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tv   Fast Money  CNBC  October 5, 2017 5:00pm-6:00pm EDT

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lower at last check, currently back up by 1 hers. yum china's gains have been pared. >> also the pattern, costco is interesting. will it be able to hold on to this premium multiple it's had forever, 28 times earnings >> i only moved on to quell my embarrassment. "fast money" with melissa lee starts right now roger mcnamee says the fake news problems are just starting. plus kelly just mentioned, check out shares of costco, volatile after hours that conference call getting under way now. we'll bring the details. first, the dow to fresh record highs, a seven-day winning streak, closing at the record high for the sixth day in a row, the longest streak in 20 years. nasdaq and russell joining in. as congress took its first step to make the trump
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administration's tax cut dreams a reality. let's get straight to ylan mui in d.c. with the latest. >> reporter: melissa, two big hurdles for tax reform are now out of the way the house passed its budget for 2018 just about an hour ago the senate passed its version out of committee. this is important, because once they reach a final agreement on the budget, republicans will unlock the special rules that allow them to get tax reform done without any help from democrats. house speaker paul ryan trying to keep that momentum going this afternoon with a visit to a maryland factory he said tax reform is critical to helping american businesses build more, grow more, and do more >> get the rates down so we're on par with the rest of the world. and encourage businesses to invest in their businesses in america. >> reporter: ryan was referring there to the move toward full expensing in a tax framework agreed to by the white house and republican leadership.
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that measure is highly controversial and very expensive. that's just one of the many details of this tax plan that still need to be hashed out among lawmakers. we're not expecting to see an actual task bill until after this budget is wrapped up. today was the first step in getting that process started but right now it's looking like we won't get a vote on the final version until early november melissa, that means the timeline for getting tax reform this year as ryan has promised is getting really tight back to you. >> thank you, e lylan mui in d.. do you keep buying stocks on these tax hopes? russ, you were skeptical that anything would get done. >> so i have been in the camp of buy stocks regardless. and because i think you're looking at a lower regulatory environment, which is a win to the back of equities
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at this point, this last swoosh up is based on tax reform. you just heard right there, representative ryan is already scaling some stuff back. so to me, there's a lot of stuff that has to go into this they're trying to fit a $5 trillion package into a $1.5 trillion box that doesn't make sense to me. i think they're going to have to scale back a lot will be temporary. they'll have to finagle a lot of these different tax brackets they'll add that ultrahigh net income earner. i think there's a lot of stuff that has to go into making the soup >> the swoosh that you're talking about, was that swoosh the swoosh, there's no way this is not a tax swoosh. i mean, if you look at what's rallying, it's been a value rally, it's been an industrial rally. we sat on this show for many weeks and said, taxes aren't really priced in taxes are getting priced in in a hurry. i think it's a case where there still should be reason for
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caution. there are sectors like the financials that i think have the backdrop to rally, whether they get something done or not. i don't think tax reform per se, in the broader sense of the fantastic, is fantastic for banks. what's been driving financials, reregulati reregulation, lack of regulation that's what's driving financials that's what will stay. >> i would disagree with both of you if you think that the possibility of the tax is already built in i think the reality is -- >> not already built in. but to say the last week, we've swooshed higher -- >> there's no doubt about it >> i'm going to tell you again, it's not taxes i'm going to tell you -- >> that's not your point i think if i can speak for you for a second >> it's not totally priced in. your point is it's not totally priced in. that's your point. >> there may be a smidge at the most priced in
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>> as opposed to a swoosh? >> i look at this right now and i think the idea is, we've seen rotation, rotation, rotation rotation now going back to the banks. the banks were in pause mode melissa, you came after me a couple of times, hey pete, those banks aren't doing a whole hell of a lot >> right until rates started going higher >> and lower regulation. but if you go to the facts and fundamentals, i was going to do a pitch tonight, it was going to be citigroup you know why it has nothing to do with taxes. it has everything to do with the company itself i could do jpmorgan, i could do bank of america, citi, morgan stanley. all of those have upside whether we get tax reform or not. >> nice tease for the pitch later on in the show >> the most interesting -- a lot of interesting things today. the russell has been unbelievable defense stocks we've talked about forever. industrials, honeywell, another new high the one thing that stuck out to
