tv Fast Money CNBC June 2, 2017 5:00pm-5:31pm EDT
peej g people go, amazon is overvalued, everybody knew that. >> hindsight is 20-20. >> thank you guys for being here, as always, thank you guys for writing in. >> that does it for us on "closing bell" this week. "fast money" begins right now. >> "fast money" starts right now live from the nasdaq markets. at the site overlooking new york's times square the traders on the desk are tim seymour, steve grasso, dan nathan and guy adami, it's been a week with crude sinking, the energy trade gets crushed. it's sending one group of stocks soaring. plus, apple surging next week. we got a way to protect your profits for next to nothing. later, one of the active strategists on the street, tom lee is coming out of the elevator as we speak? in fact, late, he's almost here to the set. he says the bank stocks could
rally another 40% from here. what's he looking at? we will start with him. first, we start with the classic trump trades, check this out. the stunning movers the small caps, groups, which soared after the election and tapered off afterwards, small caps surged 4% in only three days. the transports are up 3% alone, all this as stocks hit record highs. so is this a sign the classic so-called trump trades are back? and is this confirmation that the rally is, in fact, guy in good shape? >> rallies intact, let me start last night, i don't know what the trump trade s. i think the mark would be here, it doesn't matter. where do you want to be? >> they, i don't know, the russell the ibwm is on fire. we talked about 130 held long, the transports the most interesting one, tim mentioned it last night, fedex. you look at federal express, all time high, say the stock is expensive. if eps grows close to 15%,
trades at 15 times forward earnings. i still think fedex despite the move it's had has move to the upside, which means the transports have room. >> you are a little myopic here. >> i am always myopic. >> what are the other trump trades right out of the gate, it was crude. >> inflation rate. >> look what's happened? >> industrials. >> you want to look at to say what are we projecting as far as growth going forward. we see the dollar, dixie trading at levels not seen since november elect. we see the same thing as far as the ten-year treasury yield the crude, those are tailwinds directly. if you are looking out six months, you try i to say, what are the different markets about growth? i think those are bigger than the u.s. equities market. >> there has been a structural breakout at markets around the world, japan is at an all time high. we are back to actually breakthroughs, to probably soon
challenge five-year low, excuse me, five-year highs. much has been made. i know i talked about it about tech crowding out other parts of the market. that's just not true anymore. the industrials, scott, you mentioned. that the best chart of all the sectors in the trump trade, by the way, this is not a trump trade, these things were working before the election. they were goosed up by the election. they pulled back a bit. ultimately, bring the snicker. ultimately, the industrials benefit mostly from the weaker dollar. that's really the irony here. it was supposed to be a dollar thing, it's very weak. >> that is great for global industrials. >> i think the trump trade is equities. i do say, yes, there were other fings things factored into it. the most impress ev thing what about the iwm. >> it was up 1% year-to-date. it's closed that gap from the under performance from the s&p almost in half. that's a big deal. i think you break above 2400 in
the s&p. i think that's a vacuum trade. i think you run into a big resistance 2450, 2475. ultimately i think you are on track to stay long equities. i think that's important. >> we're not getting ahead of ourselves on this small cap and transports being back. two days is not a trend. >> let's be honest, these have been range-bounds trades since that initial rally in november and december. you look at your iwm. they have been range bounds, i wms in particular, russ em, bounced off that 200 day moving average two weeks ago. it's been a straight shot up. >> it's interesting, today, yesterdays, you saw a lot of emerging trends, the xrts start to come back in place, retail sectors are coming back. iwm was bought. i thought today it was going to be a one-hit wonder. the fact that you see a little follow-through today makes me a little more positive, bullish, you will see people buying the iwm. that's probably a big switch. >> anybody surprised that the market was up today in the face
