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tv   Fast Money  CNBC  December 5, 2016 5:00pm-6:01pm EST

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>> interesting to see the response. >> very scanty details. but again, dow jones saying amazon may have 2,000 locations, including grocery and these amazon go ones. paul and mike, thank you both for joining us on "closing bell." that does it for us. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. traders on the desk, tim seymour, karen finerman, dan nathan and guy adami. a record run in stocks has hit a, get this, buy-in climb maximum. that doesn't mainly you stop buying? lots of to dissect. and jim cramer spoke with united technologies, which owns carrier after a major deal with trump. we've got the comments that has all of wall street and corporate america talking. and oil soaring above 50 bucks a barrel, hitting its highest level since july of 2015 before retreating. the commodities king says, think again. he'll be here on set to reveal what has him so worried.
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first we start off with what seems to be trump's indestructible rally. the dow hitting all-time high out of the gate this morning. the s&p and nasdaq having their best day in two weeks and all of this on the face of huge events over the weekend. that would have normally shaken the markets. trump tweeting, almost taunting china and italy with a historic no vote on a constitutional referendum that could shake up the country. and an you will but certain rate hike next week and investors buying anyway. can anything take down this trump rally. should we call it the teflon trump rally? >> something is going to take it down. kudos to team, karen. dan bullish -- on the financials. >> even dan. >> pete has been steadfast, as well. can anything take it down? what i think is going on, and by no means have i been some raging bear. i think people are saying, all right, let's look at the financials. where were they trading in '07, '08 before everything hit the fan. goldman sachs was probably trading two-and-a-half times price to book, give or take. and i think what the market is
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saying now, listen, i don't know what this guy is going to do. but i don't want to be waiting at the altar if, in fact, he does do it six months from now. goldman sachs at 1.3 times price to book than to be six months late when and if he does bring all of these things in. can anything derail it? something will. absolutely. but right now, i can't figure out what that's going to be. >> well, and, you know, frankly today you had an opportunity to look at european banks and saying are they going through a trump moment, too. if the seeds are being sewn, it's european bank positive. deutsche bank ripping higher, a trade you should continue to look at. look at the ism. all the sentiment indicators -- this isn't data, but this is purchasing managers, this is supply managers, people looking at the business environment, and you have an environment where i think it gives the impetus for stocks to rally. again, is this the trump rally? yeah, some of it is if you think about either deregulation, tax policy. some of this is elections over rally. and a seasonal rally and i think
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those are the things. look at the broadening of the market and back to dow theory, alive and well. transports really validating. >> the transports hit a new high today and final technology at the same time. >> no technology left at the time. that was good. i thought they were ridiculous levels. google was -- i think got fried. thursday down a lot. friday sort of flattish. it should be up. a lot more than here. i'm happy to own it. i know it's out of favor right now but i still think there is excellent value and the banks. i'm surprised. tim touched on the european banks. i'm surprised they weren't down. this is -- >> they started out down. >> okay. but -- they started out down. it's amazing they -- they didn't make it down very long. it was over pretty quickly. it's amazing to me that we think back to the greek crisis. i mean, to have -- this is not a similar crisis at the moment. although, you might have -- it could become -- it could become something. to have the banks react -- >> it's sort of near what the markets did in response to
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trump. >> yes. >> it was an immediate flushdown, right? and a bounce back -- >> i think people have had a chance to think about this one. yes, didn't necessarily mean renzi was going to tow the european line. if anything -- the no vote probably kept some of these other parties in italy from being in a better position to actually push through some more radical change. i don't think that this is necessarily great news for italy or european banks. but i do think if you're contemplating a world where the european union is starting to have to be realistic about their environment, that's absolutely what's going on. >> ultimately comes down to this. i am an investor at home, i didn't really participate in this rally, because i wasn't invested on election day. now what? >> i think you have to wait until the fed meeting. and you started off this conversation talking about what donald trump tweeted over the weekend. well, he's also been a huge opponent to the policy that fed chairwoman yellen has had in place over the last year or two since she has been in that seat and he's also railed against low interest rates. so let me tell you this.
