tv Fast Money CNBC November 30, 2016 5:00pm-6:01pm EST
>>. >> got to go at this point. carol, safe trip back to chicagoland. >> thank you. >> go bears. >> go cubs, she was at the game. >> i was. >> we're having such a good game, we're going to do this again tomorrow. >> maybe we'll match. >> and will match, no doubt. >> here's "fast money." see you tomorrow. ♪ money money money money >> another record day for stocks as the trump trade continues. and americans making big money. get this. since the election, the s&p 500 has added more than half a trillion dollars in market cap. $587 billion, if you want to be exact. but the dow and s&p hitting record highs during today's session, the dow posting its best month since march and the gains are fueled by these comments by trump's nominee for the treasury secretary, steven mnuchin on "squawk box" earlier today. >> our number one priority is tax reform. this will be the largest tax change since reagan. we have talked about this during the campaign. wilbur and i have worked very
closely together on the campaign. we're going to cut corporate taxes, which will bring huge amounts of jobs back to the united states. >> so with this promise of massive tax cuts and deregulation, did the trump trade just get turbo charged? tim, tell us. >> i think it did. if you think expectations and confidence are going to spur investment in the economy and corporate -- all the corporates i've met with in the last at the years, many of them, i'm waiting for a new administration before i do anything. tax reform, not only give them an avenue for bringing cash on shore, but look at numbers we have seen and a lot of the confidence. michigan, even some of the p pmiers. the numbers have been fantastic. think of the things outperforming and you can make an argument, these are the parts of the economy most bridled with, you know, regulatory hair, and, in fact, obviously, there is going to be relief. >> i agree with tim on the numbers. those were good. so that's -- aside from him, some fundamentals that are good. i do think it's important we hear again and again -- we knew
he was going to be very pro-business. we know he was looking at tax reform. but the more he is out there or people speaking for him are out there, the more that sort of backs him into a corner. he's got to do it as opposed to the wall. more discussion on this, which seems to be working. that's great. the idea people love it. but also he's really got to do it. >> to borrow a phrase from larry kudlow, won't this be the mother's milk for gains in the stock market? >> so the question is, does this ultimately filter through to stronger corporate profits? i would say maybe. it's not bad. i'm not saying it's bad for corporate profits, but again, you have to wonder what corporation you're talking about. talking about multinationals that might have a dollar headwind that might see some slower growth elsewhere or are you talking u.s. stocks, u.s.-centric names? for me, i would focus on the u.s.-centric names. i think this kind of turbo-charged narrative out there -- because we had that big you've orric run and could have
seen a pullback here. now this is new information coming out there. so now you train the market to expect this new information going into january. after that, we'll see. for now, things -- why get in front of a freight train? >> if you are talking about repatriation and taxing is a huge thing. if you bring back all of the cash, history tells us the last time we had a repatriation, it didn't go back to jobs here the in united states. what did microsoft do when they got their cash back in fwour. they started a buyback program to the tune of $30 billion. i suspect we're going to see a lot more of that. and that's fine and good. that's -- >> great for shareholders. >> we're talking about the economy. >> let's talk -- real businesses. like the small businesses which are 60% of the economy. >> so much cash overseas. >> removing the regulatory quagmire and making it easier for them to do is business is the most important thing that's happened. >> look at the move in the russell, look at the enthusiasm i think is going around, the lending banks can do again. to me, if i think about the
things that needed to be done, and we still have so much in terms of let's see more details of the plan that there really wasn't much detail on for a long time during this period. bottom line here, look what's moving, the stuff moving before the election. it's reflation trades, it's value over growth. and there's some seasonality to this too. don't forget this election moved a huge uncertainty. also, by the way, september not a great month for stocks. by the way, december through april -- chris fer roan said this last night. i think april is another one of those months. this period, if you want to get excited and the animal spirits are out, there are those who think this could run into april. >> use the word freight train. you're not invested in the stock market. should you get in right now? we've got the foundations laid, right? >> yes, i think you should for a couple reasons. it might be you're in bonds. that's another freight train. >> a bad freight train. >> right.
so this -- you don't have to do all or none. you don't need to put all of the money in. you can move incrementally. your dollar cost average over time. yeah, i think you need some money -- >> i think it makes sense to wait and see what the fed says on december 14th. because last year at this time, the fed raised interest rates for the first time in nine years and then signaled four more raises over the course of 2016. that's what really riled the markets, i think, in january -- right out of the gate. >> you don't think they're going to say something different? >> what i'm saying, what if they now, with all of this data you're talking about -- seems to be a bit better than the last time we heard from them over a month and a half ago, what if they actually signal a more aggressive rate hiking period in 2017? that could rile the markets. what i'm saying is, it could give -- the markets could be okay. >> wait for that potentially. >> and now with the new backdrop potentially 3 to 4% gdp growth consistently. >> separator. let's separate reality.
