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tv   Fast Money  CNBC  March 28, 2017 5:00pm-6:01pm EDT

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border, it's brigg up 20 years ago the good friday agreement. >> exactly. it's surfacing. all these things we thought were settled. we have a new phase of post-history. >> far from it. it will be interesting to watch how we all play out. thank you so much. michael santelli. >> that does it for "closing bell" "fast money" starts right now. >> wall street is on fire, the dow smacked an eight-day losing streak. the dow has rallied almost 300 points on yesterday's loans, the house speaker ryan said this about the trump agenda. >> we want to get it right. we will keep talking to each other until we get it right. we will go figure out how we get this done. >> and with that the trump trade back in full force, financials up 1.5%, discrims not too far behind. the market will help by a friendly fed and dovish
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comments, with health care reform still on the table, a possible tax reform infrastructure deal coming this year is the best thing to do to keep calm and buy on. the process. >> it does seem that way. if you look back on friday, what do we see? the markets are actually higher on friday. we thought the bottom was coming out of the market w. one line, speaker ryan cures everything. to me, i'm actually shocked at this, the market is giving the leeway to the administration. which means, once again, we are all missing something. i said yesterday, i said last week, i think i'm missing something, because the market continues to rally when i think it has every reason to sell justify. the market fought. once you get a positive headline like this, where, okay, maybe tax reform is still on the table, the market want 's the rip higher. so, yes, i do believe you stay in these long trades, i do believe you buy on dips, because there is something i'm missing,
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it's definitely both. >> the safe trade is a lot longer than people thought it would be. >> without question. they still closed lower on the day. we talked about it at the top of the show the mix was down in a pretty significant way at an environment where everybody, myself included, would think the bid should be significantly higher. today the vix is down 8%. we talked about a couple levels, i'll say it again, transports, absolutely 160 yesterday, rallied significantly today. the russell iwm continues to hold above 130. listen, i don't want to be some crazy -- believe it, i'm not, i will say, once again, as long as those two indices stay aowould have those levels the s&p is intact. >> i think the sell-off from the highs earlier this month is pretty orderly. in a lot of ways, we know what the street was. we looked for 170 days without a move in either direction. to me, i think you have a
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scenario the meltout was a breakout. you had an orderly sell-off. i don't know why the market could give too much credence to what paul ryan said, he comes out of that mess pretty ty damaged. if they were actually to get a health care plan in place, it would be something the democrats hated more than last week. then you basically have -- >> is there something that we are missing? don't you this i the markets rallied at something other than -- >> it's the other way. i look at it the other way around here, right, the health care bill, whether it got passed or didn't pass is unlikely to cause a reception in the u.s., so any sell-off was simply a dip to be bought, assuming that's the only thing that would or would not cause a recession with u.s. earnings and would still be intact. to me it wasn't that big a deal. to me the tax reform, that's a bigger deal. that's what the market rallied on. >> health care makes a smaller tax reform possible because it doesn't free up enough dollars is there that was the problem
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over the last couple days, few look at the chart they just put up there. the high tax stocks, gold man sax put that out. you see how it's under performed. to me that tells you the whole story on the market right there. it's all about tax reform. that's why ryan's thing today saying, hey, we will get this moving. we will have tax reform and maybe infrastructure together. that's enough for this market to have an excuse to rally. >> it could be the market is trading on earning, it should be earnings per i don't think. it will not change, they are what they are for right now in terms of estimates. >> we will find out about earnings and probably two, two-and-a-half, three weeks now? >> yes, we can have that conversation. i don't think -- listen i do think there is some semblance of that. the market is changing over the first five or six minutes t. hope trade is intact. i got to sell you something, i'm not certain what will derail it at this point.