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what if she comes out -- she knows she's on borrowed time here, done next february the 18th. what if they take a much more hawkish stance about rate increases over 2017? that could clearly hit the market. that's what hit the market in january and february, the reverberations of that. so we have a situation here where the guy, in my opinion, is a walking tape bomb. the market doesn't care about it now. it will as we get closer to january -- >> the pushback there i would make, 4 by 400 rely relay. the first three legs of this 4 x 400 have been by the fed and monetary policy. just as they're exhausting and crossing the finish line, guess what, they're going to hand the baton off to what seemingly now is fiscal policy at probably the exact right time in history. i would submit if mrs. clinton were elected, the market would react far differently coming into it and if the fed did raise hikes. i don't think people -- should they with, probably. are they, no. because they think, you know what, fed is out of the picture.
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fiscal policy -- >> i think it's an easy way to think about it. right now we are still a month and a half off to inauguration. we know that taxes are coming down. we know there is going to be a lot of crony capitalism. how do we pay for this, the fiscal stimulus. what happens to rates. an easy thing. we're in a goldilocks period. listen, the s&p is not going much lower than here. maybe 2150 at the end of the year. they're going to keep them up. no one thought we were going to be up 8, 9% on the year. >> the fed argument -- i agree more fed rather than less fed is what we got ahead of us and that's bad news for markets, i think. have we gone from a place where actually the fed was going to be totally out of the picture and we are in an environment where if anything we're in deflation to one where we have inflation just overnight, just because the elections have brought in a guy that's maybe announced some change. we may be saying the same thing. until we actually have a real sign there are inflationary forces, the fed is going to do nothing. the fed is going to lay back. and by the way, yellen is not
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out until '18. i think you mentality that. anyway, the point is, you have plenty of time for the fed to prove their independence. and i'm guessing a lot of this -- >> prove her independence. what is he going to do on social media? that's the thing. that's what the markets are not really pricing right now. >> she's going to tweet in response? i don't think so. >> i don't think so. but, you know -- >> we were just -- back to melissa's question. what do you do, own zero stocks. it's november 8th, you didn't buy anything. >> i don't think anyone owns zero stocks. but big cap phrma has been taken out, have decent yields. >> so you want laggards. >> the xlv -- >> financials. >> no -- >> you want to buy yields. >> i think you probably -- i think you could take a shot at staples. a stock like bud. an absolutely aninihilated down 25% in two months. look at pfizer and merck and eli lily. 3% dividend yields. >> i didn't do a lot today. but if i owned -- i would own
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some equity exposure, even here. you don't need to get all-in right here. but to your question to me, i assume then one is very heavily fixed income. which is problematic. entirely fixed income at this point. maybe it's trough for the short term. that could be -- but i think you have got to own some equities here. because the building blocks are still in place. i think they're going to be in place for a while. you don't have to get all-in right now. buff i do think you have to own some. >> added to restoration hardware, and look at some of the resources -- by the way, the restoration hardware is part of the luxury trade and retail. the home improvement trade. frankly, i think restoration hardware gets a piece of that, oversold on some company fundamental problems. and back to the reflation trade, copper going at 3 bucks a pound. if it goes to 3 bucks a pound which i just said it will, there are a lot of trades out there that still have a long way to go. the iron ore trade also continues to be the -- look at the rails. if you think rails are trading
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higher because the world is a better place, they're trading higher on moving this stuff around. >> are they moving more stuff around? we don't have that data yet, tim. the only thing i would say, i think a lot of these stocks have gone pair bollic in the last month, discounting a lot of good news. so to me i think to chase some of those things up -- how much is u.s. steel up? it's up in a straight line. 50%. or something like that. >> i think the rails -- i said last week and stand by this. i think cxx is at a two-year high. i think you fade that. i think they're starting to have pricing power. it is the things that people expect they will move around that continue to go higher and are still oversold. >> real quick. single stock. lululemon bounced around 55 level since the middle of october. they report on wednesday. why is that interesting? because it failed a number of times to break through 55 on the down side. had a big move today to the up side. if you want some potential high-risk, granted high-reward. lululemon into earnings probably very low expectations earning