of a payroll number that was below expectations? and yields going lower? >> it depends on how you look at it. we had a decent ism, the workweek hours and the wages were okay. even though this was, this number looked particularly bad relative to the adp the day before, which i was doing cartwheels over. i don't know how you can say, though, suddenly, we have to break out on trades that are trapped. especially, look aed the yield curve. >> it is two days. wooer talking two days. >> don't you think big macro investors would want to worry about the -- what's the market cap? it dwarfed in comparison to what's going on world trade center dollars and the treasury. >> why should small caps need to outperform now when this is, in fact, a macro-trade. you will have possibly less central bank involvement. if anything the last couple days, aggressively. >> i do think they have to out perform only because guys are
chasing, a lot of guys are behind the 8-ball, based on fact if you are long, short, you didn't make enough money. you are in dangerously going at a business. you have to make up -- >> how do you allocate a lot of money to small caps? >> the relative under performance of the russell 2,000 is a problem. it's actually speaking to what the treasuries a tornadoes dollars are telling you in a way. because that's the first hardest hit sector. so to me, i actually think the crowding into these multi-megacaps in technology to me, i said it a lot. it's a safety trade. >> that's what it is. you talked about honeywell. >> you want to put credence in that, you talked about industrials, ge is down 11%. they brought in two times the market cap. it's got three times the sales. >> are you mad at me? >> then, shouldn't small caps -- >> it's a lot of signs. >> is it catch up, though? you say they're supposed to take off from here, there are fundamental also to support it. >> i'm telling you, the under
performs year-to-date is strictly tied to the macro line. >> what's the difference why they rally? >> right now. >> you think they rally? >> no i think we're trapped in a range of small caps, if anything, they have been a relative small trade, i have been short, relative to other stuff, it's kind of worked out. that's not why i'm saying this i look at industrials. these are big cap companies that benefit from a weaker dollar. they were pushed down for years. with a value component to them. by the way. industrials are very cheap. if anything, we're getting back to a place where people are reassessing. >> maybe that problem for ge. >> i was just going to say, if you look at the other industrial stocks, they're not trading in tandem with ge. >> if those games have won, the market has run, if those names are carrying the overall market, where are you going to get your return from on a relative you have to go to iws. >> the classic trump trades are seeing a revival. there is one group of stocks
that are unstoppable. you know the names, facebook, amazon 33%, an alpha bet of 25. in spite of the big moves, our next guest says the group could rally another 40% from here. tom lee is the man behind our call of the day. tom, good to see you. >> that is exactly what it sounded like. >> yes, it was. >> how is this going to happen? >> well, one, listening to your discussion, i think fang fits well within the discussion, these are secular innovators. i think as people worry about growth, like in 20s 15, they migrate to companies with non-cyclical growth rate. i think fang is set up for a big second-half rally. >> what i don't understand is you are a a lot more cautious than your strategist competitors. you have one of if not the lowest s&p target by the way. but ge -- how is that consistent then if you think that the group
that's been leadsing is going to go another 40%, yet you are one of the most cautious strategists on the street with one of the lowest targets? >> i'll keep my fang at 6% of the market. even if it's up 20%, it adds 20 points to the s&p. it's not like fang. fang could still do fantastically in the second half. it's going to push the s&p to 2600. we liekdz fang from the start of the year. base we have been sort of cautious on growth, so we'd rather buy where visibility would be, which is fang and craft. obviously the fang side worked better than the craft trade. >> but how can you be cautious and think fang is going to continue to run the show? >> well, it's just like 2011 and 2015. in 2015, we had a growth scare and in 2011, we had shot down, downgrade both years fang had big second-half rallies. i think when you start to worry about growth, it's not defensive stocks necessarily that work. it's secular growth. >> you said secular growth.
