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tv   Fast Money  CNBC  April 18, 2016 5:00pm-6:01pm EDT

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and yahoo!. do you think ibm will set the tone or is it company specific? >> i think it's very company specific. i don't expect intel to be any better. they have their own internal struggles too. that does it for us today. thank you so much. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking times square. tim, steve, dan and guy, tonight on fast. after-hours, netflix and ibm falling on earnings. those calls are now under way. we have full team coverage throughout the hour tonight. we'll also get reaction from the co-founder of that company. plus, stocks may have hit year-to-date highs today, but one trader seeing an eerily similarity to 2008. and later, the world's biggest oil producers can't agree on a cut. why did crude rally so far off the lows today.
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tim has an interesting explanation for that. first, on a day that saw the dow break 18,000 for the first time since july, the results we're seeing from netflix and ibm and morgan stanley, justifying the fierce rally we have seen in stocks. steve grasso? >> i don't know if it's justifying it. i think yellen, the fact that the job is pitting everyone into equities. i don't think she's done a great job for the overall fed. but i guess if you gauge her success on equities, she's done an amazing job. >> i think you get tired seeing whether utilities outperform. the sell the news event with opec, it happened too quick. the sell-off in about 12 minutes. it won't realize positioning. it had to get long again. >> dan, i said to you before, earnings are going to be lame at best and the dow is going to top 18,000 and close above it for the first time since july, and the beginning of mid-april. you probably would have told me you were crazy.
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>> i think steve's wrong, and i don't think you're wrong too often, steve, but yellen, whether she's talked specifically about it, we know the dollar, that's down 4% in the last few months alone. when you talk about the dow jones industrial average, popping 18,000 for the first time in july, you're talking about large u.s. multi-nationals. but year over year now, if you look at the dixie, it's actually down 3%, 4% from year-ago levels. you had really poor expectations coming into this quarter, and then -- >> but do you think earnings can be better? >> they will be. you're lapping pretty difficult comparisons. if the dollar were to stay in these lower bands, that it's been in the last 18 months, then you have it set up for stocks, that the multinationals will continue to rally. >> the headwinds to the last nine months, financials are the
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place, let's bring it back to what actually is, i think, the most absurdly oversold group coming into these earnings numbers where we've had terrible earnings. we know that the last quarter was bad. we also know the dynamics based in capital markets and headwinds and drying up liquidity. but if you look at the charts and say the markets can break through the old highs, financials have to do it. frankly, those charts over the last two weeks, not just through friday, not just last week, but today and even going into the numbers, told you, and i think tell you that financials are going to lead you to the next level. >> jamie dimon certainly thinks and hopes so. the day that he bought his own stock marked in many cases the bottom for that sector specifically, and in some ways the market as well. >> february 11th, that announcement, the jamie dimon announcement, the uae announcement around 2:30 talking about potential production cuts. later you had a deutsche bank, i think some sort of bond offering that gave them clearance for a
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while. those were the three things that got the market off and running. today, is it justified? probably the answer is yes. because they have not -- they've been lousy but they haven't been disastrous. given the climate, given the environment, there's no place for people to go if they're looking for yield and growth. i don't think it's the right move, by the way, but that's what's going on. >> the banks are falling apart from a balance sheet perspective. people are saying they're going out of business. >> the u.s. is -- >> on a relative basis, especially around here, there weren't many people saying it was out of hand. it was europe and asia. if you really focus on what some of us consider is a rolling credit crisis, into our financial crisis back in '07-'08, those are the weak links. i look at goldman sachs, you know, it's still down from its 52-week highs. you talk about the jamie dimon bottom, 63 to 53, fantastic.