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this wednesday on the long side. >> the surge in stocks has led to a, quote, buying climb maximum. despite the finality, thinks you should buy stocks. jeffrey, chief investment strategist, great to see you. if it's a buy in climb maximum, does that mean the best of the buying has been done? >> no, all it suggests is in the short run, demand for equities has waned a little bit. and leads to a pause and/or attempt to pull stocks back. i found the comment about goldilocks interesting. our timing bork says the equity market is growing higher into the beginning of february. >> all right. so the climax will happen around that period, right? >> no it happened last week. buying climax is when the s&p has a sharp move up on heavy volume, and then on friday's close, it closes below the
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previo previous friday's close. that is a buying climax. >> okay. so within the markets, jeff, which sectors look like they have the most juice still to go, even beyond this climax to march higher into the end of january, early february? >> i think technology. i think karen is exactly right. i think technology looks very cheap to me. the ones that we do not like are the defensive plays, which have been bit up to rather high historic valuation levels. so utilities and the chiropractor and gambles of the world we don't have much interest in. >> jeff, it's karen, thank you for agreeing with me. how much sort of -- undervalue do you think the technology space is? >> well, i think it's trading at a price to estimated growth ratio, karen, of about 1.5. when you have utilities trading in at about a 3.5 peg ratio. so i think there is a lot of room in technology on the up side. >> what do you think happens after the end of february, beginning of -- sorry, the end
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of january, beginning of february, jeff? >> i think you get -- i think you get a pullback. it's always been within the construct of a secular bull market that's probably got another seven or eight years left to run. >> jeff, it's tim. was there anything encouraging about last quarter's earning season that has you say, hey, maybe this earnings recession is over? >> well, the negative neigh bobs told us the third quarter we're going to be negative again. i have veered that the profits trough came in the second quarter of this year, and we're going to transition from an interest rate-driven secular bull market. i think that's going to become increasingly evident. >> jeff, great to see you. thank you so much for your time. jeff saut of raymond james. >> dan was a negative neigh bob. >> i don't know what is. i could major an argument for 2017 if they do not signal a
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heck of a lot of activity on the rate increase run and you get technology -- big-cap tech, amazon, google, apple, facebook back on board, all the stocks down 5 to 10% from their recent highs here. we could go straight up, meaning the s&p 500 if we don't have the rotation over the last few weeks. if everything gets on board for that beginning of the year rally, then we could see -- easily up 5% in the first two months of next year. if the sentiment remains the same way and we have incrementally better data and rates that remain low for a while. >> steve liesman was on the air today wrapping the fed speak today and sounded like they were acknowledging the fact there could be a lot of work ahead for the fed to do. right now it's unknown. sounds like they're going to take a wait -- that's -- >> the new york fed -- >> a bill dudley. we glean from the speak today. we don't know what's going to happen so they don't know what they're going to do. good for the markets, no? >> everything has been good for the markets. effectively, right? >> said we're behind the curve on the rate hikes, would that be
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bad for the market? >> i wish i knew -- i will say this, though. in terms of the transports, because that's been bandied about. look at where we close today. look at what the all-time high was. i think at the end of 2014, 2017, we're right there. the russell blew through that similarly. and apparently, it's nattering neigh bombs. a richard nixon spiro agnew thing. >> are you correcting? >> on the fed -- clearly, the first hike is pretty much baked in. it will be bad if it doesn't happen. because something went amiss. i am wondering, though, after the fed last year, they were in this situation. they gave us their guidance for the year. and then quickly had to change that. why go out on a limb again, and talk about your guidance beyond any relatively short amount of time? there is obviously things going on in europe that, you know -- a lot of things could derail what their plan is.
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i don't know why they would -- why risk it? >> right. >> why box themselves in a corner? >> coming up, a "mad money" jim cramer spoke to the ceo of united technology's greg hayes after carrier made a deal with donald trump. we'll hear the comments mr. hayes had to say about the president-elect. plus, used car sales surging and it could be signalling a major shift in the auto market. we'll explain what it is and how you can profit. and is disney better with or without espn? analyst making a bold call for disney to dump espn. could the company be worth more without it? the traders weigh in. much more "fast money" still ahead.
