tv Fast Money CNBC May 13, 2016 5:00pm-5:31pm EDT
>> we're talking to young people starting their -- >> i know. i like the advice is, which is go after life, don't be afraid of failure. i'm all in favor of that. >> mike and evan, have a wonderful weekend. that does it for "closing bell." "fast money" begins right now. "fast money" starts right now. i'm melissa lee. traders on the desk, tim, steve, brian and guy. tonight on fast, the former ceo of jcpenney said he knows which names will survive the retail wreck and which won't. there's a disturbing trend emerging among the hedge fund community. it includes some of the most widely held stocks in america. and later, did you lose money in apple this week? well, we've got a clever way you can get that money back. it will cost you less than a bublg. first, we start off with the sell-off. 9 dow sliding 206 points at its lows. the dow and s&p posting its first three-week losing streak since january.
financials and industrials are the losers on the day. >> i think there's something else weighing on stocks. we've talked about that. steve's talked about amazon. the transports are the things that concern me now for the last week or so. we talked about it last night. tim brought it up. the iyt has been rolling over since the high at 145. that seems to be headed towards levels potentially we saw in january. that's number one. russell's in a very long-term downtrend. that seems to be rolling over as well. you couple that with bond strength which is undeniable at this point. the fact that gold still seems to have a bent to it. it leads me to believe the s&p is the last thing to fall. >> gold was higher even with the dollar strength today. >> yeah. i thought the price action today was horrible. if i was a bull, i would be very frightened. you had retail sales which were actually good. it beat expectations. broad economy very well.
countered what happened to macy's and nordstrom's this week. so this should have been a goldilocks scenario. the whole thing just faded. so for me, when a market turns on good news, that's a very negative sign. >> i think people need to relax a little bit. i don't think that the market is entirely turned. oil, first of all, the dollar strength today should have knocked commodities on its tail. oil's proving everybody wrong. commodities are still around the 200 day. i actually think the resource sector has bottomed and that this is part of what you're going to see. i think there's actually inflation coming, at least in the form of commodities. the macro data we had this week was not very good. but the dollar should be responding and it should be weakening. >> yeah. >> if anything, you're getting at least an oversold bid to the dollar. that's pushing some things around. you can't do much with it. the dollar is not going to 100. >> i don't know about that. listen, we had everything the
dollar should have gone down. we had a weaker than expected jobs report. relatively weaker macro. everybody's thinking that the fed's not going to raise this year. and the dollar is stronger. >> they don't even have to raise, i don't think. the dollar is going to remain strong. it's still the best currency on the planet, right? >> why? >> because i think by proxy, no matter what other currency you put against it, i think it will rally. >> it's a money supply thing. u.s. money supply is falling. every other money supply out there, it's just supply and demand. there's more euros and more yen out there, as simple as that. >> is the contention is the dollar strength is what's hurting stock right now? >> the dollar was oversold, people. it had to rally back. if you look at central bank defer deferential -- >> i think the fed is painting themselves in a bit of a corner. i think any semblance of a whisper of a rate hike and i think this is, i hate to use the
term, it feels like it might be a cold spring. the tell will be, in my opinion, if gold continues to hold a bid in the wake of the dollar -- >> how can you -- >> but you're talking about inflation coming in. they've already hit their jobs mandate. now inflation comes in and oil goes higher. i think it's ridiculous. >> the fed is trying very hard to reflate assets. that is starting to happen in the form of commodities. and it's certainly happened in the form of housing. that is not necessarily -- >> do you think they're going to raise this year? they're going to raise this year, they're going to raise in june. i think they have to stay away from the political cycle. >> i don't think they'll go in june. >> they go in june or they don't go period. >> i don't know how you can say that. i do believe they want to avoid the political -- they're supposed to be apolitical, but i do think they're political. today was the transports. think about what we heard from the department stores. everyone said inventories were the problem.
what's going to happen going forward. if you had 20 shipments, you're going to have 10. transports are going to continue to roll over if you believe that these department stores are still in trouble, which they are. >> let's talk about some of the stocks, within transports, the airlines have been doing horribly. new lows on american, united -- >> the airlines have been going lower since january of 2015. if you want to go back and look, that's when they topped out. they've been lower to sideways for the better part of 15 or 16 months. what's been taking place recently is we're starting to lose the railroads. fedex which had a huge bounce from 120 seemingly now rolling over as well. you lost the rails. i think because of the coal rhetoric with the politicians. if you lose some of the transports, like the upss and fedexs of the world, the iyt just hit the january 10th level. >> you like resources. do you think the bottom is in or forming? >> i think this is going to be a
choppy trade, to be clear. this is the most volatile space going around today. if you look at the names today, they were down significantly. the defensive names will continue to be defensive. i think the nasdaq weakness, high multiple weakness will continue to be under pressure. i don't think the markets are going a lot higher. again, we are range-bound. we're probably testing a bit lower. we're not crashing. the dollar, no way -- because the dollar will be a wrecking ball. i agree with all of that. i think that's what you're saying. >> right. >> and get out of the way. but there's no way to me the dollar can rally higher. >> are you staying steady? >> my base view here is adding to hedges, adding to the iwm shorts, adding to volatility. too much complacency priced in. two weeks ago key levels on the em, 32. wait to see if it breaks that. then you might want to jump back in. >> i actually sold my apple.