>> it's amazing. >> i would not say -- i would say the probability of having a recession in 2017 is not -- there is a high -- i shouldn't say high probability, but the probability is still there. >> >> you should be saying -- you've been saying it a long time. at least be consistent. >> i am consistent. i don't think there has been much change. what has changed is the uncertainty. i have a lot of doubts over whether or not these plans deliver 3 to 4% growth. that's different than trading in the stock market, right? i'm trading human oemotion. when you talk about the economy, 2017 -- reagan revolution -- reagan first-term, had a recession. that's what happened. so it would not be unusual to have that happen. >> so this is bk's bottom line. the verdict is out on the economy. recession is still on the table. but as for the stock market, you've got to be in it right now. >> yes. it depends -- again -- it depends on what you're doing. right? are you trading, are you nimble?
sure, be in the stock market. are you investing for the next 40 years? two years from retirement and trying to eke out an extra 5%? i wouldn't do it. >> i'll tell you what. i think the deflation damage we thought we were getting from energy, that we thought we were getting from europe, that we thought we were getting from china, has totally changed. and i go this is a lot to do with people and how they are gauging the stock market with the economy. >> what did we do to do? karen? >> i didn't do a lot today. i hate to jump in on a move like this. i did nothing -- probably next move might be sell some upside calls. i've done it some in the banks. those weren't -- you know, wasn't great. >> dan. >> i think if you were in the oil trade and some of the energy stocks -- crude up at one point, they could consolidate gains. you might think about taking some off the table -- we also know that it was agart move saying last week these moves fall apart. >> i think technically, at a minimum, look at transports, look at the rails. the only one breaking out to new highs, fedex, even the airlines
at very key levels, took a little bit of profit and a couple of the transports. these are trades you stay in. >> this is the highest level -- >> pricing power, they've got the european stuff, it's working. >> i did exactly what dan said to do. you take profits in the oil area. so clr was a name i said was going to hold into the opec meeting. i held it into the opec meeting. didn't look great yesterday. i went from zero to hero today. yesterday i came that close to selling it, but i didn't. i'm okay, though. i'm okay after today. so i sold -- i actually sold all of my clr. i think that's what you do. you start taking profits where you have them. >> it wasn't just promises about tax reform that got investors so excited today. take a listen to what mnuchin had to say about banks in particular. >> we've been in the business of regional banking and we understand what it is to make loans. and that's the engine of growth to small and medium-size businesses. so as we look at dodd/frank, the number one problem with dodd/frank, it's way too
complicated and it cuts back letourneau leblo lending. so we want to strip back parts of dodd/frank that prevent banks from lending. and that will be the number one priority on the regulatory side. >> now the s&p bank, etf, the kbe just posted its best month ever. but our next guest says there is still time to buy. mike mayo is one of the street's top-ranked analysts. welcome to the show. thank you for being with us. is this nirvana for the banks at this point? >> i'm going to use the analogy for jpmorgan. jpmorgan, we called the lebron james of banking because they have offense and defense. and i would say the banking industry -- the u.s. banking industry is in a way like lebron james of the stock market. they have incredible defense. the most resilient balance sheets in a generation, but now with this pro growth agenda, they might also have a little bit of offense, too. >> do you have a prop to show? or are you just holding out --
>> from being too nervous -- >> hold on -- >> exactly. but this is an important point. it's not just about the pro growth environment. i get it. the score card, where is gdp going to be? 2%, 4%, banks get a lot of benefit from that. the foundation that's been built up over the last decade, banks have $700 billion more tangible equity. $1 trillion more cash, and $3 trillion more deposits than just a decade ago. and now we're -- banks are more likely to re deploy as your video clip just showed. >> loan growth, basically. >> loan growth or any other way you can deploy capital. >> this is probably impossible to ask. but is it possible to say, what would banks do if there was not a single change in the regulatory environment, but you had all of the other things in place? that is the one ingredient to this pie. we're promised it right now. we don't know if it's actually going to make it.