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>> i'd love to hear. >> listen, you know, i'm kind of hoping this happens. i think there will be a full plane political scandal in washington in the not too distant future. i think that is the thing people are not pricing in that puts out this legislatef agenda. this is brush fire after brush fire i think will turn. >> you are hope something. >> i am hoping for it personally. i think it seems pretty obvious at this point. this is not going away. we had political scandals. bill clinton was impeached. we seem to forget that. that was in a massive bull run. >> we don't forget what happened in office under bill clinton. >> is that going to impact the economy? are people going to stop buying cars? >> we spent the last week talking about the volatility off of the high, because of their inability to get through this health care plan that makes the other things possible. i think there is very few people talking about what that means for the market if pe do. the economy has a 10% correction
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or are you talking about the markets? >> i just don't know. if you are telling me we can't get tax reform and deregulation and put something on the table we have the likelihood -- >> i agree, i think we get a 5-to-10% correction. >> what happens? trump gets replaced. we have mike perns, a more conservative president and more of an agenda you hate. we already -- people have missed this rally by 10% because they hated the guy that was elected. how much more? how much more do you miss or bet against it just to bring it back? freezing more regulation right now a tax cut. so what we haven't realized if freezing what he doesn't need congress to do. no new regulation is actually a tax cut. >> my personal opinion, i have been wrong on a few months for this, i think that guy in the white house is the single most destabilizing force -- and the market has unbelievable gains.
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>> great, it will be a long four years for you, the market still rallied. >> what is your marketing position, though? it's conditioned on how you feel? >> i don't listen to rallies, i think the people long in it to win itsh that's what you do. this is the beauty of this show, we can talk about this grand stuff and time rises. i can go to that beautiful smart board and layout strategies we do every once in a while. that's why people watch "smart money." it's not just the earnings today or that number tomorrow, it's looking at it wholistically, surrounding the trade. we used to talk about very rounding the trade, not hoping the guy blows himself up in the white house, what you just said. the whole market -- the markets can move higher even if you hate the guy in the white house. >> yes, it can, steve. speak speaking of the smartboard, one of the highest trump financials is surge, it's now the time to buy. hi, rich. what are you looking at?
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>> reporter: mellissa, this is exactly the time to by. you have to buy right now when you can, not higher when you have to, we know the financials have been one of the biggest success stories coming out of election. you see that phenomenal run. we repeal and retrace 9%. we test that whole key support. not just horizontal at 23. >> that 100-day moving average. we have a false break one day below that. we capture that zooming average. we zoom in on the banks, they're a little harder to hit that 12% pull back. similarly, tests and holds that key horizontal support in and around the 90-level bmx, also the 100 day moving average. obviously, what's weighing on it outside? politics, but, of course the weakness we seen if ten-year yields. a lot of symmetry here, we see these haramis, these spinning tops. we love our japanese candlesticks. the ten-year yield remains intact. we are set up to move higher in
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terms of yield, which will support the pryer to charts. now, let's get to specifics here. what do we like? j.p. morgan chase here? the stock has held up relatively. we test and hold the 100 day. we see that theme here. we recapture that 87 level. that's a stock going higher. we some out and see a chart by morgan stanley. this has been hit, a 15% decline. look at this, the 40 level, as long as we have north dallas 40 here, that prior resistance, this stock is going higher and finally, if you want to trade locally and think globally, let's look at the region also, we know they have been harder hit, independent banker, look at this weekly chart here, textbook, bullish flag once again, test and hold prior resistings, we have a $70 target on this stock. this is a regional to buy on the pullback. >> you had me at japanese candlesticks. come on over, they will bring in the chair. rich ross will join us on the
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set. >> rich ross, bringing it once again today. i have a caution, rich. >> i like the chart. now you can see where the line is that would be support. don't you want to see it bounce off before we actually go in and buy? because it could easily go to the down side, right? >> i agree, any reversal is a multi-day process the longer you wait, there is an opportunity cost to waiting. in my view, we seen a plastic setup. have you this plastic 10% correction we highlighted in the untils, slightly higher in the dwreeshlgsd kalbach in crude. the rally in yen, sort of that safety trade. so the band has been stretched, but as we highlighted last week, it is perfectly set up to come back into place. the longer you wait, you get reassurance, obviously, you miss out of cash. >> what struck me today that bond under performed. you saw the banks rally a lot. bond yields, they moved a little bit. not as much. if you looked at bank stock, you
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would have thought you had a massive sell-off. which is a better trade, should i buy the financials? >> i think the banks will give you more gearing. to your point, it's a very astute point. the yields took a while to catch up with the market. it tells you about this goldilocks backup for stocks here, which is to suggest that yields can move up. not too. just enough to give us the confidence that the back remains in place. i think you buy the banks to get that agreement. let's not kid ourselves here. interest rates will make i break out above 260. i would be a seller if terms of price and participation of higher yields. >> i don't want you to play the stock game, is there one small cap, large cap banks? is there one spring-loaded to the upside did you see? >> i think morgan stanley is compelling. we are talking rsis here. you go through these big banks, 31, 30, 29 on the major indexes.