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welcome back to "fast money." jim cramer spoke to united technology ceo greg hayes since last week's carrier deal. here's what hayes had to say about the agreement. >> look, i think if we can see a renaissance in manufacturing in the u.s., that's a good deal for the u.s. but it's got to be a renaissance and it's going to come from more thoughtful regulation and more competitive tax rate. i know paul ryan is on the right track to do those things. >> you can catch the whole interview at the top of the
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hour, 6:00 p.m. eastern time with jim cramer on "mad money." let's talk about this on the desk. i mean, if you read between the lines, it sounds like he's saying there has to be some sort of policy in place to make sure it's all manufacturing that will want to be in the united states. it's not a cherry-picking sort of theme that donald trump has done. i don't know. >> he's clearly -- i mean, listen. it's not just tax policy that needs to change. it's also education has to change. a lot of these manufacturing jobs have gone overseas because they're low-skilled jobs they can do cheap over there that traditionally have not wanted to be done here. when they come back here, what he's not talking about is automation. and that is going to be a technological thing and then it's going to be educating workers to manage this new form of manufacturing. to me, there is a huge gap between what was just announced last week and what's going to be in the future, and right now they're on the wrong side. that's not a political comment. that's just -- that's just technology. >> my comment to that, which may sound political, if you're an industry where, frankly, your
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company is not effective or not profitable or certainly not competitive here, get a new job. i mean, i know that's easy to say and sounds harsh. if you think about where a lot of manufacturing has gone in the united states in the last 40 years, it doesn't just happen. this is not a manufacturing hub of the world any more. so to have companies suddenly try to be competitive by putting people here, that may be a political statement. >> think of how many industries have gone priced out of the u.s. market from textiles to steel manufacturing. you could go down the list in the annals of industry. >> but if you create an environment, and we have heard this from countless business leaders, not just from utx, that you incent companies to actually pay their workers more, be more efficient. by the way, it still may mean less jobs. whether it's tax policy which has to change and sounds like it will, and that's good news, i think you're making an environment where companies can be more competitive here. but it doesn't mean you keep jobs here at all expense. >> and then punish them if they can't be here. >> and the tax change is
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two-fold. not just the corporate rate here. it's the potential repatriation and what that looks like, making us relatively more competitive in the world, which we are not. so that's one thing. i think the health care thing -- that's been a big -- a big cost. i don't know how they're going to address that. we haven't really heard anything yet. but it's interesting to see this sort of -- i don't know if it's a hidden message or what exactly he's trying to say. >> i don't think it's anything hidden about it. >> what -- you mean what hayes said, the united technology ceo or what donald trump is signalling? >> well, i think it's a little bit of both but i was talking about hayes. >> it's interesting. so this is how i look at this. how do you trade the stocks around this? i think utx got off really cheap with this one. they're the first one to go. >> got incentives. >> got incentives, relatively inexpensive. now they're entirely off everybody's radar screen in terms of going forward. they won't come back and beat this drum again.
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what does it mean? 2015 was an abysmal year for united technology. seems to have found its footing. reporting in the middle of january. industrials seem to be getting their legs back. to me, here is a stock at 107.5, has all the potential to trade back to the all-time high at 125. that's how i look at it in terms of the political ramifications. >> if they are going to get a little more favorable of a look the next federal contract that comes up -- >> who cares? i mean -- >> i'm not saying it's bad or good. i'm saying from the standpoint of a utx shareholder, may have done the right thing. >> let's look at the underlying businesses under a lot of pressure, otis, pratt. i don't think the company is particularly cheap and hasn't rallied when this supposedly good news has been there for them. i'm neutral at best. >> the press conference -- >> you know what -- >> i mean -- >> in july, pratt and whitney got an $873 million contract
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from the u.s. defense department. this is like -- you i can't believe i'm saying this. sarah palin said it. she's -- being thought of as somebody who could be a cabinet member. she is saying this is crony capitalism at its worst. i think it sets a horrible precedent. they're going to get in a difficult situation. >> the full interview with greg hayes, ceo of utx at the top of the hour. if you're tempted to buy the dip, the commodities dennis gartman is here in the house. in the meantime, here's what else is coming up on "fast." >> i don't think we're right for each other. >> that's what one analyst is saying about espn and disney. calling for the mouse house to spinoff the worldwide leader in sports. how likely is that? we will have a special report. plus, used car sales have gone wild. >> 1973, cadillac kup deville.
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that price is too high. >> well, maybe not that crazy. but sales of used cars are surging, and it could signal a massive trade in the market. we'll explain when "fast money" returns. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.