and it might be -- it might be a long time for it to come to fruition. >> the biggest impact on the banks, number one, lower corporate tax rate. that's a huge concrete benefit. number two, higher interest rates. the increase is fantastic right now. regulation -- as long as it just plateaus and there aren't new rules, there's not new red tape, i'm fine with that. we say -- >> stays in place right now but those other two things come to fruition, we're good. the environment is great for the banks. >> we're good. you don't need to roll back dodd/frank to make the bank stocks work. i agree, there is a lot of red tape. there is a lot of regulation we like. we like the fact that banks levered 25 to 1. that didn't turn out so well. so i can the regulators have done a good job at reinforcing the foundation of the banks. bank new regulators. we would also say your job -- it's not done, but you've ramped up the industry to where it should be. now it's plateauing. now let's let banks facilitate
growth. >> you've been watching bank stocks for a long time and seeing a bunch of cycles. are we at one now where the normal metrics that one has used, maybe a 10, 11, for a pe multiple or some number book -- a little overbook. are those changing in your view? should we think about new metrics? >> karen just called me old. >> you may have been 6. >> a little sensitive. >> no, but what i would say is, you've had -- it's the 16 lost years of bank stocks. bank stocks were at the same level 16 years ago. so you're exactly right. this is a structural breakout for the banks. so a multiple revaluation, because of, you know, stronger balance sheets and less volatile earnings, you combine on that some extra revenue growth, bank valuations shouldn't be where they have been the last ten years. bank stocks traded at much higher multiples. a structural breakout? >> mike, first of all, congratulations on getting long
bank of america in the end of january when everyone said the world was falling. that's an aggressive thing to do as an analyst and absolutely right. jpmorgan went from 20 do 80 bucks in the last administration when things were supposedly so bad. tell me how that was bad for banks. this is a bank that actually went four times their market cap. actually executed on their entire business and now probably dominates the industry. was that bad? >> no, i think what you still have left for jpmorgan, though, is they're not the last man standing. but the largest u.s. banks are the banks still standing at a time when european banks are much weaker. banks have the balance sheets to deploy to facilitate the growth. the next phase is market share gain, still more capital return, and less down side. as long as the down side protected the up side takes care of itself. >> you know, mike, you recently in the lowest margins in six decades. it's tough to be a bank analyst.
i imagine conversely it's tough now to be a bank analyst because everything is off to the races. so within your coverage of universe, is there a single stock you think in this environment will actually not gain or is every bank stock in some way a winner in the next 6 to 12 months? >> it's been a great time to be a bank -- i love when everyone is petitions mistake and looking at the wrong metrics and people are still looking at the wrong metrics. i agree that rates, revenue and regulation in this pro growth environment will help the banks. but people are still underappreciating the resiliency of the bank. we think it's like shooting fish in a barrel. we did earning sensitivity and earnings go up 15, 20 or 30 or 40%. >> so all votes will rights but you like certain boats better because they'll rise more. >> we continue to like jpmorgan and citigroup and bank of america and wells fargo. and this is the first time in almost 20 years we have recommended all of the largest banks. and with the bank of america upgrade earlier in the year. >> all right. mike, great to have you with us. thanks for coming by.