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are you oversold in the context of a powerful uptrend, almost a 15% pullback in morgan stanley. you are kind of locked and loaded here. i like morgan stanley. >> bigger question, how did the s&p chart look? >> i think it looks fantastic. last week we had a false one-daybreak beneath it. it gives us pullback off the top. it's intact. it's coming back into play vis-a-vis higher yields. the crude found itself busier today. you give yourself 260 on the ten year, banks over the course t. macro will come into support. i think stocks look great. >> rich, thank you, good to see you. strong tie, by the way, what are those things on your tie, by the way? >> are they unikorns? >> for the purpose of our discussion, they are rainbows and unikorns. >> all right. so what did you do today? ? for me i stuck in silver and gold because you had a little
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weaker dollar in the morning. i think the trade is one i talked to rich about, shoring bonds. you can buy tbt. i think that's the way to look at it here. you know if the yields break below 230 than on the ten year. that's where you will stop out of that trade. >> i think the bigger question for seems to me do i stay long on my longs? i am heavily into this market. i am staying long. i do think it's not valuation. i think it's rotation. to richard's points, if yields are moving higher, you have to have that exodus out of bonds into equities. as i started the show, as i said yesterday, i'm missing something and there is still equity strength here. >> on a percentage basis, how much of staying long is based on hope? >> i'm not basing on hope right now. i based the rally off of trump probably 80, 90% on pro growth policies, but as i said, with no new regulations, that still makes a tail wind for corporations. >> coming umm, apple hit an all time high today, if you missed
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the move, dan niles, got two under the radar stocks, you can still buy but catch the rally. general motors is under pressure from david einhorn. he could be able to hit a major road block, we'll explain. >> the final four, brian kelly steps onto the court for the first time to take on nine time champion altria to american express to win. much more "fast money" when we return.
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we have breaking news out of d.c. >> hi, mellissa, change of regime means a whole new staff, not just in government but also in political parties. tom perez is the new democratic national chairman. he has asked for res ig nation letters from everyone on the staff of the dnc. he is now evaluating whether or not those people, it's been reported by the way from our colleagues at nbcnews.com, they, he, is evaluating which of those staffers is going to stay on. of course the democratic national committee had a rough 2016 campaign, in part, because of those leaked e-mails and, of course what happened to hillary
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clinton. they hope to do better in 2018 and this is the way they're setting out on that. even as they had a victory in washington last week on health care, guys. >> thank you very much john harwood with that news. sticking with washington here, president trump speaking today after he signed an executive order to roll back energy administration from the obama administration. take a listen. >> my administration is putting an end to the war on coal. with today's executive action, i am taking historic steps to lift the restrictions on american energy, to reverse government intrusion and to can sell job-killing regulations. >> the move to send coal stocks higher, a little buyer beware here, a lot of the names in the space have shrunk considerably since going public or going out of business altogether. is this the trade you want to chase? yes, there will be a lot of data. >> this is definitely a flyer. one day, talking about reg
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haitian, doesn't cure industry. a lot of these are heavily shorted names. arch coal came out of bankruptcy, if you look at consol, cnx, it has 1.3 billion revenue. i think the big thing for me you don't want to rush into the games, swn, southwestern energy. very reliant on gas prices, so if you look at those names, at the very least we have competition for utility plans, for talking about whether they will run on natgas or run on coal. if you want to look a little further down and say you know what, maybe this is a headwind for tail gas, maybe not a longevity. >> were the coal names battered because of regulation or battered because of forces within the industry that drove them to bankruptcy? >> a couple hundred years ago, there was a war on whale oil, in other words, technology moved,
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things moved, things become obsolete. in coal, there was never a war on coal. >> there was an e war on coal. but, yes, natgas, the competitive market was probably -- there are so many other things due to e higher standards did nothing and they'll be the if irs to tell. >> you so se man ticks whether it was a war or not. maybe they wanted cleaner air in west virginia. what do i know? i don't live in west virginia. >> that being said, i think it's a total flyer to buy stocks. i think u.s. steel works, but to get these coal games on the back of comments from president trump to me is a 50-50 at best. >> next time, general motors rallying today after billionaire investor david einhorn said they split into two classes of stock. they had interesting words to explain the halftime report earlier today. >> i would compare it to an ice cream stand that just serves
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chocolate and vanilla swirl ice cream. if you gave investors more choice, some people like chocolate. some people like vanilla. some people like swirl. if you have implemented our policy, you would wind up with one share even. so if you loo tick swirl that you have today, you could keep the swirl. if you would like more dividends. you could sell the capital depreciation shares. if you like the capital depreciation the low multiple, you could sell the dividend shares to buy the capital depreciation shares. >> obviously, that was the swirl that he was talking about. despite einhorn's optimism, gnc mary barra rejected the split saying it would create an unacceptable level of risk. specifically, she was talking credit risk for investors, moody's echo this comment. this after david einhorn said that credit argument was a red herring. it would actually be credit negative. david einhorn isn't the first activist to take aim.