let's talk about fang. these guys literally have the tail winds of amazon, commerce. digital advertising for facebook, apple has just nailed the whole mobile device thing. but they are cyclical. we have just been in this very long bull market. when you think about online advertising is as cyclical as it gets. we know that from history. retail has a potential to be cyclical even with trends, does that make you nervous? yes, these guys are dominating. it wouldn't take much deceleration to berate them a bit. >> what's interesting, the story the last seven years has been companies disciplined with capital investment. right. not playing the capex. these fang companies on an e-basis have been setting at huge levels, the s&p a 3%. facebook is over 20%. google is 15%. so i think in some ways, compared to where they were seven years ago, they have risen because they haven't been, you know, not spending on increasing
their competitive advantage. so. >> i'm going to tell you. a big nameless money manager just e-mailed me saying that there's no way your view works, if fang is up 40% through the rest of the year, it's going to pull the rest of the market up. they would bet serious money against your view. how do you respond to that? >> again, fang is about 116 points of the s&p right now. so if you say it's up 40, it's not like mechanically it can add to the anne p s&p. >> isn't it going to pull the rest of the market up just by virtue -- >> it's got to make you think about it. ultimately the s&p has largely been intied e sideways. we ticked up points above 2400. really fang has been cruising and the s&p has been largely flat for four, five months. >> fang in many ways got us here. so if it goes up another. >> we are grinding, the market
was sideways for most of the year, fang was up a lot before the election. fang didn't go anywhere the rest of the market went up. >> that's right. remind you, in 2015, fang was up 43% from may 31 to year end and s&p was down 3. so you can have huge divergencys. again, it happened in 2011, where fang was up 35% in the second half. and the market was down. >> are you still cautious, or are you coming around as you see this rally perhaps getting reunited? >> we have been completely on the wrong side, we're cautious. we have been cautious, because you know we are taking our queues from the yield curve and credit spreads. and those have not been really embracing what's been happening with you know the equity markets, but the reason we'd be wrong, i think we will put some time on this, we will re-visit this 230. i think it's being rerated right
now. i think everybody is basically saying, it's safer to own equities and valuations have been creeping up. i don't know. >> all right. good to see you. thanks. >> good to see you. thanks. >> all right, tom lee. coming up, oil sinking more than 4 performance. we're going to tell you the surprising trades. plus, it's a blockbuster summer surprise, can wonder woman, tim seymour's favorite super hero, save the box office? >> nobody. >> we got the details. and later applele is up more than 30% this year. if you want to protect your gains, we got a way to do it for next to nothing. we will explain much more "fast money" right after this break.
>> we are back with "fast money". oil is sinking as low as $46 a barrel. it's down 11 percent this year. crude has been a big boone, down two, joining us now from the new york stock exchange. hey, dom. >> all right. so scotty, when you thoughts that production cuts from opec would be enough to fuel the oil bullish side of things, it starts unraveling within they realize others need pumping to help fill that void. that's what's happening with oil
overall. we had the gains operating in america per baker hughes. it reminds me of the drill, baby, drill days. oil isn't helping the energy sector overall, the worst in s&p is down 14%. not necessarily all bad news. if you are a consumer, which many of us are, the sector is the second best performer of the all sectors this year. it's up 13%, gains aren't really necessarily powered by traditional retail names, many of which are getting hammered in the market. a look at the year-to-date winners shows many are tied to the travel and leisure industry. check this out. 27% campaign in carnival cruises so far today. 30% gain in priceline.com. 35% in windsham hotel, how about a 55% gain in winn resorts. i understand you can argue much of the winn is macaw gaining. you get the picture. i haven't mentioned quick
service restaurants, mid-scale restaurants are doing so far this year. scott, while consumers can find many ways to spends their hard earned money and fuel savings, it looks like many are doing travel and leisure, doing will be big beneficiaries. >> i appreciate it. they have been big beneficiaries. marriott, all time high, carnival, royal caribbean, some of the names you mentioned as well. you like these stocks, to be able to continues those. >> vacation club. they went to a point system t. stock is up 40% year-to-date. there is rumor to be mna, ccl is up. i think you will find a lot of buy activity in that entire space. >> danny. >> you have one word, airbnb. when you think about hilton has a $20 billion mark cap. hilton is a company that will have $9 billion of revenue. this is a long-term head wind for the hospitality sector. airbnb is doing a lot of things