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>> i'm saying that the financials look great. what i'm saying is if you're a market player and trying to understand, because you're going to keep talking about this 2100, 2120 that's been bucked up the last 18 months and you're right, but again, people -- -- >> the 400 day -- >> nice sell. but i think -- not to step on you, but i think the points are well taken. i think xlu, utilities were up 13% year-to-date, xle up 5%. and the financials etf, which is down 3%. i agree with tim. if the market goes higher, it's got to be the xlf. i don't think you'll see any rotation in there. >> what happened after hours today is sort of a perfect example of how this market has managed to rally through disappointing earnings. ibm, bellwether stock, it's lower after hours. netflix has been a fan favorite
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of so many people, represents growth in the market. that stock is under pressure as well. is that a reason to go into tomorrow morning and sell the rally or a reason to just look away and say, you know what, it is what it is, the market momentum is heading higher and i need to be there? >> you know, the things that have been performing over the last few weeks, despite what we're saying in a financial space, are the things that i think will continue to work. and that's resource stocks, that's emerging markets, that's places that i think were so overbeaten. i think in ibm's case, this is a stock nobody expected anything out of. netflix, i think the expectations are absurdly high. i look at oil today, how people priced that in the last six to nine months, and a big disappointment, and oil is up on the day -- >> ibm is lumped into that yield. i think people are searching for the yield because it's so difficult to find in this marketplace, that it's not as if it's been so beaten up as far as expectations, as much as why people are buying its yield.
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>> sure, but you could make a credible argument, though, you correct me if i'm wrong, ibm is after-hours stocks lows of the session, you could feel negative how you will go into the take tomorrow. yet this earnings season has proven that bad numbers don't really matter. >> don't matter. and i would take a little bit of only braj with the fact that i don't think they have nearly the gravitas they had five years ago. >> it's a wildly held stock. >> i agree. ibm beat by almost 11% on the eps side and just -- >> and realigned their guidance. >> that's what it comes down to. the reason to own ibm five years ago is because they had vision. they don't have the same clarity they had back then, which i think is why you sell it right here. >> well, earnings have pushed the dow above 18,000 for the first time since the summer. but our next guest says the results bear a striking resemblance to 2008.
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carter is behind that call. breaking it down at the smart board. hey, carter. >> it is all about earnings. that's ultimately what's going to make us make the new highs or not. let's try to figure it out. this is a long-term chart. the s&p versus earnings. we know at certain points, obviously markets get real expensive. if you put the lines on the last three tops, in 2000 we had multiples in the 30 plus pe range. in '07, we were at 17 times. here we are at 18. but the point is, though, that we are clearly above. and in each instance you start to roll. that's what's basically happened here in both lines. so the question is, are we going to make a new high, or does that matter. a few things. these are known stats. it's always good to look at things over and over. q-4 estimates -- q-1, excuse me, are a disaster. if this plays out it will be the first time we've got four consecutive declining earnings
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going back as far as the end of '08, early '09. the top line is equally dismal. five consecutive quarters of revenue declines. if you put in the context of the long-term chart, the issue is, is this a time to be bullish or to think the end of cycle. so a few more things, and then i'm going to quit. here is the chart of the s&p. what we know is there are two reference points left. this is connecting the series of lower highs. since we've peaked in may. and then there's the second line which is the all-time high. it would take us 1.9% to make a new high, 2134. let's say that happens. are we really going to explode or is it going to go back and fill, or back away? what we do know is a little bit more to get to a new high. valuation, we are making new valuation highs, or getting more expensive at 19 times earnings. higher than we were in '07 and
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higher than we were in may, almost a year ago, or early last week. >> carter, thanks. >> i think when you look at what carter is pointing out as far as valuation of pe, he's pointing out do you sell at 19 times, which is roughly where we are right now. basically buy at 17 times, which brings us down to an 1800 handle. these are big volatile moves. we've been caught in such a tight trading range that i think it will be explosive. unfortunately one way or another. >> what are you selling and buy? >> you tell me, overlay ten-year or overlay relative earnings at those other times. this is a totally new ball game. so stocks should be expensive here. they're going to trade expensive here. i know that earnings are poor. i know this is highly flagged. people can continue to find ways on the way up to say, this is the top. it's going to turn here. we've been hearing this for weeks and months. the reality is that the market is going to find places -- well, you know, it's going to find
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places to go up. even if the absolute market doesn't go screaming higher. >> i think that's very fair. think about it. it goes back to the clar and back to rates. if you think back to prior bubbles that got inflated, where things got overdone, it's because of the situation where, like steve said to start off the show, people were funneled in equities. there are very few places to invest. this is a conversation we started to have on the day. look at carter's chart and look back at the prior levels we've been in the last 14, 15 months or whatever, the path of least resistance no longer looks higher. you think about the shock to the down side and we haven't made any meaningful progress. i think the risk/reward sets up poorly for an upside breakout that goes parabolic, versus the setup we saw the past january, february, last august, and october of 2008. >> sentiment is really bad. >> i agree. >> finding one person that says the market is going to be highs -- >> that's the problem.