mike mayo, top-ranked analyst on the street. shooting fish in the barrel. >> the two he mentioned, citi and bank and still trade below book value and are likely to get back up there. and wells fargo still well above book. so i think you get long -- citi, if you have to. and bark and maybe short wells fargo. i don't think we're done with that crisis. >> so i sold xlf earlier in the week which at the time looked great. today not so much. but i wouldn't be shorting the banks. i just wonder if we have had a lot of euphoria. is this as good as it gets? we priced in a pretty steep yield curve, every regulation coming off. i wonder -- i would be a profit-taker. >> with this one-month-run, are they still undervalued, in your view? >> i have most of my positions. a large bank position going in, sold 20%. they have risen more than that. so i still have a large
position. i guess i would probably be inclined to take some money off the table through options. i don't want to pay the tax for the gains. i don't want to pay it this year. and you can sell options and pay it next year, the tax rate might be significantly lower. >> right. >> i think you have to have more positioning also. i still think people are underweight banks and if you look at the s&p as a percentage four or five years ago, banks and financials are still underway. you don't need to chase it tomorrow but the dynamics might talk about it. balance sheet valuations in an environment where they can grow is pretty good. >> coming up, normally our top story, oil going completely nuts after opec makes a deal how should you be trading the space? and a top technician is here to tell us what has him so bullish. and bk says there is one stock he says should be heading much higher under president donald trump. he'll pitch us when "fast money" returns. ♪
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the company had struck a deal with president-elect donald trump and vice president elect mike pence to keep 1,000 jobs in indiana. we have a formal statement from the company, from carrier air conditioning. and in it, they speak to a number of points about the negotiation. but they do say that, quote, today's announcement is possible, because the incoming trump/pence administration has emphasized to us its commitment to support the business community and create a improved, more competitive u.s. business climate. they also go on to say, this agreement in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the u.s. and of the american workers moving forward. so, again, do you think a little bit on both sides of the issue. however, carrier does say this is a done deal and this was a negotiation that was, again, spearheaded by the trump/pence administration to be. >> it also looks like the state of indiana stepped up on
incentives to make this deal happen. >> and that's why people say pence's ties as the governor of indiana played a big role. >>dom, thank you. critics of this will say this is interfering with industry in terms of dictating where jobs should be. what you have a factory or company that has a factory that needs to move or will go bankrupt? >> they haven't spoken about consumers either. this is really what it comes down to. the workers and company may survive. shouldn't there be a free market? there are some pretty good air conditioners not made here that are cheap. >> the trump rally rages on and one group has not joined in on the fun. look at the fang stocks down since the election and losing more than $60 billion in combined market company. one technician thinks they're next in line for a trump bump. let's go off the charts with rich ross to find out why. what are you looking at? >> hi, melissa. the hate has gone too far. november has been an outstanding month by almost any measure, the almost being charge cap
technology. but there is three reasons why large cap tech is going to make a comeback. the first of which is oversold conditions in a world of overbought stock charts. we also have mid teens pullback to compelling long-term support and finally, outstanding the best seasonality historically for technology. december/january. the average return in those two months, 4.4%. so a great opportunity to buy stocks like facebook. so here, we're flirting with the 200-day moving average here. but importantly, the last two times we flirted with that level, back in brexit, earlier this year with the 13% decline in the s&p, we had nice rallies coming out of that. now, look at the long-term chart of facebook. we go from the 200-day to the 50-week moving average. remarkably, you've held that level for three-and-a-half years, each time providing a nice buying opportunity. once again comes in around 116 so traders can use that as a protective stop. sitting on that level, entering this area of compelling soenlt,
this is where you're buying facebook. now, amazon, here, look at this horizontal line. prior resistance becomes support. that comes in around the big round number, 700. once again, right above that 50-week moving average. there is room to play with. but look, we've got a little carried away, talked about a thousand-dollar price target. talk about strong seasonality, powerful in terms of technology, performance. and finally, google. google trades differently. if you want to make money in google, to capture these big moves here, you have to be willing to withstand the consolation. you see 2014. we're in the period of consolidation. i think you're almost through the period of consolidation. once again, pulled back to this compelling long-term support here at the 50-week moving average. the prior resistance becomes support. so three reasons to buy technology and three great stocks to play that trade. >> we normally would ask the
question, should we invite you over, but we're good, so we're going to let you go now. >> oh, whoa! >> it's a time thing. >> rich ross of everare core isa. we don't like you any less. >> it's literally trading 19 times expected of 19%, and high teens, sells growth next year. that's the one that makes the most sense. and you made a point about not selling in 2016 and -- you may see sellers dry up for that very reason over the next month. they had huge gains over the last two years. >> i hate to be growing with dan are who is agreeing with me. here we are. >> that's a dilemma for you. >> i do think you have a backdrop here, again, first of all, value overgrowth. facebook has -- there are concerns i don't know are necessarily going to affect the valuation. but around the news cycle going on on facebook, what will that mean to advertisers. i think the reality is, the digital ad space has been a very good story that a lot of good news is priced in there. >> so if you're talking about buying the fangs, all of them,
