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tv   Fast Money  CNBC  May 5, 2017 5:00pm-5:31pm EDT

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growth in the ipo. >> by the way, mark hauthen an analyst said he wouldn't be surprised the user growth turns negative because of the strong growth and what facebook, instagram is doing. thank you, guy, for being here. appreciate it. have a lovely weekend next weekend, that's it for "closing bell." "fast money" starts now. >> fast money starts right now, live at the nasdaq market over rainy time's skwar, the traders are tim see mohr, karen finerman, guy adome, tonight on "fast" commodity crush, oil, copper, silver, all sinking this week t. chart master says one is a screaming buy. he will be here to explain this contrarian call. plus the second and final round of the french election. can marine le pen pull off a shocker? and later the or cam of omaha
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slashing its stake in ibm, if you are tempted to sell, you may want to start off with first what looks like paradise. we got strong earnings, strong jobs report. the house passes its first steps to repeal and replace obamacare. oil and interest lates are low. so, two questions here tonight. is this stock paradise and if it is, what are you buying, guy? >> it's been stock paradise now for the last seemingly seven, eight years, i think it continues to be, regardless of whether or not a tick should be and the easiest trade if there are easy trades is the financials in the form of the x lf against the $23 level, which we flagged. tim talked about it a couple weeks ago and j.p. morgan which traded down to a critical level of $84 bucks. both of them closing on change today. few look for risk-reward in this
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environment, i think both those trades work. >> there is a battlegrounds setting up for the 24 level in the s&p cash. this to me speaks to how bad corporations thought the last eight years were. they're looking for pro growth. investors looking for pro growth. so we talked about it, has he gotten anything through, this is a minor victory. he still has to get it past the senate, through reconciliation. then they have to give that back to the house. they have to give back maybe by thin margins here with the freedom caucus. i would fought count our chickens just yet. so there will be a battlegrounds here. i know the path of least resistance seems to be higher, but i would be lightning up unless you have a real fundamental reason to buy. >> think about the last. i don't think investors had it so poor at all. i think about the last eight years, before we had this administration, i think things were a pretty sweet spot. equity is terribly low. you have a fed and central banks
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accommodating that provided a put equity to say add in what we have now or don't have out of washington and are we in paradise, no, stock equities are actually very, very expensive. you get to a place where the earnings are a relief in many cases of the tech sector, they're moving up multiples, to say that you blindly buy equities because we are getting positive headlines out of d.c., which by the way i don't believe them until we get legislation. i think you have to be as cautious as last week. you have to find the sectors. i agree on the financials. i think there is valuation support. not everything. >> there is a lot of things that scare me. the party is raging right now, which it always does until the party is over. we look at health care. we are not anything close to getting to the finish line. north korea was a big deal last week. it could be a big deal next week. there is a lot of things you can put do, oil price is great for the consumer.
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why is oil down? maybe it's just in the u.s., dr. copper says there could be something to that, it could be a demand thing the always sales aren't great. you have the fed raising rates. all that having been said. those are all the fears. i'm staying long. >> if you chart. >> i'm staying long. >> to me, it's very troubling. it's oversupply. it's been oversupply. it seems like it's a conterrorized said, that saudi aramco was a trade having to sell oil. >> do me it looks like global growth is in question. things were quote/unquote okay right now. i still, few look at it. s&p, with oil, every time oil, oil seems to be the leading indicator for the s&p. it gave a full year of leads from 2014 or 2015. then you see it kind of compressed on each other. >> let me just press back on, you have an excellent calm on that saudi aramco thing.