originally was in it. made some money and then lost a hell of a lot more money. it was a terrible trade for me and i had to throw in the towel. i broke the $92 level. $92 down to $85 is the bounce level. if it does not hold that bounce zone, we're looking at a $75 apple. >> for me, i think the price was actually terrible. i'm with tim. short iwm. that's probably one of the best risk reward trades out there right now. >> the bond market in tlt and gdx wants to go higher as well. >> steve grasso over here, will saunter over to the smart board. >> i like that. >> look at some levels. >> never been accused of sauntering. talking and walking. so now if you look at this -- you have to look at it through a prism of your recent low. we have it right here. this is carter's pen, it never works. here's your recent low, here's your recent high. what you come out of is
retracement. your first level, 2040. the reason that matches up tightly with this market is 2043 is flat on year. so right around there, in 2039 is the recent low. that's your cluster of support. the problem is, we have not been able to make any new highs, and that's an issue for the marketplace. so as tim said before, we're stuck in a range. yes, that's true. but what's happening is, you're getting a period of resolution right here. this is where we're going to break out. so it's almost like a coiled spring. you keep banging around a ball in the middle of two objects, and it's either going to break or break down. i think it looks like it wants to break down, because we haven't made any new highs. so this is what you have to look at. this is the level. 2012. that's your ultimate support. that's your 200-day moving average. but if you look at here, right within this segment, what does this start to look like to you. this is what gets the bears a little bit anxious. you do have a setup here where
you get a little bit rate here. we'll see if guy can tell me what this is. like this, like this. and you start to roll over here. you get your head and you get your shoulder and you start to roll over. ultimately it looks like a head and shoulders pattern is forming. obviously it's a bearish setup. >> i thought that was a self-portrait. >> or bad attempt at hangman. >> either way, it's bearish. >> that is true. >> excellent point. a lot of girls said that in high school, too, by the way. >> 2025, i think steve said 2012. 2025 is where i thought we would stop on the way up. it breached that clearly. past resistance should be support. i think the key level in the s&p is 2025. but it all comes down to tim's russell as a hedge correctly. whether or not the transports hold. >> what's your feeling on whether it goes up or breaks down? >> i think we're in a place where, first of all, earnings season was, you know, on the
margin, somewhat negative. we've gotten this whole consumer story. the data out of the jobs market is very, very important. therefore, i think right now, bad news is bad news. jobless claims yesterday, not very good. let's wait for the payroll number next month. >> the former ceo of jcpenney is here and said investors are missing a major part of the retail story. he'll be here to explain. and you won't believe who just bought shares of valeant and immediately sold them. we've got a way for you to get your money back from apple. all when "fast money" returns.
massive declines on disappointing earnings despite an overall bounce in april retail sales. allen is the former chairman of jcpenney. allen, always great to get your take. >> how are you, melissa? >> great. if you were in jcpenney, what would you do in there? >> i think anybody heavily in the apparel business, which most of these department stores are, they suffered a tough first quarter. and i think a tough last quarter, fourth quarter of last year. i think there's a lack of newness in the marketplace. i think there's been a tremendous focus on the internet. i would say at the expense of the department store bricks and mortar, the bricks and mortar still represent 90% of the business. they're taking a lot of money out of their operating statement to put it into the internet. at the expense of what they need to do in the stores, which make the stores exciting. the stores have to be theater, just like the mall. if you don't put the money into it and don't put the service into it, the employees,
customers into it, you're going to lose the customers' reason for shopping. if you don't create demand, and that's what we have in the department stores, you don't have a business. >> we're coming off a period where a lot of the retailers didn't even invest in the things they could invest in, like online strategies, technology to streamline and make their operations more efficient. you really think they're going to spend money on making it a theatrical experience for the shoppers? with that in mind, allen, who can afford to do that? are there going to be department stores that just go by the wayside, that just die off like the dinosaur? >> there will be as they have been. it's been consolidation in the industry for 15 years. it will continue to be that. there are just too many stores out there. but saying all that, you know, the customer is there. she's buying in many stores, buying fashion, buying at home depot, buying homes now because the mortgage rates are so low,
so she's shifting her dollars around. the department stores have focused a lot on the apparel business, and that's soft right now. where they're shopping today is dollar stores and fast fashion. they have to be in the game. >> let me ask you this, allen. macy's as an example. does macy's survive in its current form or does it get gobbled up, merge with another retailer? >> i think macy's is the dominant department store. and department stores, i don't think are going to go away. they have the ability to flex their assortments. i think they've been overflexed in the apparel segment. they can flex it back into more home furnishings. they can do that, than the specialty stores like a gap. that's much more difficult. >> what happens to the gap? this is not their latest batch of terrible same-store sale numbers. they can't seem to get the fashion right. what do they do at this point?