the one i wouldn't buy is facebook for exactly what tim talked about. i think they have a bit of an issue here with this quote, unquote, fake news. until they resolve that, for me, it's just a no-touch. doesn't mean it can't go higher. still ahead, why one of the riskiest trades in the market could be one of the best places for investors to hide out. i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide.. here's what else is coming up on "fast." >> if you missed the move, we've got four energy stocks that will have you feeling rich plus, bk is bringing the heat. pitching us on the one stock that he says could soon surge in a trump world. the name when "fast money" returns. ♪ ♪
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the opec group led by saudi arabia managed to do something that many people thought was absolutely impossible. and that was get an internal agreement to cut production. now, within that, of course, iran will be holding not cutting production, but that in itself is a big achievement, to come together with saudi to have a cohesive agreement. what is interesting, as well. not opec will be playing a part in this as well. next week, the 9th of december, there will be a meeting between some opec members and nonopec members, which is russia which is key to cut $600,000 barrels. that is a huge 1.8 million barrels that many say will cut the surplus. what happens with compliance, if some members backtrack on this and the political divide between iran and saudi arabia, will that erupt again. big questions for the market. for now, the market and traders to the up side are thoroughly enjoying the right. i'll hand it back to you,
melissa. >> thank you, steve sedgewick in sri en i can't. what should your energy play look now if it stays above or below 50 bucks a barrel? we go around the horn. tim. >> in a world where there are a lot of hedges and pxd and -- they are -- these guys have the most exposure, to not conventional. russia, if you think about today, any oil above 50 is good for russia. sanctions could be getting better. the reset with the u.s. is important. rsx is a great way to play and russia has higher dividend payouts and are getting better and better. >> karen. >> yes. we haven't talked flowserve which actually gets both industrial exposure and oil and gas exposure. they did an ill-timed oil and gas acquisition two-and-a-half years ago. and that has really weighed on them. so we see a sustained oil recovery and production here increase, that's very good for them. and then you have the industrial part of it, as well.
so chemicals, just gdp growth together, both flowserve. >> beakers? >> for me, i'm going to go with the less directional oil and go to exxonmobil, xom. remember probably six months ago, people were concerned about whether or not they would be able to pay their dividend, right? because oil was so low. so with oil at these levels, let's say it stays above these levels or even goes sideways from here, exxon will be able to pay their dividend and participate in any energy rally. so for me, i think that's how you play. >> tim didn't you say yesterday that exxon was expensive, if your view? >> i think so. i think there's a lot of good news in oil on the price. and for guys that i don't think necessarily are growing their production, some of them have cut cap x dramatically. so i think the ones you want to play -- you want to play oil services. >> tell me you're wrong -- you're wrong, bk. >> could be wrong -- >> this is what makes this markets. and i would say if you want to play directional oil, go ahead. knock yourself out.
play -- play the oil and gas names. play the e & p names. knock yourself out. here's the next phase. all of a sudden people are going to talk about how are they going to cheat and enforce it? we had all of that euphoria. >> i love seeing the monitor group. algiers, equate -- they're going to monitor the situation. >> exactly. >> dan. playbook. >> drillers. i think that schlumberger is a great example of a huge component in the xle. the xle is trading at new 52-week highs. schlumberger is one, you go after the large integrated, you go after the drillers and i think that schlumberger looks interesting, a straight shot to 95. but i don't think it changes stocks after days like today when the commodity was up 10% and like you said, euphoria is pretty high. let's see how long this can stick and how these stocks trade. >> think about why this happened at all. it's because saudi arabia has a ton of incentive to see this happen. i said this last night.
saudi aram co means if they don't have credibility that trades at a huge discount. these guys have to keep it in line. a 13% budget deficit. a lot of other people that really care. and by the way, russia does too. and when you crank up your production going into this, it makes it very easy to say, i'll do that. the oil wasn't the only thing rising. the fear in extra vix also trading today. one trader betting on a big spike. >> we don't do the vix too frequently during this segment. and that's for a reason that i'm going to get to in a second. call volume was two times average daily volume today and there was a buyer on the december 21st weekly 16 calls paying 73 cents for those. those break even at $16.73 up 30% from where the spot vix was trading. here's the deal why we don't talk about options. they oftentimes trade versus the futures. they oftentimes are used for a hedge and it's really not a
great instrument to get a sense for what sort of -- how traders are positioning. this one is clearly looking out to that december 14th fed meeting. so possibly a hedge here. one of the reasons why it's not that particularly interesting. look at this, a two-year chart of the vix. it doesn't frequently go below 11 here. there is a certain asymmetric relationship between the calls and the puts. and i just want to bring you, here is the futures curve right here. it's going up. if you look out to february, the futures are pricing about a 17 vix. we closed today just a bit above 13. what does the vix do? tracking the volatility in the s&p 500. here is the two-year chart of the spx and i'll tell you if, you want to look out in gauge what the market is pricing for movement, look out to december 14. the s&p 500 futures are only pricing a 1.75% move in either direction. if you look out to december 30th, pricing two-and-a-half percent. that gives guide posts of where the options market is pricing over the next month.