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>> hold on a second. >> all right. >> the brent, wti spread, has actually gotten wider in the last few days, it seems just u.s. supplies driven, not weakening euro. you can see, hopefully, hopefully, micron winds in france. >> it's great to be a geopolitical issue vs. wti. so that spread could be widening for different reasons. on that chart that we just showed the reason why wti broke down, there were china risks, global growth risks. there was also as you said north korea, there was russian risks back then, too. so there is a lot of stuff that's happening now that happened then. >> why are the markets seemingly so complacent about all of this? there are things happening. >> earnings. >> earning were driven. >> that earnings, that top line growth is phenomenal. >> but we rose on the expectation for deep earnings
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plus the bunch of political stuff. and now we don't have the political stuff, to your point, necessarily. and we're still up here within a percent or whatever of record highs. >> we have right now is a year ago, people were shooting first and asking questions later. people had the dollar going to 110 people were totally wrong in terms of the macro-factors that were going to unhinge the market. you have a place where there was a lot of interesting stuff to buy. transports were not that expensive six months ago. to me the stockmarket now is probably responding from a place, i think the word last night was inured. it might be your word. you usually come up with a good word. the bottom line is we're out of place here. we said this you can't anticipate the passive flows unleashed into index funds. i own three or four stocks,
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vieacom is one, below the index there is a lot of stuff going on. >> to me it comes down to a couplef things. to answer your things, why the mark? i am in this boat by the way, every sell-off feels like this is the one and it's basically within a week the market is all time highs. people are saying, sell-offs are instrifkt. the vix closed unchanged, it's ten-and-a-half single digits today. i think the end is near when you see a day is up s&p handles and the vix is up in a commensurate way a couple of percent. i haven't seen that day in a while. >> the big part on wall street had to do with washington. trump's huge week was highlighted by the gop health care plan passing the house as well as unemployment with a ten-year low. what could that mean for the markets? the co-founder of axios joins us with a warning for the
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commander-in-chief. what is that warning? >> i think it seems to me the markets are assuming the good things will happen and the bad things won't happen. i think your conversation was spot on about health care t. idea that there was a huge ceremony for a bill passing the house is ridiculous. this bill has to still go to the senate. in likelihood it will make things difficult in the house t. chances of a health care signed into law still seems relatively low to me. the other thing is while you have this health care debate, you are delaying getting the tax reform. i think the markets assume there will be a robust tax package signed into law in this calendar year. i don't know if that's true. the politics are difficult. you have to figure out what way to get to 60 votes in the senate to cut the corporate tax rate and the individual tax rates. so i think those things the market is assuming will happen. then assuming that the bad things won't happen. i think your conversation about north korea are correct. >> that is a very tense
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situation that could get bad and ugly quick or you could end up in a trade war, depending on which had advisor trump decides to listen to on his economic agenda. so i think things are good because the government did shut down and they did pass health care and there is hope for tax reform. but hope does not mean certainty. >> so, jim, is it a complete fallacy for people to believe that he can heck, the passage in the house was at all crucial on the path to tax reform? you say that it's going to be delayed because of this, right? >> i think the two are completely unrelated. >> okay. >> i think it's a difficult one to get through the house. even tax reform, we all sit back and assume enwants their tax rates cut. corporations want it. individuals want their rates cut. it's really hard once you get down to the specifics of it. you still have a lot of conservatives here in washington who don't want to drive up deficit to get those tax cuts. if they insist it's revenue
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neutral or tax cuts are paid for, now you are talking about a much more complex and difficult political situation for republicans. so can they get it done? sure. is eight slam dunk in absolutely not. it's going to take months. i would guess six or seven months before we have a clear indication about whether or not health care tax reform will get signed into law. then the markets assume next year there will be an infrastructure bill. is there? is there going to be an infrastructure? do democrats want to do anything trump wants to do? >> what happens right now. you cover this very well. you cover politics very well. what happens right now, if he doesn't get anything done, there something in your mind that says, you know what, maybe investors and market participants were fed up with the last eight and they just want a change and they stay in the stockmarket place, even if he doesn't get anything done? >> i think that your conversation, you guys understand this stuff better than me, but the psychology of the mark the buyer right now is that, yes, there has been some regulations that have been