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me today, amazon is going after fedex and ups, we all read the headline that's sort of what they're saying fedex opened lower on the day. fedex actually closed up on the day. if you think about the strength of it market, even on a day where federal express had every reason to go lower, as did ups, they close higher. what does that tell you? the rally is very powerful one of the things we earmarked last night, we said, look, google, alphabet, they're bouncing around this level for quite some time, looks like it wasn't to rally in earnings. probably the biggest one-day rally in google in the last couple of months whether it's on the back of tax reform, regulation cut, or not >> so is the market reflecting a 2% economy right now is the market, for whatever reason, whether because of tax cuts or just fundamental strength of the economy, is it the market trading as if the economy is much stronger than what it is >> the market trading as if --
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let's not kid ourselves, what do you want to own here that's what it comes back. 2%, as we said this morning, by a fed governor, nothing to get terribly excited about you could read that as a dovish fed statement if you want, which means the fed is going to lay back until they see things really accelerate, even though we know they're waiting on pce and inflation measures that they selectively seem like they could pick and choose, i don't know. >> you laid out a lot of the potential land mines still ahead when it comes to budget and then of course tax reform at what point are you going to stop saying buy stocks at what point does your assessment of what's going on in washington affect your buying? >> the way we conduct the show is why, why we thought or where we are in the tax plan and where we are in the equity plan. i think that without question, lower regulatory environment is the tailwind that is pushing stocks higher. that's the overarching so corporations can plan going forward. this is a cherry on the top of it but you're catching a lot of
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guys on their heels here no one thought we were going to get tax plan done. i still don't think it's going to get done. i don't think it's going to get done the way we think it's going to get done. they're going to slap something out there. it will be pro business. you have in d.c. pro business, pro corporation, and we did not have that in the last eight years, we just didn't. >> there's just a catch-up here? people are afraid they're going to be left behind because they're not positioned for tax cuts >> you're speaking of worry. whether you're reading the aaii or cnn's factors, they're all at all-time highs this is not a worry anymore. it's an overly confident market. that alone is a reason to be cautious >> sure. >> especially when you don't believe they're going to get anything done, and it's rallied on that over the last couple of days >> even without tax reform, the markets are at record highs. our own steve liesman may have cracked the code on where the market is rallying
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he joins us from texas steve, this is fascinating >> reporter: more fascinating was that brilliant macro discussion you stock guys were having over there, i could listen to that one for a while we went down and dug deep into the optimism numbers first, the incredible finding of our survey, you take the four quarter average of every single major economic metric that we ask of the american public, it is a record high for the ten years we've been doing the survey is the economy excellent is this a good time to invest? they all have gold stars because they're all at four quarter highs. why? it comes down to a political thing. it's as easy as one, two, three. three charts chart number one is look at how the republicans are more optimistic about the economy under president trump than the democrats were under president obama. now shift to chart number two. and that's going to show you
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that the republicans were more pessimistic under obama than the democrats are under president trump. chart number three shows the net shift in independents who are positive that's how we got there. here is the problem. the problem for democrats was obama was simply not strong, even among his own people, when it came to the economy president trump is strong. one of the challenges for president trump, he doesn't necessarily have as much approval even from his own party overall than president obama did. so when it comes to legislating, and it comes to grasso's skepticism, it's well placed in that regard because he needs to have more support even from republicans. when it comes to understanding economic optimism, it's that the gop, among the other parties, is more optimistic now under trump than democrats were under obama. and there you go, one, two, three. >> you have had a busy day today, you also spoke with philadelphia fed president patrick harper he had some very interesting
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things to say about the economy. let's take a listen to that. >> your sense of the underlying growth rate of the economy, where do you expect to end up this year? >> slightly above 2. >> still a 2% economy? >> until we see some other changes on the fiscal side of the house, we're not going to move that growth rate too much >> so we have that very discussion here on the desk just prior to coming to you, steve. is the market trading like gdp is only 2%, we're at record highs. what do you think? >> first of all, above 2% is above trend. let's not forget the cbo and the federal reserve both pegged trend growth at about 1.8. now, everybody is so enamored with whole numbers i try to tell people, a half a whole number for the u.s. economy is a big deal. if you get .5, .6 extra, that's a good number. we did 3.1 in the second quarter. we were gonna do 3 we may still do 2.5, 2.6