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i don't think anybody at this desk that the market is going parabolically through this level, no. to say we're going parabolically, or taking the other side of the move in the last two months, i say no. >> the argument for stocks has been spot-on, which is why they should be expensive. i also agree with this. it's been support for quite some time, a couple years now. vix at 13. at least if nothing else, makes you -- forces you to do something. up next, while everyone's talking about the problems with espn, disney keeps pumping out box office hit after box office hit. netflix and ibm falling after hours. netflix getting hit, as you see there. that stock is down nearly 11%. we're going to get instant reaction on the netflix call from both sun trust and the co-founder of that company, mitch lowe.
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later, could be no deal in do it is ha signal the end of opec as we know it. big implications for energy stocks. more fast after this. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of the at&t network, a network that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t.
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frank abagnale. convicted felon and con man. that was a long time ago. you know, they made a movie about it. you were shown to be quite skilled at fraud. times change. now i help catch the bad guys. me too. i help banks detect fraud by applying cognitive analytics to public financial records and social media. so if somebody said, "catch me if you can...?" we can. let's do a sequel. it could be a buddy movie. i would like to have a buddy.
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biotech stock tanking after hours. seema mody has more back at hq. >> this is a big mover after hours. a revenue warning from alumina. it's projecting approximately 12% revenue growth for 2016. the company citing weakness in europe. the ceo said given the disappointing outlook in europe, we've made management changes in the region, and plan to implement a program of actions to achieve our goal of delivering the robust growth. we believe the market can support. down 19% after hours. >> ibb down as well. seema, thank you so much. >> that's a problem. 41 times forward earnings and go from 16% growth down to 12%, the market will whack you. if you want to play the technical game, since the middle
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of 2015, a series of lower lows and lower highs were about to make one of the new lower lows. through 140 this thing gets dicey. there will be an opportunity to buy this stock. but i don't think it's $140. i think it's closer to the 125s. which given the guidance, the evaluation, you might see. >> disney clocking in as the best performing stock in the dow, after pivotal research upgraded from a buy to hold today. getting a boost from the box office success of the jungle book movie, second biggest april debut ever, bringing in more than $103 million. all of this begging the question, are investors discounting disney's movie division and putting too much emphasis on espn? that's what cramer certainly thinks, said as much this morning. >> i think that's the case. they are the king of content. everyone lost track of that. but we are in a bounce level. it's not going to be an easy
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road for them right now. i'm actually long the name. we had a recent low of 86. i don't think it makes it to the 120 level. i think it's probably got another 5% to 8% to the upside from here. >> market focusing too much on espn, too much on succession with iger and not enough on the studio which has, as we said, been churning out -- >> i think in august when this whole thing started -- >> he didn't expect this tidal wave of negativity that followed, right? >> that's what started it rolling. i think it's equally important now. and to jim's point and your point, it does trade at a premium valuation. i think they are getting the benefit of the doubt from the other businesses. i'll be interested to see what they say. >> a seller? >> honestly, if you've enjoyed the ride like steve has, i think you absolutely sell right now. >> i think the branded content strategy makes the most sense. the irony is the content is what gives them the premium multiple, not the cable business. so actually, if anything, this is the reason you should be buying disney, not selling it on
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espn. i think again, this feeds through to the consumer products, it feeds through to theme parks. it's their entire model built off of this. this is why you own disney. the cash cow that's been the cable and espn business will continue. and it will trade relative to every other guy in that sector. maybe even with a small premium. the rest of that, you've got to buy. >> it should trade at a premium in the sector, no doubt about it. the point about the success, it's uncertainty. but if they were to land somebody, i don't know, sandberg's name has been thrown around, i think that's something the investors would be excited about. you were talking about merchandising. look at has brouk today, that's where we're going with that today. "star wars." >> and then, obviously, pixar is huge for them. all the princess stuff. >> "star wars" was like 19 times. >> i've seen it three times in the theater and twice on dvd. >> it's both matel and hasbro.
