt is still the play in this environment. >> coming up, apple facing mounting pressure from the government and now from donald trump calling for a full boycott of its products. will they be northed to give in? you've got the late. plus, it wasn't just apple that donald trump was talking about. he made some interesting comments about his favorite fast food chain last night, and it happens to be a name many of the traders on the desk own. we'll reveal what it is next. and it is the race to space. the last time richard branson was on cnbc, here's what he said about elon musk's spacex. >> our space ship comes and back and lands on wheels, theirs don't. >> so what will he say next? he'll be here in a live interview at the bottom of the hour. much more "fast money" still ahead. vo: know you have a dedicated
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man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems.
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welcome back to "fast money." the pressure is mounting for apple as the white house is turning up the heat. eamon javers joins us with the latest. >> the legal battle is heating up between the u.s. government and apple over the access to the terrorist iphone. here's the motion filed by the department of justice and want apple to follow the court order
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and unlock that iphone and apple doesn't want to do it. there's very tough language in the motion to compel. a's current refuse al to comply with the court's or the despite the tech dal ability of doing so appears to be based on its concern for its business mott el. very tough stuff from the department of justice. meanwhile you had on earlier john mcafee, the security software pioneer. he is rallying to the defense of apple. here's what he said. >> really, what the government is asking apple to do is to make individual who uses an iphone susceptible of hacking by bad people, foreign governments and anyone who wants. not just the fbi. the fbi says oh, well we can keep it secret. that's utter nonsense.
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>> over at the white house they are back up the fbi and josh earnest speaking from the white house podium said so today. >> the president has made that investigation a top priority because he wants to make sure that we can learn everything we possibly can about that situation so we can take the steps needed to protect the country and that's exactly what fbi verdictors are doing. >> speaking down in south carolina, donald trump is on the campaign trail saying he's calling for a boycott of apple products. he here here's donald trump on the campaign trail. >> boycott apple until such time as they give that security number. boycott a. first of all, the phone is not even owned by the young thug that killed by these people. the phone is owned by the government, okay. it's not even his phone. we don't even have to go that far, but tim cook is looking to do a big number, probably to show how liberal he is. >> now, melissa, to follow up
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here, what donald trump tweeted out is that he owns both a samsung phone and apple iphone. he says he won't use the apple iphone until apple complies with the government request. a two-pronged battle going on at the highest levels and a public relations battle here and a political battle with trump now weighing n.seeing a lot of different angles to this and it seems to be heating up. >> thanks for keeping on top of this. eamon javers in d.c. amazing to think that president obama and donald trump are on the same side of an issue he here. >> crazy, talked about it the last couple of nights. this will be a political thing and here's donald trump. apple loses -- it's a lose-lose situation. >> is it? >> they acquiesce, they upset their current user base. doesn't it team like almost vaulted this into the public.
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>> so much public grandstanding and everyone is doing it, even the white house. out on the street doing a poll for "fast money" what they thought and we're in times square here where we get domestic folks and a lot of international folks. all the international folks to a "t" said go with the government, they absolutely have to protect. people were somewhat split. people loyal to apple in one breath said they want to protect me and my privacy as a consumer, but also said, you know what, i think the government is right here. any weigh, anyway, it's an issue where people get both sides. we don't have to be doing it in a public forum. >> isn't that how apple it say it. we stood up for you, the customer. the government forced us to do it. >> the best of both worlds actually for apple. >> i think it's a win-win situation for apple. >> so apple is a company that has $190 billion overseas in cash that they would love to repatriate at some point in a really shareholder friendly way.
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i think apple should have to tim's point really tried to figure out how to do this not in the public realm here, and i think that this is a situation that they could have the government on their butts for a very long time. think about when microsoft had the justice department on their duts in the late 1990s, it didn't go away for a long time >> so i think it's a lose-lose. >> didn't mcafee say -- >> he would unlock the one iphone, he and his team have the capability of doing that in three weeks and he's offering the services to the u.s. government for free. >> so if mcafee can do that, can't apple do that? i mean, i'm not willing to, you know, say who has better technology here, but if mcafee can do that, apple can do it, and, therefore, they won't do that. do it to one phone, they are basically going out there saying we're going to defy the u.s. government. >> he's living in parts unknown so god only knows what he's capable of. >> you said one-win. i said lose-lose.
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they acquiesce, they up set the user base. >> does that impact the okay? >> if it's lose-lose -- >> we talked about it a couple nights ago and said it could impact the stock and started with donald trump getting on this. he'll not let this go and i think it does impact the stock. >> now that the situation has evolved. >> here's what it does for the stock. creates a whole lot of uncertainty and you won't get somebody come in aggressively buying the stock, $92, very key level. not saying it necessarily goes down, but in the markets when you have that level of uncertainty, people just tend to stay away. this game is hard enough. why would you try to play that now? >>till ahead, next week will be a huge test for retail stocks as investors gear up for earnings but there's one name looking really vulnerable. what it is and why you might want to stay clear. i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. meantime, here what else is coming up on "fast." >> the best pilot i ever saw. >> how about richard branson whose quest for space is fast
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becoming a reality. he'll join us in his "options action" debut to explain. plus, where does the donald like to dine when he's on the road? here's a hint. >> big mac, fillef, happy meal, mcnuggets, larger sizes, now a chef or garden salador oriental. >> but he may need some help with the menu. we'll explain when "fast money" returns. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding the owners were forced to place an emergency order of hay. thankfully, mary miller banks with chase for business. and with a complete view of her finances, she could control her cash flow, and keep the ranch running. chase for business. so you can own it.