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that's .7. don't focus on this 3% growth number if you get 2.7, that's a good number that's the size of the pie now we want to talk about the slice of the pay that's the other thing that determines earnings, which is the corporate profit margin. that has been running high and you look at these wage numbers. that's the thing you want to follow for understanding corporate profitable there is some wage pressure out there. it is not overwhelming wages have ticked up, .1, .2 the corporate profit margin, very simply, corporate profits are running very high. the pie is a little bit bigger than we thought. and the slice of the pie for companies is doing pretty well does that mean that valuations are right? that's what you guys figure out. >> the flavor of the pie will quickly change if the fed comes in here. they're waiting on any fiscal policy they've rightly stayed on the sidelines, but the minute we get some policy out of d.c., the fed may say, we now have to move
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pc has been wrong, it's the wrong measure for inflation. we may have a lot more inflation than the fed is willing to tell us that they know. >> so let's be clear if we're going to extend this ridiculous pie metaphor even further. >> please. >> it's going to bake the pie very slowly. i think that's clear when i talked to harper this morning, they're going to do another quarter in december, doing three next year. there's two sides of this ledger if we get growth from taxes, yeah, we'll get more from the fed. i don't think that relative ratio is really going to change very much. the fed right now does not really want to slow down the economy very much. it wants to remove what it considers to be excess accommodation. and if the fed is right about that, the economy should be able to hold up on its own. does the markethave to exist a these lofty levels i personally think the market and economy would be better, if wages were stronger, you might not have the inequality in the
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economy. those are good things for the economy. overall i don't see the fed being a major drag on the economy. don't forget the other really important aspect, the fed is bringing down its estimate for the long run rate. it used to be up near three. now it's 2 3/4 people say, when the fed ends the terminal rate, maybe closer now to 2 >> steve, thank you. steve liesman. >> pleasure. >> talking dessert even before dinner >> there can be savory pies as well, talking about the flavor of the pie what did you do today, pete? >> i continue to roll around in the financials i added to my citibank i trimmed a little bit bank of america, added to the xlf. took off all of my lows. it was a busy day. yesterday was amazing. the amount of paper that i saw today coming into the financials, beingupside the citi, november 27 is the xlf there is aggressiveness going on right now. you know we've had 26 days this year in single digits. >> wow >> that tells you a little bit of something about how low
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volatility is. that also means inexpensive options. that's leverage. that's why it's so busy. >> red hat forever, a new all-time high. one trade that might be easy and risk reward wise, i don't usually talk about etfs, but consumer staples held 54 a couple of times. xlp against 54 is pretty interesting. >> you have to look at the weakness in the homebuilders rates are going higher, they'll get spooked out for the wrong reason i'm still long pulte i would get long on these dips >> i bought some citi this morning. >> nice to have you along. >> all good, my man. breaking out the again, a big drawdown means some thrashing around retail stocks do a lot better. coming up, shares of costco down in after hours. that conference call is going on now. plus roger mcnamee says
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facebook's fake news problem is about to get worse, he'll be here to explain why, and the one company that could benefit pete will step up to the plate, one dow stock has more room to run, a lot more room cid.'so plain why he s exte much more "fast money" after this what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. your bbut as you get older,ing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered...
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throughout history, the one meal when we come together, break bread, share our day and connect as a family. [ bloop, clicking ] and connect, as a family. just, uh one second voice guy. [ bloop ] huh? hey? i paused it. bam, family time. so how is everyone? find your awesome with xfinity xfi and change the way you wifi. microsoft surging 2%, hitting an all-time high after it was upgraded to a buy richard davis, the analyst
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behind the call, was on "halftime report" earlier today. >> they could make a big move in the e-gaming space to bolster their franchise in xbox. they have a lot of money to throw around >> gaming stocks have been on fire this year act vision, electronic arts soaring. do you play microsoft on esports, guys? >> it's a good enough reason there are many reasons pete and tim have talked about this for a long time people say microsoft is expensive, 22 times forward earnings it's not that expensive. they have the growth to back it up they've pivoted, what's good for microsoft is bad for everybody else >> the pivot started with satya nadella. it sounds terrible to go on tv and talk about this.