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>> you had utopia, and all these things at the theater. i'm saying, you had -- >> it's going to the toy companies. >> board games here? >> the merchandising and parks, now the "star wars" coming out at the end of the year. a lot more to go. >> all i'm saying is both toy companies have been really benefiting from people that are -- it's not just christmastime anymore. all our kids are spoiled. >> easy, buddy. >> don't talk about my kids. >> it's true. >> takedown. come on. >> all right. i think mattel, this is part of a massive dividend story. i agree with steve, i think what steve was saying when he was trying to insult guy's kids, not mine, was that you're not seeing
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a recession in toy buying around the world. this continues to be -- there's no pullback -- >> guy has kids as well. he's allowed to spoil them, greg. >> he gives them back. >> exciting time for your family. >> finish the thought. you lost me. >> mattel is not necessarily all about the branded content or an extension into the toy business, it's a turn-around story with management. it's a dividend play, a china play. the fact that toys, period, don't encounter the same cyclical risks as pcs. netflix and ibm falling hard after hours. we'll talk to both ceos on conference calls. i'm scott walker, you're watching "fast money." here's what else is coming up on fast. >> that's what traders are saying now that there's no deal out of doha. oil investors are missing a crucial point. he'll tell us what it is. plus, stocks are surging.
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but one notable name is missing out. here's a hint. we'll tell you what's wrong with apple, and if now is the time to get in, when "fast money" returns.
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welcome back to "fast money." shares of ibm moving lower. the conference call well under way. let's get to josh lipton out on the west coast with the details. josh? >> reporter: well, scott, we know ibm is staying fast as it can to the higher value areas, cloud, analytics, mobile, and security. here's what martin schroeder had to say about the areas on cnbc earlier. >> when the first quarter, we had again good progress in transforming our business. you can see in our data, for instance, in growing the strategic imperatives, double digit again. we see that the investments we're making are certainly paying off. they're driving growth above market rates. >> now, schroeder also saying the imperatives generated revenue $20 billion over the past 12 months. he also broke out the many partnerships ibm is forging to accelerate the move into the
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cloud. take a listen to what he said about that to analysts. >> this quarter, we announced the number of partnerships with companies including vmware to advance the development of next gen cloud applications to enterprises. we've brought swift to the cloud, enabling mobile developers to build end-to-end mobile apps. all of ibm's relevant software is now in the ibm cloud. >> now, to schroeder's point, the cloud revenue clocked in at $11 billion. the problem is, ibm's core business is under pressure. you saw it throughout the results. down about 2%. global business services revenue down about 2%. technology services in the cloud platform down about 2%. scott, back to you. >> josh lipton, thanks so much. i've god to hand it to tony,
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first and foremost, before the results came out, said expect a messy quarter with a big headline beat. what has there not been a messy quarter in ibm? >> you'll get to be the number one ranked analyst in your space. >> i no, i love tony. >> there's a couple of things i take away. if you watch the masters last weekend, you saw a thousand mind-numbing watson commercials. it's about 1% of their sales here. they've got a big mess going on over here. the stock had a huge rally from 116 to 152. i think investors are a little offsides. i think the street is still very negative. do you know what the average -- >> 135. >> 138 actually. well below where the stock is trading. >> to your point, the legacy business -- >> closest without going over. >> in the cloud business, that's where amazon has been stealing. all of that business. amazon is number one. no one saw them coming. wherever ibm wants to get to, amazon's already there.