>> the problem is, they haven't. they are an apparel store and have the inability for the last ten years, quite frankly, to get on a specialty for the gap. they were very strong back in the late '80s and '90s. they haven't found their way yet in the last 10, 12 years. >> does it survive? >> i think it can survive, but they have to find out something they can focus on that makes them unique and different. right now you walk into a gap store and it's an also ran. there's nothing that says, i've got to go there. every store has to have a purpose and create a demand foyer thar product, through the theater and assortment and the way they present it. right now you walk in there, and it's not good. can they get it turned around? sure, they can. but i don't think they're doing it right now and the customers are saying that. >> have a great week, allen. always good to speak with you. >> thank you. >> the former chairman and ceo of jcpenney. he thinks everybody, all these guys are going to survive, it's
just solve paths of survival are tougher than others. as for something like the gap, though, i don't know what happens to it. >> i do not see any reason to go buy the gap right now. it's interesting to hear what allen says, reaffirming why you want to own home depot and lowe's. aging inventory of housing, the fact that people are spending more money, a lot of pent-up demand there means these are stocks that will continue to work. the department stores can be there. macy's, to me, the balance sheet is fantastic, but you have to wonder once you strip away the asset sales, these numbers are not good. the real estate play, which is what people have been fired up about, it says the core business is horrendous. >> allen mentioned making it much more of an experience, something theatrical, a reason to go there. oliver chen was on the other day and said what would be really interesting is put a soul cycle in a macy's.
really start thinking out of the box. >> and close down the macy's around the -- >> just make it a soul cycle. >> i would be there all the time. >> i mean, the last thing -- >> notice what he said. she is shopping, she, she, she. half the population are men as well. in his mind i think you're just catering to the woman shopper. not true. there's an antiquated form of thinking there, number one. number two, i don't want to walk into macy's and see a bunch of sweaty dudes like me in their spandex after a soul cycle. >> you bring it back to a trade, though, when you said she, she, she. alta salon is the
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welcome back to "fast money." a news alert on some of the latest hedge fund filings. >> melissa, some of the biggest filers jumping in early, including dan lobe who bought a hunk of alphabet shares. and 3 million shares of lowe's. he sold over 6 million shares of amgen. meanwhile, not much love for a souring apple. apple management exited its stake entirely in bridgewater. cut its exposure. bridgewater cut holdings in embattled retailers including bed, bath & beyond. macy's increase in position, apologies for that. finally, interesting note on the beaten down pharma stock valeant, they had a filing of
nearly 1 million shares in the first quarter. it turns out that according to someone familiar with the matter, he has already sold those, melissa. a short-lived burst of enthusiasm. >> kay kelly, thanks for that. this is on top of developments we learned earlier today. >> yeah, i mean -- >> where are you in terms of these trades? >> in general, what it tells you some of the biggest players are at least taking profits. maybe they're not as bearish as b.k. i think the apple exit is interesting. >> it tells you also that there's a lot of action together. i'm not saying the guys are doing the same thing. frankly, if i get a lot of news that people like appaloosa is out of the names like apple, it's not because people are worried about the release of the i-7. we've seen that. that's also been the tale of the
consumer stocks this week. we know what happened to macy's. this doesn't happen if there isn't mass allocation all at once. >> last part is that when you see a big fish come out of these stock names, maybe that was the pressure that was put on it. to tim's point, when he first started, maybe you see apple pop from here. it will do it without me, though. >> how about pepsi? saw pressure today on news that nelson is out. >> i think coke has been -- well, i like coke better on a chart. now that seems to be rolling over as well. now if you want to trade these stocks, i think coke, for example, you've got to buy at sub-40 or above 47. >> how about the valeant thing is kind of interesting. people were like, ooh! >> that goes to the point you've got to be careful with these things. not only do they not show when they sold them, they could have sold them the day after the quarter ended but it doesn't show any options positions that the players have against it. it gives you not a full picture of what's going on.
and, you know, 90 days with a name like valeant on 1 million shares, that's not a lot of time. >> today, as you know, friday the 13th. we're doing something scary in lieu of the "final trade." we're going to ask for horrific stocks for any portfolio. tick, kick it off. >> fitbit. this is a case of what's going to be a ubiquitous piece of technology. a lot of competition. the valuation isn't terrible. i think there's another leg lower. >> we started off the show talking about the transports. jb hunt is my name. let's not -- be careful. it's up 10%. it is forming a head-and-shoulders pattern. i believe revenues that come from retail space are probably going to be shrinking. a rates issue, not a volume issue. >> for me it's deutsche bank. a horror show all year. had a little bit of a rally. if this breaks to new lows, watch out below. >> right here, a dozen square george steely eyes marines from virginia.
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live at the nasdaq center on this dreary friday the 13th. the guys getting ready for the big show. while they're doing that, here's what's coming up. >> that's what happened to retailers this week. but if you think the pain is over, we have the next retailer to get amazon. plus, losing money in apple? well, we have a way to get your money back for less than a buck. we'll break it down. disney shares are doing something very odd. well, maybe not that odd. bu