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that's the point you were taking on. >> if you remember back late 2013, carl bass took a look at this thing, put out a very extensive, you know, full case for xm. stock was actually at it's all time highs post-bankruptcy. it has been a train wreck since then. i think the auto industry is in a tough spot right here a. lot of secular things are going on that make it a challenging trade. i'm not sure david einhorn coming in, making this an elaborate scheme, with i is reason enough to go buy the stock. i don't think investors buy into it all when you look at the price action with gm. >> how much financial engineering can you do? they haven't acted well if peak conditions. >> maybe it works. maybe you got a couple percentage out of it. you are in an industry, i mentioned that. there are some massive head winds here. we all know that auto coverage, we know it changes the game. we know millennials aren't going to buy as many cars in the future. to me, okay. you got to shuffle things
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around, move the shelves around a little bit. knock yourself out for a couple percentage points, this isn't the growth industry anymore. so you have to do these type of things. i would not buy gm because david einhorn suggested it. >> we have an auto analyst on from barclays talking about the proposal. essentially, he said, we think people are overestimating the peak impact of auto and underestimateing the positive impact of these guys, nobody is counting that in. they're willing to give high valuations for tesla. >> it's not big enough for gm to really move the needle. they have outperformed. you look at the shortage, those guys pointed this out the shortage tesla has one bit of positive news and the stock spikes higher, but gm, we talked about it, peak autos, and interest rates rising with the client the emthat is subprime in their sweet spot. not a recipe. >> still ahead, based gripping off the platform, send shares
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reeling. why they think there is much more pain ahead for the stock right after this break. i'm melissa lee, you are watching cnbc. in the meantime, here's what's coming up on "fast." . >> that's because the god father of biotech is here. he says a trump presidency could mean a lot of deals in the biing to space and he'll name names. they are taking nine strengths in the madness contest. he is basie facing his toughest test yet. we'll tell you what that is when "fast money" returns. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. ( ♪ ) i moved upstate because i was interested in building a career. i came to ibm to manage global clients and big data.
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>> welcome back to ""fast money."" the trump rally raged on today as every major index. the here's what's coming up in the second half of the show. apple shares surging to a new all-time high, if you missed that on the move, don't worry, we got a way for to you get in. plus, we've reached the final four for our "fast money" madness, tonight it is a battle between altria and american express. both stocks surged, one can only move onto the final round. brian kelly will make his madness debut to take on the nine time champion guy adami. will guy sweep the competition once again. we will let you out there on twitter be the judge. we share facebook more than 1% today nearly 7%. it comes after facebook launched new smartphone features similar to what snapchat offers. julia has all the details.
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>> hey, for a look at the camera, urging people to share more photos and videos and to use the effect. we have light phones. we can tell you right here, it's launching these map sprays and interactive filters. here are a couple of them. plus it has partnerships, bringing their licensed content like this brand, take a look. and also this ad for ad fair this business filtering regarding the galaxy. i would say it's not a galaxy. it could be one. now facebook is also launching a story feature for sharing photos and videos for 24 hours. >> that itself the same format that facebook pioneered. instagram has an option called direct for sharing photos and videos with specific friends for a limited time to be viewed once like snapchat. facebook's larger audience can make it tough tore grow a user
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base. they say facebook changes are significant longer-term risks, fast models, drexel hamilton reiterated its buy reading with a note titled imitation is the sincerest form of flattery. there are not any ad that launch, so you can definitely see the opportunity for sponsor minded or sponsored stories, the more time facebook can fit people in its app the better. >> i think we should do filters all the time? unbelievable. >> julia, thank you. let's trade this. oh, look at that. >> pretty cool. this one is pretty creepy. >> oh, that's good. this is my favorite one. >> can i ask julia a question? >> of course, you can. >> julia, where did you attend university as they say in europe? i know exactly where she went. >> i went to princeton. >> it's an ivy league school.