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sustainable organization we can be. any time you help a customer, it's a really good feeling. it's especially so when it's a customer that's doing such good and important work for the environment. together, we're building a better california. welcome back to "fast money." the trump rally continued today with all major averages closing in the green and the dow posting yet another record high. here's what's coming up in the second half of the show. one analyst calling for the breakup of the century. we're not talking about brad and angeline. we're talking about espn and disney. plus, from russia with love. behind the more than $2 million bet that says the country is already sizzling stock market is about to surge to even greater heights. we start off with the energy
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space. oil hitting a 17-month high today before giving back the gains. jackie deangelis with what fueled today's volatile movement. crude, as you mentioned, continues to rally. today broke through 52 bucks a barrel, a critical resistance point. feeling the rally, the opec production cut from last week. but it's also a trump trade. the president-elect has made it clear that he's going to be pro energy, rolling back regulations and approving projects to spur industry growth and job creation. where have we seen the biggest gains? we'll take a look at the xle and also the oih, two of energy's etfs up more than 10 and 20% in the last month. also take a look at big oil. you've got names like exxon, chevron, hest and in addition to that, the refiners, some of the services too. kinder morgan a big move there. the most recent news about the dakota access project allowing the trump administration to kind
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of tip its hand on what it's going to do with energy policy. a spokesman saying that the president-elect is committed to construction of the project, and it will be reviewed when he's in the white house. the assumption here, that it will be a speedy approval process. so the take-away here, the change is coming to the industry at a faster pace than expected, but there's also some risk. crude needs to stay over 50 bucks a barrel for that momentum to continue. melissa, back to you. >> all right, jackie deangelis, thank you. so will opec stick to the terms of their deal? such a pressing question. the commodity king decided to make an appearance. welcome dennis gartman, publisher of the gartman letter. you said there was going to be a deal. but then thought, oh, you know what, they're probably going to cheat. >> they will cheat. >> when do they start cheating? when does oil fall apart? >> it's only a matter of time before they do cheat. this doesn't go into effect until january. they can't begin cheating until january. they'll begin cheating by february or march. always have, always shall.
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it's not going to change. not a problem. i think what happened today, however, the fact we have not heard from the russians really important russians. we haven't heard frommy gore searchen yet. he said he had no intention of curtailing production. he hasn't said anything, and i wouldn't be surprised if he says i'm not going to take part in this. i think you've got to $52. i have been on here several times i think 52 plus a contango of $4 out to one year, gives you $56 for a one-year forward. every fracker is going to make money, and hedging that aggressively. it's going to be hard to push wti much past $52. >> in trying to think of oil's course and laying out one scenario, another parallel sort of situation going on with trump administration policies. if the trump administration makes it easier to produce oil, is that a downward pressure, and how much of a -- i mean, we don't know what anything is going to be.
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>> certainly not bullish for crude oil. people supplying sand to the frackers. clearly bullish for them. it's detrimental and overwhelming supply. an awful lot of oil that had been plugged, $52 brings the plugged oils online quickly. >> how many of those are profitable? i realize there are a handful of guys that can be profitable at 52 also. a lot of that has been taken off line. you have shut-ins around the world, and unless technology is well behind, i look at it as i think it was a race to pump as much as you want into that opec meeting. and that coming back a little bit off that for russia, what's the big deal? but that -- at 52 bucks, i think a lot of guys are out of business, frankly. >> i'll disagree. respectfully disagree. plenty of people can produce crude oil. as i like to say, unless god was a segregationist regarding crude oil, there is plenty of land
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that has not been touched yet in russia, in china, in brazil, to begin the process of fracking. we're the only country that's done it. we have been able to drive the cost down dramatically. we are about to begin exporting that technology to other countries and haven't begun starting that yet. there is so much crude oil to be supplied in the market. it's difficult to get a sustained rally. >> so it sounds like right now you think that the bias is to the down side in the crude trade. there might be longer term a rise to 56. but right now -- starting in -- starting in february or march, there is going to be cheating and then the trump administration is going to come in and possibly put into effect policies that could drive the price lower. >> i think it's going to be very, very difficult to get much past $52. i said that two months ago. i said it a month ago. i'll say it again today. got right to 52 and stopped. as long as there is a contango, as long as there is a carrying charge for the one-year forward to put one-year forward crude oil out to 52, 54, 55, $56,
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that's imminently profitable. hedgers like it, bankers like it. >> one thing we didn't talk about, the strengthening dollar should also add -- be a bit of a headwind as well. >> great to see you in person, as always. >> good to be here again. thanks for having me back. >> dennis gartman of "the gartman letter." >> anadarko certainly one of the names has some scaleability into 52 or $54 oil, one of the few developing free flow now. companies making a lot of money that are going to take market share at 52 to $5, they are one of them. >> karen? >> yes. well, kudos to tim. tim has been spot-on in oil. for me, if you really believe in the continuation of the bull market, which i'm scekepticaske. i think the oih is more turbo charged, more turbo charged than the underlying commodity. you have these companies that are levered, and if they start