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ibm needs a change at the stop the problems with microsoft started at the top as soon as ballmer was gone and nadella was in charge -- and i don't understand why warren buffett hasn't been more aggressive to that tone. it's just not his style. so it's probably not going to happen >> i agree with everything you've said. but microsoft had the cloud on some level they certainly had the whole office infrastructure, system, as their move into the cloud, their move into that part of the business model, the enterprise model was already there. >> it was in process when satya joined >> the focus is now on gaming. the focus is on vr the focus is on artificial intelligence >> the buy on esports, was that the original question? i don't think you buy it on
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esports. amazon has amazon twitch already. they already own that space. and to your point with cloud space, that they were taking some of amazon's share and growing quicker at this point, that's a better point. >> oh, you like microsoft, is the bottom line? >> i like microsoft but not because of esports electric arts, take two. that's the direct way to play. >> so you like microsoft for cloud. >> i like microsoft for cloud space. they got kicked out of the music space, they discontinued that already. >> they've made mistakes in all those -- >> exactly they're not going to be able to compete. >> i don't just like microsoft, i love microsoft i don't think 22 times is expensive at all as a matter of fact i think that's reasonable. when you look at the cash they generate and the idea that they could make a transformative swigs ju acquisition per year >> there's nothing slow and steady about up 22% to date. >> it's also offshore tax play, who has a lot of cash offshore,
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they've added it like no one else >> we had mr. goober come back >> he's excited. >> you guys are going to play pacman >> a golden state game maybe or something. still ahead, u.s. stocks are at record highs, but worldwide, hog-wild we'll have a technician to explain what the charts are saying, and the answer might surprise you i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. meantime, here's what's coming up on "fast. there's something that suggest that there are more biotech stock games to come. we'll tell you what it is and how to profit. plus pete is bringing the heat, one dow stock just made an all-time high today and you n'beeve how much higher he sees it going. the name when "fast money" returns.
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welcome back to "fast money. facebook is feeling the heat over russian-based ads julia boorstin has more. >> reporter: republican senator john cornyn saying he's open to making public the 3,000 ads facebook has turned over to the senate and intelligence judiciary committees on monday he said, i assume they were already published so they're not secret to my knowledge this follows democratic senator mark warner and republican senator richard burr, the chairman of the senate intelligence committee, holding a press conference yesterday burr said the committee would not make the ads public but
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called on facebook to release them facebook is sticking with its stance outlined by its general counsel on september 21st, saying, quote, we believe the public deserves a full accounting of what happened in the 2016 election but says congress is best placed to use the information we and others provide to inform the public and comprehensively and completely now, facebook's defense of its position and push to improve its own policies are front and center sales force ceo mark benioff even tweeted out a photo of a facebook ads, saying maybe facebook should run this as a facebook targeted ad on facebook the debate will likely grow on november 1st, when twitter and google have been scheduled to testify. >> julia, thank you.