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it could become -- >> so it's not a -- there's no reason to buy this stock. if you look inside the quarter -- >> hold on a second. >> that's a question. if you say it's -- they had a tax benefit, as guy said and stephanie earlier said, they beat their numbers. but only reaffirmed their guidance. yahoo! what's so great about that. >> i think the company is very concerned about perception. they told you on the investor day back in february they were going to announce a new reporting structure. this is a cognitive computing cloud company with a security emphasis, and software that i think has been underperforming, because people look at high margin business, people get excited if they don't seem to do it. let's face it, they told you it was going to be noisy. to freak out about that right now i think is probably not warranted. >> i'm not freaking out. but i think steve just tried to -- >> a little bit of a freakout. >> no, i don't think he freaked out. i think people in general are
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saying, once again, dan said, it was a noisy quarter. i'm saying i think they told you it was going to be noisy. >> but the problem is, 11% on the year, up from $116 in february, prior to that analyst meeting. >> by the time they get themselves immersed in cloud, it's going to be too late. if you look, their margins continue to decline. when you have the core businesses which continue to deteriorate, the reason i said 135, is because i slapped a ten multiple on the $13.50. they reiterated after earnings today. >> one other point, sooner or later they're going to have to split this company up. we saw it happen with hewlett. they'll have to unlock some value here. it's going to have to happen if they want to -- >> it's been a hunt for yield environments. 3.5% yield. >> not to mention the buybacks. >> exactly. >> i hear music.
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>> not good music, though. >> you going to read it? go ahead. up next, the biggest -- >> why the oracle rally so far off its -- >> slower. >> tell us what that is when we come back. >> no, we've got more. >> plus, netflix tanking on earnings. you're looking at a live shot of the video conference call. we'll have the headlines when "fast money" returns, next. >> brilliant!
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the dow ending the day up triple digits, closing above the key 18,000 level for the first time since july 20th. all three of the major indices closing at the highest level for 2016. here's what's coming up in the second half of "fast money." check out shares of netflix getting slammed after hours. down about 10% after its earnings report. the co-founder of the company joins us in an exclusive
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interview to tell us the one thing he might change at net flings. plus, it's a major week for tech earnings. we'll tell you the one company traders see making new all-time highs by the end of the week. but first, crude staging a big comeback today, despite a lack of an agreement to freeze production at a meeting of oil producing nations in qatar today. brian sullivan was there, spoke to nigeria's oil minister. here's how he described the breakdown in talks. >> unless iran would be obligated to go with the general pack, then it wasn't going to be effective. so we went back and forth, trying to work alignment. but it was clear that unless you had everybody in the ballpark, it doesn't matter whether we agree. >> dennis gartman is the editor of the gartman letter. dennis, always good to see you, sir. >> good to be seen, thanks. >> did you expect a deal? were you surprised? >> no, i wasn't surprised even
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slightly. it was abundantly clear the iranians weren't going to be there, and without them you couldn't arrive at an agreement. there was hope last week they were going to show up. but without them, the very elegant oil minister made it clear no agreement could be had. i think the problem is that we now have an opec that is really quite torn asupder. you have two enemies, i think abundantly clear that the saudis and iranians look across the persian gulf at one another and rather than start a shooting war, the saudis started a war of oil production. i think the most important statement was not that which came from the meeting, but that which came from the deputy crown prince, the young man who's probably really the oil minister for all intests and purposes who said last week the saudis could go to 11.5 million crude barrels
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today. we could go to 20 million in two years. he told you what they intend to do. they intend to continue to produce oil at a very fast pace. >> bob said the oil drop that didn't happen. what do you make of the way oil traded after this news out of doha? >> i didn't think the news was that shocking. i was somewhat surprised you were able to take crude oil down $2.50 as quickly as you did. i thought the lack of the agreement was worth a buck, maybe a buck and a quarter on the down side. you had a lot of people who got short into the hole and it came back and rallied through the course of the day. what was most important to me, however, is the term structure continued to widen, and as long as the contango widens you have to be skeptical of the rallies in the crude market. >> if we're range-bound, what does it look like? >> i've said the last month and a half $32 on the low end is as
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low as we're going to get it. $42 on the high end on wti is as high as we're going to get it. as long as the one-year remains at $45, $42 and spot gives you $47 for the one year. and fraccers will be happy to make money at that price. so will bankers for fraccers be happy to make sure that there are abundant hedges put into place. i think $32 to $42. i'll continue to hold to that same concept. >> thank you. >> thank you. >> we're finding the death of opec. but how about of the birth of 15 producing nations, or a bunch of nations that would never get in bed together. the barroom in "star wars," whatever you want to call this, for the first time in 15 years these guys got together to talk about something. i think you've got a different dynamic going on. no one expected a deal. yet if this is short covering, how did we rally up into it and have short covering after it.