and it looks to be 21.40, pretty good support to the down side. >> for more "options action," check out the full show, 5:30 p.m. eastern time on friday. coming up, the selloff in bonds. riskier assets could mean big gains for one area of the market. we'll explain. and at&t alarming a new skinny bundle today but one player missing from its lineup. we will tell you what it is and what it could mean. you're watching "fast money" on cnbc, first in business worldwide. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.
welcome back to "fast money." treasuries just posted their worst month since 2009. and now the safest place to put your money in the bond market might actually be the riskiest. dom chu, a man known to take a risk or two himself is in a newsroom with more on this. dom. >> i don't know. maybe i would take him. i try to manage those risks, as best i can, melissa. anyway, there is this big divergence, like you said, when it comes to muni bonds and junk bonds. munis pretty much pummeled since the election. if you look at the national etf, mub, the shares already heading lower and trading heavy since hitting highs since back in early july and spread
precipitously. rising rates, falling treasury prices definitely part of that story. as are perhaps some concerns about whether demand slows for municipal debt. if it's tax advantages, maybe outweighed. remember the trump administration could hypothetically see lower tax rates, maybe, if that happens. regardless, center a statistical and momentum stand point, munis don't often see the us sustaine drop in value. as you can see there, the ishares high yield etf, initially dropped in the post election but has since recovered and now is down fraction anti, a kwa percent. in the past, overall stock market values, and as the equity in the markets get healthier and go higher in value, the riskier debt finds a bit more relief there, as well. so regardless of what the view is here, what the reasons are, melissa, at least some traders are keeping that eye on whether or not there are opportunities given those divergences, specifically the drop in munis and perhaps some of the momentum
relatively speaking in junk bonds, guys. back over to you. >> dom chu, thank you. who says there are opportunities here? >> listen, to muni bonds? i wouldn't be in them. let's look at what's happened. we have a deal with carrier, who is going to pay for that? the state is it going to pay for that. the dallas mention fund, going to run out of money. who is going to pay for that? states are going to pay for that. muni bonds down a lot. >> that happens in your world where there is a plamassive recession. >> they said they were going to run out of money. >> you're talking about the entire muni bond asset class, aren't you? >> yeah. do you think the dow's pension funds is the only one underfunded? >> i'm not opining on the dow pension fund. the muni bond selling off here is probably an opportunity because these are long-term investments. the bottom line, municipalities are doing better because they're raising taxes and there's actually people that are employed in the municipalities.
>> maybe it's gotten a lot worst. to the extend that sheelields ts and that's going down and provided support for munis. >> we have been talking about federal accident at thats. >> here's my question. >> dom -- >> let's say these are revenue bonds, the supreme taxing authority of all of these municipalities. doesn't that in some way create a bit of a floor? we don't think the municipalities are going bankrupt all over the place any time soon, right? >> you could have a floor but also have munis trade down, right? there is room r probably, below any -- from here to any floor. >> well, i think -- here's something else i think we're talking about. we're talking about our -- as a stronger bond market -- excuse me, a stronger stock market, pushing rates up, i think for the right reasons and some fed concerns and some other things. and by the way, bonds way too expensive. is that a credit-negative event. if you look at what is going on in high yield, it's positive. corporate earnings going higher, people making more money, the economy going stronger, this is good for high yield.