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>> it's a fun one. >> we are talking having filters is so much fun. look, mr. princeton is rolling over in his grave right now. >> mr. princetop. >> just pointing that out. we are doomed at that. >> this is serious business. it really is. julia, thank you, in fact, it's so big, we are going to trade it now. >> what is a trade? >> barriers to entry for snapchat. that's a tremendous headwind, facebook can do this. now the benefit to snapchat is that the audience that snapchat covers is not the audience that will be on facebook. so that's a tail wind to them. so this, just because it can be replicate i politicked by facebook doesn't mean you should sell snapchat. i'm not bullish. i'd rather own it other than this. >> it may not be the audience that will be on snapchat. it will be the audience never on
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snapchat. if they wanted that, they can stay on facebook and have those same fimters when it comes to instagra instagram. >> i think the most important thing here on facebook, this is incremental. they can add a lot of these features, for snapchat, it's an existential threat. when you think of facebook with 1.8 billion users, snapchat growth slowed down. they need to get a lot of things to justify the value. >> all right. our next guest is a veteran hedge fund manager. he shorts the stock, he stays long. apple won capital. joining us on the fast line to say why. can we think of this as a pairs trade? one succeeds at the cost of the other? >> it's not -- it locks like a fair trade, but our view is that snapchat goes down, facebook goes up. so it just so happens to be they're both in the same space. but i think one of your hosts
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there brought it up earlier, if you look at user growth here, that's the real problem. the instagram launched a snapchat copycat called stories in august. if you look at snapchat's growth rate for the daily active users. that was 21 million in the june quarter. then stories got launched by instagram in august. their user flows to 10 million for snapchat. got to 5 million f. you look at year over year, it looks like this users are growing 50%. if you look at it sequentially, to some extent, can you go back to twitter, which is another company we were short way back then. it had the same profile where user growth was flooring. they supported five quarters. users kept flowing. the stocks got crushed during that period of time. so i don't get the fascination with this. because we've seen the story
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before when you start to slow. >> so snap's destiny to be the famous twitter today? >> well, i'm not sure if the destiny needs to be the taim same as twitter. if you said, oh, can you buy snapshatt at a billion dollar valuation. it's easy to boy t. company has 26 million in market cap. it's trading at 66 times trailing revenues. 26 times calendar 17 if you want to go out that far. and so you look at that, relative to a facebook trading at 15 times and i go, you know, i can own facebook, which is growing their users still. their user growth actually accelerated last quarter, up 18%. i can own that and sleep much more comfortably at night rather than on snapshatt. they lost more money than in revenue last year. . so you know, you are asking for a lot. it doesn't mean it can't happen. it doesn't mean the patriots can't come back from 20 points down in the third quarter. but it's not necessarily a high probability bet interest i want
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to talk about two stocks that we have not ever talked about on this show. i think maybe on this network. which are short of apple-related plays. this one, of course, apple hit an all time interday high, dan. momentum and visa vis solutions, i think i am pronounceing that wrong. >> it took me a while to get this right. so. >> this has to do with the next generation camera features apple could have and the technology needed to sort out the dplichs or the short cameras today. >> yeah. where you really made a lot of money is obviously on apple. but the other thing owning the company that adds features, nuance did well before that, a move from the g to 3 g, obviously, the prosz says or vendors did well, skyworks did well so you are comfortably trying to catch the next thing. the next thing is 3d acceptsing
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coming out. you were playing with those filters earlier, this is sort of where that takes you to, the first phase is you can scan your phase, that becomes your i.d. versus your planner. the next thing, you can do things to your face, you can go shopping where you scan your room and say i want to boy that couch off amazon, what does it look like? you will have maybe 15 million units out of a billion five phones shipped with us this year, starting with apple. which the companies you mentioned, both i believe have you know are in the next generation phone. but that eventually should grow it over a billion phones i think by 2020. generate $10 billion worth of revenue, so the companies involved with that. so there is a way to get in early where you have tremendous growth, apple, unit growth is low stingle digits. hopefully, catch the next big
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trend. >> dan, always a pleasure, thank you. alpha one capital. would you rather? >> i love this game. it's much fun. >> a long time. apple at fresh interday all time highs or this sort of basket of these interesting new generation apple suppliers. >> so apple or momentum for example? >> momentum. >> light trades, 230 times trailing. if you look at it in terms of forward earnings, there is actually epf growth. goldman sachs, march 16th or so recently upgraded the stock from now tral. that's one baby step. i think the next step is upgradeing it again, i think on a flyer, i would rather own lite for the bait of an apple right here. >> i'm down on that. we no at the story with apple. if i buy am, it will be on a dip, i'm betting on the phone coming out in the fall. if i'm looking for something that really has the potential to take off here, these two smaller ones are where you will get that kind of action.