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removed. there have been some executive orders, some, that can have an effect for some industries. so the overall environment is certainly more pro business t. rhetoric you hear from donald trump is way more pro business than you would have we heard from barack obama. so that has an appreciable effect on how people think about investing, both at the business level and the individual level. but in terms of the structural things that could really set the economy on fire, which includes a change in how we tax corporations, you have to do that long term. so you have to do that outside of reconciliation. if you do it inside of reconciliation, it's basically a ten-year bill. >> that doesn't allow a company to do smart, long-term planning. so they have to figure out how to make it permanent. doable, make it more than people assumes the. >> jim, good to see you. axios' ceo s. that true? ten years is not going to be enough? >> for some. i mean, ten years can go by
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quickly for companies that are planning, for individuals, that seems like a very long time, i don't know if that will be enough. i they think have to get health care done to get the political tax care to get health care done. >> i look at the reports and you asked me about this yesterday, part was seeing how the stock responded, mostly to get a bunch of di views and do my work. i think this media story is evalveing. this is what comes back to me for a lot of things. >> if you look at the employment data, it is a tail wind for further progress in the house. i do think we are going for the housing recovery. i got on another name, lennar, len. i also sold micron, i lightened up further there, i believe in my bets and home builders were a strong bet. coming up, the make or break moment for retail as some of the earnings. could it be a final nail in the
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coffin? plus, slashing a stake in ibm, you might want to hold off until you hear our special report. we got the details. later, we all know about the horse. how would you like to turn time into money? that's what our traders wants to do with shares of disney. he'll break down that trade, much more "fast money" still ahead. le, want all our rooms to be tv rooms. because those are the best rooms. because they have tvs in them. and, when we're not in those rooms, we want our shows to go with us. anywhere? you got that right, kid show thing. get a directv all-included package for 4 rooms. only $25 a month, price guaranteed for 2 years. available for at&t unlimited plus customers. usaa gives me the and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children.
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we do business where you do business. ♪ ♪ welcome back to "fast money". next week is a big week for retail. the stakes actually get higher as the week wears on. on tuesday, we get results from the home company way fair and struggling accessory player fossil. beauty has been a strong player in retail. we hear from cody and elf and kohl's nordstrom's and macy's. it will be the first conference call. if you are long, the department stores, some may call you break as you are hoping for good news after a bummer of a holiday season, knack, since the beginning of the year kohl's has said j.c. penny lost a third of
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its value or $870 million. to be fair, it's not all bad, in order stroms are up about 2.5% year-to-date. forecast broke the metric with evaluating the health of retail companies. you have to watch out for gross margins. macy's and j.c. penny and sears are closing their stores, shrinking their fleet in order to capture possibilities. see if it works. >> thank you, courtney reagan. with all eyes on retail, could next week's earnings be a make or break space? what are you looking for? >> it will be clearly expectations are lows, very low. for me, coor's has been a very difficult one this year. they are a year maybe behind coach. >> that is a great example for them to fall as they could.
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turn around north american same store sales, that would be huge. they don't report for another two weeks. macy's, i gave up on it. it means it's probably great to own right here. but i feel like they haven't solved the problem yet. >> right. >> and i don't think for them, they're talking about real estate, monetizing real estate, i don't think that will happen in the very short term. i don't expect anything in terms of management change. i think that will be fun, a good executive there. maybe nordstrom's the best of the bunch. >> it could be set up for a trade here a. little bit of good news is huge. >> you see, karen has a longer time horizon. karen is a diligent investor out looking four or five days out, three days out, two days out. i think you could buy macy's or kohl's. april was a little bit better. that brick and mortar trade could be done, it could be over.