>> is oil better -- that's better for high yield. retail better? >> look at the emb, the emerging market debt etf, which is actually down significantly even from the levels off the lows. so, i mean, it's not treated the same for every asset class in the high-yield space. >> shifting years now to the streaming wars. at&t launching its new low-cost bundle service. now one major media company is missing. julia boorstin has the story in los angeles. hi, julia. >> hey, melissa. directv now launching today without cbs, the one media company holding out for better terms for its flagship network, as well as for showtime. the product's launch on monday, at&t hoped to add cbs and showtime to the service soon. the new directv now bundles range from $35 for 60 channels to $70 a month for 120-plus charges with charges from
comcast, disney, time warner and fox. they wouldn't comment, other than to say they are talking, but ceo less munvez said on the company's most recent earnings call this. >> it is our goal to be in every new bundle, and as we said before, we don't think any new bundle is complete without cbs. it's hard to go out to the marketplace and say, hey, i've got everybody but i don't have cbs. that means no football, no big bang, no "60 minutes", et cetera. our strategy is, once again, we need to get fair value. >> neither cbs nor directv will comment on a report in the "new york post" that cbs is demanding $3 per subscriber per month, which is half the cost of its cbs all access app. a source close to the negotiations tells me the sticking point here is not just the financials, but about the details of the digital rights,
such as the availability of past episodes and how the content is presented. all of those issues are approached differently by all of the over the top services. melissa, back over to you. >> julia boorstin, thank you. dan, smart for cbs to hold out? >> not really. they're going to have to give in, and end up being on there. if you want "homeland" on showtime, you'll pay whatever it is. so i actually don't think cbs probably has a whole heck of a lot of leverage. they're fighting against what is going to be, you know, a secular -- massive secular shift right now. and i'll just say this. "big bang," "60 minutes," nfl, we could do without them. >> that's the whole point of going off the top -- maybe i don't want all of this stuff. and that's the whole reason why bundles work. so i get why he on his call is going to make that statement. but i don't agree with it. >> yeah. >> well, for me, it just goes back to the whole point here, is that we're -- i guess it goes to dan's point. nfl, their ratings just aren't
there. what else do you want to watch out there? this happens all of the time. i think they're using a tactic from the past that probably won't work as well this time. >> yeah. karen? >> i don't know. i come back to disney. for -- well, football exposure, as well. ab cnet work. i don't know. i feel like we're still in great flux in the area. >> there may be a sea change here. there may be this shift from when we talk about content is king. maybe a shift towards distribution. and look at what at&t is doing. look how they have assembled these assets, directv, obviously have wireless. >> but they bought content. >> but they are going to be massively vertically integrated and however you want to watch it, however you want to bundled, you don't have to be attached to a wire. >> so is comcast an old-school version of a new at&t time warner? >> yeah, it is in a way. i actually think that com cass will probably have to buy a wireless service. >> parent company of this network, by the way. still ahead, bk is hanging
up his bear suit. what? giving us the one stock he says you need to own right now. will the other traders jump on board? he's over at the smart board watching up for his "fast money" pitch. much more "fast" after this break. energy is a complex challenge. people want power. and power plants account for more than a third of energy-related carbon emissions. the challenge is to capture the emissions before they're released into the atmosphere. exxonmobil is a leader in carbon capture. our team is working to make this technology better, more affordable so it can reduce emissions around the world. that's what we're working on right now. ♪ energy lives here. fixodent plus adhesives. there's a denture adhesive that holds strong until evening. just one application gives you superior hold even at the end of the day fixodent. strong more like natural teeth.
welcome back to "fast money." it's time for the "fast pitch" for a stock they think is a buy. when they're done, other traders vote on whether or not they're buying or selling the pitch. bk, give it to us. >> all right. here's my pitch. we've all talked about the trump trade, what's out there. there is a bunch of stocks i think could really benefit from the trump administration spending on defense that nobody has thought about. so think about what defense is. we have the traditional raytheon and lockheed martins. what is big right now and what do we read about every day? cyber threats. that is the biggest thing out there. and nobody is watching that. so when i look at some of these names, i look at a name like palo alto networks. that's probably one of the bigger names in this particular area. you're going to see a massive cyber defense spending coming. nobody has mentioned it yet. but you've got to think that's doming, because that is what we're worried about. talking about hacks during the elections.