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so i'd much rather be in there. >> dan has a way to play the big tech name for less. what are you looking at? >> if we play would you rather? i wouldn't be buying the stock. it has a three-and-a-half percent from yesterday mornings lows to today's highs, all that activity was pretty hot the stocks closing at all time high, it's up 50% from 52-week lows last february. if you are looking out to their q2, option prices are relatively cheap in apple right now. here's that breakout, it's pretty impressive. there is room down to 130, two, three, on the breakout level. option prices are still relatively low here. if you want to look out to earnings, maybe you want to define your risk or play momentum. you look out to the expiration, you could boy the may 145 calm,
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take $3.75. that's two-and-a-half percent, prices exceeded 14875. that your defined risk. this is a stock on earnings over the last few years moved about 5% in either direction. this is one what i to continue to play the momentum to find the west side. >> check out the full show friday here on cnbc. still ahead the so-called godfather of biotech will be here to talk trump, drug pricing, plus our "fast money" matter itself continues tonight. we have made it to the final four. they dominated the competition taking out every single trader with the exception of the one and only bk, announced they knock thad off the ped central. you are right, we can be the judge when "fast money" returns.
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welcome back to the show. it is time for our ""fast money"" madnesssh tonight is the start of our final four, first time player brian kelly will go up against guy adami, between
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altria and american express. guy the a record holder, 45 second on the clock. make the case for axp. >> well, thank you, melissa, thank you, desk. today, mellissa, can i ask you a question? shout it out if you want. what indicator came out this morning, extraordinarily strong by the way? it's consumer confidence. consumer confidence. 196-month high, what do consumers, what do you folks do when you feel good about things? yes, ma'am it out! >> shop! >> shop, you shop, that's correct. who wins today. >> buy cigarettes. >> wrong. >> rong, wrong. american express wins that. that costco thing two years ago passe, american express trades at, less valuation in mastercard and visa, understanding they have credit risks. bk is going to show you all great reasons to own altria, but the reality is, when you feel good and you spend, you don't
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smoke. >> 45 second going across the bk. don't be nervous. a little pressure is on. >> i'm not nervous, guy laid out an excellent case, it was based on no facts whatsoever, he appealed to you, america, he's a silver-tong devil. do not believe him, his investment pieces are strong, all that matters in this game are numbers, so let's go to the numbers, here it is, altria versus american express. you get a 3.3% dividend, american express a paltry 1.6. earnings-year-old, 7% for american express and look at these profit margins for altria, 73%, american express 18%. return on assetings, altria killing it. quarterly earnings growth, 7 fwroer% versus a negative 8.2%. so what are people buying? you know why these numbers are so much better? people are buying altria's products, millennials like that.