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to be able to earn more money, you get into a very virtuous cycle in terms of earnings and do it through the oih. >> dan. >> i agree with you. kudos to you. the xop also works like that too. i -- expect some of these oil stocks to consolidate some gains here, near-term. the xop had the breakout. obviously the commodity did trading at 16-month highs. look at a name like schlumber r schlumberger, obviously need to have an earnings rebound in 2017. i know it looks expensive on existing numbers. that's one here at about $84.5 that i think you could probably see a breakout if oil stays where it is as new projects come online in 2017. >> i'm with tim. and we didn't talk about this, but i am with tim on anadarko petroleum. they're close to $1 billion at the end of october. blew through the numbers that were supposedly what we have in terms of cash flow. we talked about the freeport-mcmoran acquisition back in september 13th. i think they priced a secondary at 55, $55.5, off to the races
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ever since. a lot of upgrades coming in now. i think the stock has room, believe it or not to the low 80s. >> sticking with oil, russia's stock market also getting a bump after the recent oil rally hitting a new 52-week high. dan has the details on one trader's $2 million bet. >> the rsx, the etf that tracks some russian stocks, trades here in the u.s. total options volume is three times average daily volume in the rsx today. and one large buyer february calls looking out to february expiration. $25,000 bought for 87 cents when the rsx was trading 20 and a quarter. those are in the money. break even, up about 3% from the trading price. one thing i thought interesting about that choice of strikes and the break-even, look at this. 2087-ish, that's where the high was in 2015, the breakdown level from 2014. here's the other thing. why are we talking about russia? i know dennis was just talking about russia as far as producing oil. look at how correlated the rsx
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is with crude. they went the same exact way. they have been tracking one another here. this is really a defined risk way to play for a breakout and something that may be long in the tooth. the rsx is not a fantastic instrument to track russian equities 100%. up 35% on the year. up 70% from the february lows. this is a defined risk way to do it. >> interesting that you were -- wasn't it your final trade? >> it was my oil trade last week and ultimately this economy goes through the roof. where it is, dan, the rsx gets you the currency and the ruble is at 63 and change. ruble is going to move significantly stronger. so nbt, the way i would play directly. but rsx is fine. >> where can we learn more about things like that? >> you know, for more "options action," check out the full show fridays at 5:30 p.m. eastern time. thanks for asking, guy. >> you're welcome, melissa. still ahead, one analyst calling for disney to dump its struggling sports franchise, espn. is a spinoff even likely?
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we have a special report. and mcdonald's menu getting a makeover, exploring new items like never frozen beef and the mac junior. will it be enough to boost the stock? we'll explain. you're watching "fast money" on cnbc, first in business worldwide.. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.
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welcome back to "fast money." mcdonald's jumping about 1% today on a bullish analyst note, making it our calling of the day. a buy, saying november could be a big month for burger sales and the mcdonald's product pipeline looks strong right now. tim. and this is on top of a report out of bloom bergs saying they are looking to revamp their mccafe strategy in 2017. >> i think it's important. but i think same-store sales from november from what i'm hearing are going to blow people out of the water. this is a company that was at one point in the last market segment. for the last one a dwreeld run, ultimately a place where you've got -- an argument that still exists, but really a company that i think will continue to show impressive moves on same-store sales. >> yeah. guy, what dunning of mickey d's? >> it's close to 20 times forward earnings. if these comps come out, the
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market will start to play catchup again and you can see it in the high 120s in a month, month and a half, i think. dan is shaking his head no. >> i think also we talked about it before the dollar could have arch impact here. obviously a lot of growth from overseas. the north american komps have been better. but in a down trade for the last year, and so they're anniversarying a lot of the changes. >> you know, by the way, this isn't the time to talk about the dollar, but the dollar is down six or seven sessions. this whole from multinationals coming under pressure, a limit to how high the dollar can go here. is disney better off alone? an analyst saying the media giant should dump its sports network, espn. julia boorstin is here onset for an appearance with all of the details. julia. >> so great to be here. that's right. rbc outlining whether disney
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should analyze espn. saying separating espn suffering from concerns about cord-cutting would improve disney's growth rate and more efficiently price the media giant's assets. k-health says disney could spinoff espn to a separately traded public company or find a buyer. doing either would put disney more in play for m & a, putting cash on the balance sheet, disney could use for acquisitions or organic investments. disney ended 1.5% higher but not just on this speculation but on news disney films have set a box office records on the news of the strong performance this past weekend. it's the strength of the movies and how they play into theme parks and products that ultimately determines disney's future, says rbc's cahill. but plenty of reasons that it's worth it for disney to hold on to espn. not just espn's cash flow but the fact that having espn gives disney more negotiating leverage for its whole bundle of channels.