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breaking news out of the uk. let get to seema moody. >> reporter: leaders in the european union striking a deal with the uk after two days of negotiations. prime minister cameron addressing the press in brussels saying this deal is enough to recommend britain to stay in the eu. listen in. >> this deal has delivered on the commitments that i made at the beginning of this renegotiation process. britain will be permanently out of ever closer union, never part of a european super state. there will be tough new restrictions on access to our welfare system for eu migrants, no more something for nothing. britain will never join the euro and we've secured vital protections for our economy. >> what happens now.
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prime minister cameron will return to london to present this deal to his cabinet tomorrow. we'll see if it's enough to satisfy his counterparts as well as citizens. we'll know if it does in the upcoming uk referendum which could happen as soon as june of this year. melissa, back to you. >> seema, thank you. tim, what's the implication? >> that european politics are getting more politics and europeans everywhere to have have a scene phobic approach in their countries and polar politicization of the views, it's not just year. >> donald trump talking about fast food and a question of what he orders at mcdonald's, take a listen. >> fish delight sometimes, right? >> the big mac great, the quarter pounder with cheese. >> now in case you didn't hear, that the first thing he said was fish delight so we actually reached out to mcdonald's and asked if there was such a thing as a fish delight. we had never heard of it.
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there is not apparently, and just to be sure we reached out to mcdonald's and they confirmed for us that there is no such thing as a fish delight. >> sounds nice. >> has never existed on any menu. >> they should make it. >> they should make it like filleto-fish. >> the guy lives in a guild will tower and eats a fish delight and won't use an iphone and doesn't make a whole heck of a lot of sense. tim, you had this storks an amazing breakout. had their first, what, quarter with up comps in the u.s. here in a matter of years. the only problem i have with the stock right here at mcdonald's, it's trading about 22 times. supposed to have the highest eps growth of 8% and i'm not sure that you get the all-day breakfast carrying through. >> you don't like the market. it's got no leverage and paying a nice dividend and 89% of its fiscal 'a 15 earnings are coming from not emerging markets and the comps don't get difficult until the fourth quarter so i
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think you absolutely stay in this name, fish delight. >> in case you're not up on the fish delight. >> fillet o'fish. a mcdonald's owner and operator developed the sandwich in 1965 to provide an alternative to his catholic customers during lent. >> we thought we'd get a fillet o'fish or fish delight for you. >> i'm going to -- >> look at that fine sandwich. >> beautiful. >> let's see what's going on over here? >> you're going to eat it. >> oh, no. >> that's terrible. >> that's wrong. >> i'm not eating that now. >> is it delightful? >> sold to you. >> it's so bad. >> what's your trade? >> is that cheese in there? >> it's like -- >> cheese on fish is a little -- >> sticking to my mouth. >> breaking news. ? >> thank goodness. >> reporter: comments from a senior apple executive according to dow jones that the government
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motion, according to the senior apple executive is a way to argue case twice before apple can respond. dow jones also quoting the senior apple executive saying the company has not said that unlocking the phone is technically impossible. we'll continue to read through these comments but for now, melissa, back to you. >> all right. thank you very much, seema moody. that's a good point on apple's part that the u.s. government is putting forth two basically efforts to try and compel them to unlock this one phone while they haven't even gotten the chance to respond. >> and the technically possible or impossible. i think that goes to the real question here is that is it a one-phone, one-off type of thing or do they have to create a whole new operating system because when this first came out it was implied they have to create a whole new operating system that would make everybody vulnerable. >> and somewhere john mcafee. says he can unlock that one phone. >> and he has the winning lotto numbers. >> i love the guy, but he's off the reservation. >> he's nuts.
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yeah. he's fruit loops. >> how is that fish delight going in. >> pretty good. >> apple trade? >> final trade. >> i think apple is probably going sideways on this. i wouldn't be trading. ralph lauren is my final trade. >> that does it for us here on fast. stay tuned. "options action" is next. want to get their hands on. if they could ever catch you.
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think of it as a seven seat for an action packed thriller.
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hi there. live on the nasdaq after this expiration friday after one weird week. the guys will make sense and try to make you some money. while they are getting ready, here's what's coming up. >> i loved it. >> and so have traders who have been feasting on trashy beaten down stocks, but is the feast about to end? we'll explain and give you the trade. plus trouble on the home front? >> i just want to smash your face in. >> smash my face. >> not that type of trouble, talking about home depot because traders see disturbing patterns emerging ahead of next week's earnings and we've got the trade. ♪

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