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they don't care about it. you got to buy altria. >> compelling, compelling. a coaching argument. >> for guy or brian kelly here on this desk. you process? >> guy. >> yes. >> where do you think, where do you think that your stock is going to outperform when you ran off on that list? where do you think your stock is going to outperform? >> so right now american express is a $75 stock. if we were to regain valuation it had in the halcyon days, we're talking about a stock that could be potentially trading $94. for altria to do something like that, they would have to pull a genie out of the bottle, much like barbara eden in one of my favorite shows "i dream of jeanie" do you remember that folks, show? you know what they used on that show, american express cards. >> again with the subtrifuge and silver tong. america doesn't like, isn't going to fall for that. >> america to post to beat his argument for altria, winning
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streak, go to twitter right now. vote in our poll at cnbcfastmoney. we will reveal the winner later in the show. we sit down to discuss trump and drug prices in the company that could be bought next. you are watching "fast money" on cnbc, first in business world wide. ♪
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>> welcome back to "fast money" let's go to kate rogers for the details. >> shocks of veritech have been halted. they received significant improvement in lung function. vertex seeks sift tick fibrosis drugs in the u.s. and the european union. up, no region in time on the stock. back over to you. >> thank you very much, kate rogers. >> the call back in 2016, megan might have been on when they talked about their potential for disappointments t. stock went from 120 to 80. does it recapture? probably no. i think the stock is north of 95 right now.
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i think it's easily triple digits. over the next couple of days. >> check out the s&p biotech nearly 1% on the sex, president trump continues to pressure the national institute of health with billions in proposed budget cuts, keep in mind, nih supports numerous drugs in the biotech industry. it's an expert opinion in the space. chairman of biogen is standing by. >> thank you so much. thank you for being here, talking about trump's effect on biotech. a lot of people talk about his effect on drug prices, this issue is talked about over and over again, what do you expect to see here and what would the impact be on biotech? >> look, as we've seen so far, there has been a lot of discussion, a lot of noise for the last year or so, through the
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campaign. idle conversation. i actually believe enough perhaps maybe a contaxpayerian view, at the end, nothing much will happen. the reason i'm saying this is because i fundamentally believe in the sensibility of the american system and if you believe in the sensibility of the system, you would not expect anything dramatic will happen on pricing. some things need to change, should change and will change, fundamental amy, we cannot dramatically change where we are, because if we do that, we will have a dramatic innovation, we cannot afford to do that. perhaps let me explain why i'm saying this, imagine tomorrow congress passed a law that said, all iphones will be priced at $60 per phone and no more. maybe they can do this and its constitutional. well, apple will look at inventory. they and their competitors will think twice about investing the next layer of innovation, of
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phones with similar device, imagine if all drugs were forced to be priced at some very low price t. money for drug development, discovering development is not a magical sum coming from nowhere. it's all risk capital from investors on wall street. they invest money knowing they will lose a lot of it, most of it because once in a while, if they succeed, there is a significant return associated with those victories. >> but i ask you other thing that drives those returns, of course, is mna. another promise trump did is tax reform. will we see tax reform? >> first of all, i don't think we will see tax reform. this may be another discussion. i'm not sure tax reform in itself will bring about mna. it's driven by consideration, not along the tax reform. it's not a big driver. >> sow don't expect to pick up
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an mna? >> i think there will be mna. it's a considerations, mna is driven by the lapse in pipelines and the unpredictability of product lunches, the need for consolidation as companies need to manage their earnings prospect, but it's not alone a matter of tax reform. >> sorry we have to leave it there. thank you so much. >> ply measure. >> back over to you. >> never enough time for the godfather over biotech, thank you both for. that i think interesting comments when it comes to drug pricings, what the repercussions. >> people don't understand how the industry works. if you want new medicines, drug pricing is a big part of it. i do think biotech broke out to the upside, today on a good tape, it was disappointing.
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i still think if you want to be some place with upside, ibb will get you done. >> the problem, though, in a world where we see republicans having infighting the democrats not having anything, one thing that rallies both sides you have bipartisan efforts is drug pricing. so i still think there is tremendous head winds for biotech. in this space. i don't know if i would rush in just yet. they need something to rally, this is probably one of those things. >> i'm long xbi. biotech bot the breakout on that. i will use this week or last week's low, in case i'm wrong on this, but i do think that the less that gets done the better here so what we are seeing in washington is positive for biotech. >> specifically meaning the smaller? >> right. you have an mna attack to that as well. >> still ahead, will bk, beat
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guy in the latest round of "fast money" madness. there is still time to vote. we will reveal the winner after the break. the power of 100 of the world's top companies. the power of a proven 15-year track record. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
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like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential. >> welcome back to "fast. "this is the moment we are all waiting for, trump guides case for american express, our "fast
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money" faithful have spoken. the winner is, very tight match -- guy! >> unbelievable! >> unbelievable! >> congratulations, guy. >> guy wins again. 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 just want to make you money. reality. reality keeps confounding the bears.

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