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january month loan suggested that espn back in november, when i asked disney ceo bob iger about the suggestion, he said that it was just malone's speculation. here's what he said about why it makes sense to hold on to espn. >> we're dealing with some near-term issues on the subside. eyes wide open on that. not trying to hide anything. but you know, we think long-term prospects for espn are just fine. >> no word back from disney, but iger certainly dismissed this idea of spinning off espn on disney's last earnings call. >> we're trying to rack our brains on what some situations were, and one we could think of, viacom and cbs, and cbs looked at the problem child of the two, and via come healthier and now looking to remerge. >> yes, i feel in a way espn is a totally different beast than viacom and cbs. and that was a different time, ten years ago when the two companies split off. right now, if you look at the revenue and the profits of the
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media networks, that's the biggest chunk of disney's business. espn is obviously just a piece of that. this is a business that has a lot of long-term rights baked in, and from disney's perspective, you could see why they want to hold on. >> dan. >> no -- >> no, it's not. you go. >> all right. so i was going to ask, you interview iger once a quarter and probably talk to a lot of people out there. when he says espn is just fine, how do you take that? you know what i mean? what's a concern level? >> i think what was really interesting about this past quarter, when i interviewed him and he made comments on the earnings call, he really assured people. he acknowledged there are some near-term issues but taking steps to make sure there is profitability over the long run and growth. and sounded like there would be a year working out issues. bam tech, a piece of bam tech and laid the ground work to buy the rest. and deals like that have been reassuring people that over the long-run, it makes sense to have espn in there. >> what would espn ultimately be
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worth staying alone? >> i think there are a lot of questions that it would make sense to have it be a spinoff or sold. and i'm not sure what it will be worth. i think that we have to remember, it's probably worth less than if it's part of the bundle for disney. because now disney uses it for negotiating leverage when selling for everything else to cable distributors. >> julia, thank you. good to see you in person. julia boorstin. >> great to be here. >> you're making the point that a spinoff would make far more sense. >> i don't get the being sold part and what would that say to the market if seemingly they're such an important asset to them. and now it's time to sell. we'll get a good price. i don't know. i am very skeptical of that. maybe a spin -- maybe. but i'm skeptical of that, as well. i think they will put in the time to attempt to fix it. >> well, i mean, spinoff right now people would say, you know, back to dan's question, this is a time of panic, i don't think it is. but ultimately put them in a position to evolve with the industry. meanwhile, some of the parts if you want to do that with disney, look at the studios and their core business and you look at,
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you know, amusement parks and some of the consumer product side of the business, these are all amazing businesses. and they're ones that continue to grow quite rapidly. so on some of -- you could make an argument disney is being discounted by espn here, and therefore, spin it out. >> when it came to me, actually was -- g & g capital. g got rid of ge capital potentially at the worst -- at a trough. >> i disagree. >> well, they didn't get rid of it at its zenith. >> they had to take it, it was 2008, they had ge capital and then such an albatross, regulations, other things. >> but in terms of where it was -- >> today would have been better. you're right. >> at any rate, how do you trade disney right now? if you go back to court, november 11th they reported. that was not a great quarter. and this stock, which closed at 95, trading with a 92 handle in post earnings, until bob iger came out and whatever he said, assuaged the fierce of the
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market. now it means the market is seemingly play catchup and it could get back to 10 a. coming up, when it comes to buying a car this year, everything old is new again. phil lebeau will tell us exactly what that means. phil. >> i mean, what happens -- trump -- [ no audio ]
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you got it! what do you think? if you're going to wish, wish big at the lexus december to remember sales event get up to $2500 customer cash on
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select 2016 and 2017 models for these terms. see your lexus dealer.