number two, everybody is missing this, right? i haven't heard a single person talk -- actually, i've heard one person talk about it over the last week or so. but i haven't really heard many people talking about defense spending on cyber. and what does that result in, a stock down 24% for the year. that's the type of name that bk likes. we talk about all of these times, i look at the names everybody is missing, nobody has really thought about it and all of a sudden there is going to be that catalyst, and i can see that catalyst being perhaps the spending that's going to be coming in the budget for next year. palo alto networks is my "fast pitch." >> all right, thank you, bk. do you guys have any questions for bk about his pitch? >> what about the sony hack? i know the cyber is big with you here, big with the barron. but, you know what i mean? what's going on here, why is this not something -- is it a valuation thing? here's a company that is expected to have 3, $4 in earnings this year on a adjusted basis on a gap basis, a massive
loss here. is that one of the things holding it back here, do you think? >> certainly the fundamentals on these. we have already seen the gap down in some of these. i'm talking about a broader view. there's also an etf, which is h-a-c-k, hack. but i think those fundamentals are going to change. if i'm right, that there is going to be a massive spending on cyber, cyber defense, then those fundamentals will change quickly, and the market will pick that up, i think. >> bk, how much of this story is based upon margin improvement really driving free cash flow which i think for this company then is what you need to justify the valuation? i think the margins are what people are skeptical about, whether they can actually hold and also in fact the trend is against them? >> right. well, so but that's exactly perfect for what i'm talking about. you are talking about a situation where nobody thinks that the fundamentals are great here. but what happens if all of a sudden the government comes in with a massive spend. those margins are going to improve fantastically. we know that the government isn't exactly the most discerning buyer out there. and so that's going to be fantastic for this company.
so, again, i think that's what people are missing. there is a change coming down the pike. >> all right. it is time for the desk to weigh in. buying or selling bk's pitch on palo alto networks. ticker pa & w. dan. >> i would sell it right here. the stock is down a lot in the last couple weeks since earnings and gave some poor guidance. i think you probably see this stock back towards 120, and that's when you look at it. i think some of the things he's saying on a fundamental basis make some sense. >> karen. >> yes, i would buy bk but pass on -- sometimes you've got to know what's your kind of thing. this isn't my kind of thing. the -- you know, the valuation is hard for me. and also that last quarter miss. >> yeah. >> problem for me. >> tim? >> this is a picture of a baseball bat and a ball being hit out of the park, which means the "fast pitch" actually got clobbered. so i'm a seller. >> so intuitive. >> what i do here. ultimately, i think the
compensation, you know, valuation element adjusted is the difficult thing. the margins to me are concerning. dan pointed out the chart. i think there are some ways to go for the stock, even though they're in a great business. >> what is cisco going to do, they want to get into security. it's a $2 billion revenue company so they've got some serious -- they're losing a lot of money on it. and i don't know how they can make an acquisition at ten times sales for a company that loses so much money. >> three strikes you're out, beex. >> that's okay. my best trades are when nobody believes me. >> the markets are always right. so we'll see. thank you, bk. coming up next, financials are surging but dan says it's time to sell one of the biggest names this space. he'll tell you which one, when "fast money" returns.
i wouldn't sit there. it's your tv, take it with you. now you can watch your dvr anywhere, at no extra cost, with directv from at&t. as we starting to into black friday and right after it, we have seen in our retail businesses a significant improvement in trends. the question is now, we've got a big holiday season in front of us. as we always are, we are being conservative, as we are projecting the year. and the balance of this quarter. so we'll see how it is. trends right now, the last two weeks, are running ahead of plan. and margins are running significantly ahead of plan. >> that was the ceo of pvh,
owner of calvin klein and tommy hilfiger. the stock is falling after hours with its guidance for the holiday quarter coming in weak. you can catch this full interview tonight, "mad money," jim cramer, 6:00 p.m. eastern, a couple minutes away. time now for the "final trade." >> mbt cellular, hi div. take a look. >> goala reported today. this is a great long-term story for the lng trade, building a behemoth to upstream and midstream and downstream, they've got it all. >> behemoth. >> how are you feeling after striking out on the fast bit? >> it hurts. i would like to have the support of my peers, but i'm not going to lie. >> "final trade." >> apache apa, natural gas heavy, breaking out. i like this name. >> not that any of these guys like that trade, either. >> or that we're -- >> well, then don't. that's fine, cool. >> dan.
>> so goldman sachs. a lot of people we talked about in today's show make sense here. i think you sell it and see 205. >> i'm melissa lee. thanks for watching. see you back here tomorrow at 5:00 for more "fast money." "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, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you some money. my job is not just to entertain but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. this is not a show about politics. but if you want to understand what's happening in this market, you need to get your head around the