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for a trade, these are all over and sold. >> i don't know, nordstrom's is going from $40 in the middle of march, it's now $49, it's fought ridiculously expensive, it's not cheap either. they seem to have gotten tear inventories under control the margins were better, can they do it two quarters in a row? i think it will rally in earnings, i think their report is short, nordstrom's, again, that has been the right trade. >> still ahead, should you be following suit? we'll tell you how hot the oracle man is right after the break. i'm melissa lee. >> first in business world wide, in the meantime, here's what else is coming up on "fast." >> commodities are getting crushed. one of them is flashing a secret buy sign. we'll explain. plus, stocks around the world are surging, but that could all change this sunday and here's why. if you are worried about a surprise outcome in the french elect, we'll tell you how you can buy disaster insurance on
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your portfolio when "fast money" returns.
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>> well, i wouldn't say the specific earnings disappointed me, but i would say i don't value ibm the same way that i
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did sick years ago when i started buying it, overall, i think in sex years that i erevalued it somewhat outward, within it got over 180ing we actually shold a reasonable amount of sock is there that, of course, warren buffet explaining why he cut a third shares of ibm him should you be selling alongside oracle of home haugh? for more on this, let's get to domenic chu in the newsroom with more. >> reporter: well, melissa, if i weren't wearing makeup, you'd probably see me blushing right about now, i'm not in the same ballpark as the oracle world. there is a reason why he has a on the of investment disciples. should you follow his trading pattern? recent history, somewhat mixed. we looked at the three more high profile stocks he paired in as of debris 31st last year. they were in the latest regulatory filings february
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14th. in those filings, we saw that berkshire sold a large part of its stake in wal-mart. had you decided to sell, when you learned of the deduction, you missed out on an 11% rally. berkshire got out of the entire gear, since then, shares roads 2 to 3%. then there is fundraiser, where almost the entire stake dissolved arc decent call here t. stock has fallen three to 4% sense we learned of those sales. there are lots of different ways to profit. warren buffet made a career out of methodology. it's not the only way to make money out there. back over to you guys. >> thank you so much, dom chu in the newsroom. do you sell when warren buffet sells and what do you think of ibm? >> no, i think it's dangerous to sell when ier anybody sells. warren buffet is such an amazing long-term investor. when you think, they haven't
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been great. that's not his point. that's not his angle. when i think about it and i look at the berkshire portfolio and those that have moved and haven't, i think the addition of the airlines seem to be those of the first quarter, delta, southwest, american, are all places where they are heavily invested and i think these are places where the valuation and the business cycle and economic cycle for me. >> one of the most remarkable business people of our era. >> he's right, he is. >> he doesn't own any stock as far as we know. >> that would be out of the bailiwick of berkshire atmosphere jay whathaway. >> i know you don't like ibm. >> what's the animal with the quills? >> pork mocupine. >> stay away from it.
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his price got cheaper because his stock has only gone down the last six years. >> amazon, i have been a fan forever. now i'm saying maybe you get a shot at ali baba, you can't hold your nose and buy it. you have a shot at doing the back to the future trade. >> do not miss. beblgy quick's beg interview and bill gates, that all kicks off monday morning at 6:00 a.m.. from oracle of omaha to the thoroughbreds of churchill down, tomorrow the running of the kentucky derby. they are picking long shot stocks. tim. >> viacom is a long term stock, the valuation is about 34% cheaper. before settling. bob backish reinvigorateing bran, go for it. >> basically, it's fought that much of a lodge shot.
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very interesting. >> twitter, still a long shot. even saying that it's up $4, it's still a long shot, twitter. >> happy birthday, tim seymour. tomorrow. don't screw up any more than you. >> thanks for watching, "options action" right after the break. i joined the army in july of '98.
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>> here at the max market, coming to you live from the tomorrow time's square the guys are drying off behind me, here's what's coming up on the show. >> get in there -- >> that's what sober investors are doing, but there is something in the charts that suggest the bottom is in. we'll explain. plus, french elections are this week and odds makers give them a 16% chance of winning. >> so you are telling pe there is a chance? >> not really. don't

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