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welcome back. they say one man's trash is another man's treasure. that's exactly what is happening in the auto industry this year. cnbc's phil lebeau is in chicago with more. hi, phil. >> hi, melissa. used auto sales on a record pace for this year. you might be saying, how many can they sell? well, they're selling way more used vehicles than new vehicles. new vehicles, $17.5 million this year. we're on pace to see almost 41 million used vehicle sales this year. in the third quarter, the average price for a used vehicle, a little over $19,000. it's up about $400 compared to the same time a year ago. and the buyers are the ones who have the top credit ratings. they're buying more of the used vehicles. in fact, that's the biggest growth when it comes to used vehicle loans, those are prime and super prime credit. you've got a wave of vehicles coming off three or four year
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leases being pushed several years ago by the automakers, coming off, going through the auto actions, and as a result you've got auto prices at the same time, because there is so much inventory coming on the market, they're growing a little bit slower than new vehicle prices. you put that all together, and it makes it a very attractive time for people who are not only looking to buy a used automobile, but also for the auto dealer stocks and auto dealer chains. pens key auto group said they would be buying a used only chain in pennsylvania and new jersey. why? because they think they can scale it nationwide. this is where the growth is when you're looking at the dealership group in terms of their future business plans. used automobiles, they believe there is a lot of growth potential there. guys, back to you. >> so phil, when we think about new auto sales, how do we think about the used auto market? does it trail a peak in new auto sales? >> in the cycle what we're seeing right now when you're near the end of the new cycle and doesn't mean we'll see a
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falloff, but when seeing it plato like this, the used cycle continues to grow faster than new vehicle sales for at least a couple years. the percentage growth is going off 4% for used and what, maybe a half percent, third percent for new. that's likely to continue for the next couple years if the trend holds what we see with past auto cycles. >> all right. phil, thank you. phil lebeau in chicago with that story. guy? >> hi. >> phil right. this is -- over the summer, tim and bk had a big argument about mike jackson and autonation. >> it was epic. if i wasn't in touch with what was going on with mike jackson, i didn't know the economy. >> we'll say this, though. you look at that stock over the course of this year, the stock has not been trading well. i think that was bk's point exactly. if what phil says is true, autonation at ten times forward earnings with a pretty significant short interest is a pretty interesting trade on the long side. >> yeah. >> also, if you look at hertz,
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they have a giant, giant fleet. and if the prices hang in there, that is good for them. >> they seem object literally, again on the wrong side of history. when you look at the wrong side of hertz and avis and the way they acknowledgt, unless they h they get into the uber sort of business -- >> and so i want to go back to the autos, and i want to look at gm trading less than 4 in the last 12 months and that's the whole reason. the last 12 months. earnings like that to me are something that are going to be both affirmed and to me -- this is discount at a time when people priced into the end of the cycle two years ago. interesting. >> gm seems to be the well -- was your first car a gm car or something? >> it was not oh -- i'm getting set up here. do you want to know? >> yes, set it up! >> i had a porsche 914. >> >> of course you did. >> it was a volkswagen engine, a cool-looking car. by the way, that was my paper route money that made that car. >> sure. we just want to get that out
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there. up next, karen looking at one mega tech stock she says is oversold. more "fast" straight ahead. yeah, chevy was great in that. who played the wife? beverly d'angelo! juliette lewis costarred as the daughter. chris columbus was the director... it's called claymation... narwhals really exist... actually guys, it was the ghost of christmas past... never stick your tongue on a frozen flag pole... yukon cornelius... "die hard" is considered a christmas movie! that's the unlimited effect. stream your entertainment with unlimited data when you switch to at&t and have directv.
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what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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"final trade." tim. >> restoration hardware to me is the home improvement trade and luxury trade. stay in this one. >> karen. >> yes. facebook had a nice bounce today but that's hardly anything. there is still great value here. i know it's out of favor. in the long run, be happy to own it here. >> dan nathan. >> xlv, i like it as the dogs in
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the dow. >> guy. >> lululemon, sister! >> all right. thanks for watching. see you back here at 5:00. in the meantime, don't go anywhere, jim cramer's exclusive interview with graying greg hayes. that starts right now. my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to make you a little money. my job isn't just to entertain but to teach you. call me at 1-800-743-cnbc. or tweet me @jim cramer. how can the same things that sent us down not that long ago actually be totally ignored now? how can we have still one


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