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>> what exactly have they gotten done and what have they got done now? it doesn't matter. i think it's funny we went from talking about a freeze to now talking about the saudis ramping up production. both of those things, for me, are lower oil prices. wherever oil goes, the equity markets go. i think that's the tell of the taken. >> i think they've got something done already, which is they got the market aware of the fact that you can't get two offside in positioning. the fact of the matter is, you're seeing production cuts in the u.s. you are seeing a lot of the uneconomic production at $40 to $50, basically being priced out of the market right now. >> no, that's what they just told us. you could buy exxon mobil. >> buy the commodity. >> what has changed today versus where we were three months ago when oil went on this vicious -- >> we're worried about a freeze, about cutting production. iran's not going to cut. iraq's not going to cut. now the saudis say they might
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ramp up. >> you can buy exxon mobil, people are buying stocks for the yield place. >> i just take you back to something i read over the weekend that corporate defaults are up $50 billion this year. the fastest pace so far since 2009. so you asked what's changed this year. we obviously overshot on the down side, a lot of things overshot. commodities, high yield, equities, now we're much higher here. things have stabilized a little bit. if defaults pick up, we saw it last week, we could be in a very different -- >> good news for oil. >> it could be. but what i'm saying is, a credit event would not be a good thing for any risk factor. >> now we're backing the banks. >> no, we're not. it's about risk assets. >> we're talking about oil. corporate bankruptcies, good for oil. >> you know what else we're talking about? >> netflix. reed hastings is taking a shot at amazon.
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we'll get reaction from mitch lowe and bob peck. stocks hit another high today. why are apple shares falling more than 2%. we're going to tell you what's got investors fleeing from that tech giant leader at this hour.
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welcome back to "fast money." netflix falling sharply after hours on earnings. julia boorstin is monitoring the conference call tonight. julia? >> scott, investors seem to be focused on the disappointing guidance for the first quarter. subscriber growth looked bad because last year they launched in australia and new zealand. this year there are no major international launches. amazon's new subscription option poses a threat. >> hulu is doing some great work, amazon is, hbo, showtime. there are so many competitors. and everyone is working hard to build the best content. and so we're seeing growth in the overall internet tv market. of course, that's displacing linear tv. and it's natural that everybody's coming in as they realize that the future is internet tv. >> in terms of what the future
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holds for netflix, hastings is open to allowing some customers to download content instead of just streaming over the internet. that's the way amazon allows some users to watch offline. the company is not interested in any m & a. they said there are no plans right now. and no technological reason netflix isn't interested in live programming. it doesn't quite fit with netflix's brand. facebook and google doubling down on live video, validates that netflix's bet of the future of video is very much digital. scott? >> julia boorstin live in the l.a. with more there. let's go right to bob peck, he's been monitoring the call from the red phone. neutral rating on the stock, $115 price target. bob, what are your thoughts? not only on the numbers, but what you've heard? >> high level it was a good quarter. they beat on the domestic and international. it's the guidance. the reason the guidance is interesting, about a third or so
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lower on the international side. just given that they've opened a bunch of markets, they thought it could be higher, particularly waning on rolling out the price increases. the profits was a little bit lower. content a little higher. talking about negative free cash flow into '17. >> what do you think of this amazon entry into the stand-alone video subscriber business? is it a threat? or being overplayed? >> we think it's a bit overplayed. the reason why is when you do the math in the $9 a month for amazon, it's cheaper to get amazon prime. you would think it would be innocecentive to get prime as opposed to the video option. you see a sort of a portfolio of services. how hbo go was complementary to netflix, amazon could be in that realm as well. >> bob, we'll let you get back on the phone. is that thing really connected? >> oh, it's connected.