right, to me, investors don't know a whole heck of a lot. >> that is a huge head wind. >> royal care beans, mel did an interview with mr. fame. i want to say a year, a year-and-a-half ago. basically, it's doubled since then. valuation wise i think cheap. energy costs are a huge part of their overall cost structure. energy come down to us to their bottom line. i think rcl continues to rally here. >> ahead arc slow start to the summer box officer. but wonder woman may be able to single handedly reverse that trend. i'm scott walker. you are watching cnbc. first in business world wide. meantime, hearing what es else is coming occupy on" fast." >> that's what's been happening to trader stocks. dividends aren't touching one large name. we'll tell you which one. plus, biotech stocks have been soaring, but if you missed the rule, there is one name that
office? julia boorstin is offering more. hey, julia. >> a lot is at stake, not just for warner brothers but the whole industry and future female super heroes. "wonder woman" has brought in $11 million from theaters. >> that puts it on track to bring in $95 million in u.s. ticket sales this weekend. it's boosting hopes it will help turn around the slumping summer box officer, which is down over 7% from the beginning of may compared to the same period last year. "wonder woman" is a big risk for warner brothers, which spent a reported $150 million to make the film. it's also key for warner brothers d.c. comic franchise ahead of "just nice i tis league" which opens in november. and it helps the super heroes stands up to the marvel films. the stakes are particularly high after big budget "king arthur" bombed last month. "wonder woman" faced a backlash.
see more only screenings in austin and new york have drawn complaints. it's a huge hit, though, we could see other studios focus more on female-driven super hero movies. "marvel kwats stars brie larson, "wonder woman" the on track to break one gender barrier with "rotten tomatos." it is poised to be a record opening the first female director. scott. >> thank you very much. tim, you are first. >> disney is the ultimate name, "beauty and the beast" are not slumping. over a billion dollars. this helps us stay ahead of its peer group. i think you get to a place, that itself the only thing it will do in the second half of the year. i don't think you need to do a lot here. clearly, this whole sector, it doesn't matter, really. the multiples in this sector are under pressure. >> time warner has that
potential deal going through, probably 10% to the upside. disney, you are challenged. it falls another 4%. it has to find the 200 day moving average before it bounces from there. >> because of what, the espn thing still? >> technically. everyone knows espn. usually they own the box officer, i don't see them owning it this summer. >> so usually they have that stock of films coming out. it's "cars 3" next i don't see that appealing to a major demographic. >> that's matel. >> yeah, pixar. >> okay. >> in fact, i was going to point out, i think that's a driver for matel, which we're not talking about in this sector. you have some names that have entertainment that will be a big part. >> i just can't see it. if you have kids, you will go see that movie. i don't see that being a potentially draw for. >> up to date. >> exactly, so how many, so you really, your dem graphic is "wonder woman"?
i'm concerned that. timothys that matel is producing movies. >> i'm a big fan of matel. >> what? >> go ahead. >> netflix, gets you done. i don't know what people do, they're not going to the movies. they're definitely watching netflix. another all time high today goes higher. >> that was a successful savings. from the silver screen, let's get super hero stock picks. that es are names that could very well save your portfolio. tim seymour picks. >> linda carter my hero, paypal. they have receivables in the business they could sell. we know what's going on with payments. these guys are in the right spot. >> ali baba, it's a back future trade. if you missed out on amazon, this is your second craft right here. people don't like valuation, get a second bite at the apple. ali baba. >> nike reports in a couple days. this has been down in the dumps, starbucks, an all time high, similar sort of makeup. >> thanks for a great two days.
enjoy that coming up next. >> that does it for us here on "fast money". catch us back here on monday at 5:00 p.m. eastern. don't move yet, "options action," that's right, starts right after the break. cold ref. it's what busch is known for. what are you known for? oversharing. in fact, i have this thing. nope. nope. [sfx: buschhhhh]
>> hey, we are live at the nasdaq site. while they're doing that, here's what's coming up in the show. >> biotech stocks surged this week. we'll explain. would you like to protect shares of apple for little to no costs? >> how did i live without this. >> i don't know, tim. we'll teach you how and -- ♪ >> hammering energy stocks and now options traders will have a