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>> it's a bat phone. >> you've got to put this in perspective, talking about international ads. expectations were for $5 million. they guided to $2 million. that's a huge number. that really is why you were long the stock if you were long netflix. some of you who may be thinking about pressing the short, down 10% right here. in january, when they released their q4 number, the stock was down 10%. 12% short. it closed the next day unchanged. so be very careful here. >> i'm glad you said that. literally the half hour before the program i was looking -- i was reading something that said it's like the last four or five times that they have reported. the stock has traded at the exact opposite way it traded after the earnings, or the day that the earnings were released. >> take it with a grain of salt. once you've had to sort of digest what's actually taking place. let's get more on netflix, bringing in the company's co-founder, mitch lowe. he served as the president of
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redbox, adviser for fandore, a streaming service for independent films and documentaries. mitch, great to have you with us. thanks so much. >> yes. thanks, scott, nice to talk to you. >> how should investors be thinking about this company tonight? >> you know, this is a big transition period. you know, this is a period where they're just beginning to digest this big international growth, which means there's a lot of heavy content costs that haven't had the time to kind of earn out the revenue, or earn out the profits on. so that's a big transition. and digesting all that additional content creates that negative cash flow, or a big pressure on that cash flow. you also have a big transition with all these, you know, niche players, these players whose real business, like amazon is not on entertainment, trying to eat away at it. and, you know, it's really underestimating netflix's
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ability to, you know, directly target individual subscribers with the right kind of content. so i think this is a momentary lull, and i think we'll see them charging right back. >> i think don't investors in some respects have a right to be impatient about the spend? they want the spend to come down. they always worried about what netflix is paying for content. >> yeah. >> it also sounds not to say you're completely dismissive of competition like amazon, but the fact of the matter is the space is getting a little more crowded, with reputable players. jeff is no fool. >> no. i think what you'll find is all these bundled services, you know like the comcast bundled services that include hbo and other services will start to unravel over the next few years. and many of those folks will start to reach out and replace much of those costs with
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netflix, which i think bodes well for their ability to -- at least the elasticity over time in raising prices. >> the issue of grandfathering expiring as it relates to where prices are going from here, do you think that's going to be a hindrance to adding subscribers, and is that potentially the reason the guidance was a little light for the current quarter? >> there's a messaging issue, you know, always when you have these price increases. and i think the bigger impact is on, you know, folks on the acquisition side that hear that messaging. but i think long term it's a real -- it will be a little blip that will come right back. you know, you really have to compare the price, and these price increases to what the comps are, what the competition is charging. so, you know, it's really a good comparison at hbo.
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their unbundled service is almost twice as much. i think long term it will not have a big impact. >> thank you for joining us here on cnbc. mitch mitch low is the show me movies with explosions.
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show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. welcome back to "fast money." microsoft getting a boost ahead of earnings after the bell. one savvy trader betting shares could reach new highs. dan nathan breaking it down at the smart board. >> yes, are company reports -- thursday after the market, implying 5% move. two of the moves have been up 10% to new 52-week highs. that's really what's important here when you think about it.
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today when the stock was trading about 56, there was a buyer of 4500 of the 59 calls and the seller. they are defining a range on may expiration. if you look at the 20-year chart right here, the high on y2k was $59.97. if it's right you get the pop after earnings. close to a new all-time high here. i think if you're playing for a move like that, you want to find your risk option premiums, it looks reasonable on thursday after the close. >> we're back right after this on what to watch for tomorrow. i'm here at the td ameritrade trader offices. 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 and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated
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we're back. let's go over to bob peck who's been listening to the netflix call. >> the takeaway here, a fantastic company. the international ramp to slower, profits will be more elusive. 45 times the top. >> bob, thank you. we'll see you soon, we know. let's get the final trades of this evening. tim, start us off. >> disney argument on brand and content works. >> twitter down 25% year-to-date. i actually went back in and added to one of my long positions. had a conversation with bob peck. >> now you're trying to blow out your knee? >> got it. okay. twitter. i bought a little bit more today ahead of earnings.
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enough said. >> dan nathan? >> a seller last week, still a seller at 23. i'm going to stick to my guns here. >> i'll see you tomorrow night at 5:00. that does it for us. "mad money" begins right now. . my mission is simple. to make you money. i'm here to level the playing field for all investors. there is always a bull market somewhere and i'm here 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 isn't just to entertain but to teach you. call me at 1-800-743-cnbc. today dow broke out above the 18,000 level. only 107 points to close over 18,000.

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