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julia boorstin in los angeles. roger mcnamee says there are even bigger problems awaiting facebook roger, great to see you again. >> melissa, always a pleasure to be on "fast money." >> you got fast company on fast money here, roger. in terms of the bigger problems facing facebook, what could they be this seems pretty bad. >> the problem here, melissa, we don't yet know the dimensions of the result infiltration of the facebook platform. what we already know is that it was huge, it was very deep it involved not just facebook but also twitter, reddit, fortune, a bunch of other things in a highly coordinated program that began well before the election campaign began. so they were doing things like supporting secessionist movements in texas and california they were trying to cause
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essentially anger to increase on both sides of black lives matter they were organizing things against immigrants they were doing things designed to stoke resentment inside the united states well before the election and facebook was an amazingly effective platform, because facebook is always taking the position that they are not responsible for what happens on the platform before the election, when i got concerned about this and went to them, the point i made is, at that time they had 1.8 billion members. i said, look, at 1.8 million active users, you don't get a mulligan, you don't get to mess with democracy and not be accountable. and i think they're position, which is that they don't need to do anything, is a little bit like the nra, which is, it could work, but if it breaks, it's going to kill the trust in the platform and that's what really worries me >> so trust in the platform. is there also the other concern that even though facebook is now trying to hire all these actual humans to sort of monitor and
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filter out ads, that perhaps -- >> that doesn't help >> -- something will be legislated, and facebook will face challenges to its business model because of new regulations on it? >> yeah, melissa, i'm less -- the reality is i think regulation will be appropriate but i think politically the country is just not in a position to do that today. to me, the real issue that we're dealing with here is that facebook has to prevent this stuff from happening it's not good enough to put people in after the fact and sit there and go, well, we're going to punish people who act badly they actually need to do some things think about it, if you're a pharmaceuticals company, you're not allowed to introduce a new drug without going through an fda trial. the impact that facebook has on society is such that there needs to be some guardrails that protect consumers from being manipulated. you know, one of the things i would really advocate as a consequence of all this is that facebook be required to contact
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personally every single person who is either exposed to an ad that the russians did or were in a group that they had created or infiltrated, and explain to those people, hang on, you were duped. right? you have to recognize that -- people right now are resistant to believing that it affected them they're willing to believe it affected somebody else but not them i think there's a huge issue >> the markets like to think of things in sort of binary ways, there are winners, there are losers if facebook with a loser, are there any winners? >> apple stands apart in the tech universe of having a completely different philosophy. the issue isn't search the issue is advertising based models, in a world where you're competing for people's attention and you need to have increasingly spectacular, increasingly outrageous things to keep people's attention apple, because it sells products, the people who buy apple's products are customers they are not the product
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themselves and so apple has done a lot of things, introducing things that -- for example the new operating system prevents auto play of video. they support ad blocking and tracker blocking products that are extensions to the safari browser. those things are really meaningful and i think apple is a part of a solution here. and i think candidly, over time, it will benefit its business people look at facebook and say, i don't mind them having all my personal data, back when they thought it was just little old facebook and being used inside facebook what the russian thing is exposing is that any bad actor can get access to the private information of every single person in facebook and use it against them and that should be very scary. that's at least as scary as what happened at equifax, which should terrify everybody
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the technology is just -- it's not being controlled properly. and we need to have much hire standards. >> facebook's metrics got called into question. they said they were reaching 100 million people in the age bracket in the u.s., 35 and younger, except the census says there are only 76 million people i mention that because we killed twitter for the bots and stuff when does this catch on for facebook on top of everything you just said? >> it's a great question the bot problem on twitter is so huge that all the numbers are essentially rendered meaningless. on facebook we don't yet know the dimensions there's a really big difference between a bot on facebook and a bot on twitter on twitter, everybody knows they're mostly bots out there and they aren't communicating with other people directly, so there's no impersonation the problem on facebook is that the russians and others use bots to impersonate human beings. people are having interactions
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with bots, thinking they're interacting with a human we don't yet have the dimensions of that. and candidly, that's one of the things we have encouraged both the senate and house intelligence committees to insist on, getting the data on bot activity and understanding how many of these groups that the russians either created or infiltrated are dominated by bots,and what is the impact. for every dollar you spend on advertising, you can have a fleet of bots that magnified the impact of that really dramatically because of the way facebook is organized with these groups of like-minded people that facebook collects to make advertising easy but which also make inevitable the abuse by bad actors >> roger, great to have you with us >> always nice to be with you. >> i've been concerned about it, oddly enough, you look at the stock, the stock is taking a little bump here then come right back, a little bump under 170, comes right back
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i would have expected there would have been much more than this, melissa. the market seems to be slugging th shrugging it off we just haven't seen it in facebook >> it's up 48% year to date. you can agree with everything roger said, i think we all can agree on that, but the bottom line is, are ad dollars going to think away ultimately from facebook i don't see them going away from facebook >> in fact it's exactly the opposite facebook is best in class in ad. it's creative, it's the attribution. even if you put a discount rate on for all the other shenanigans at 30 times it's a $210 stock. so yeah, right now they're getting stronger but the things roger was talking about, in fast company, by the way. >> amongst fast company on "fast
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money. still ahead, stocks around the world are surging. if you have to put fresh money to work right now, should you stick with the u.s.? or go somewhere else plus pete is eyeing one stock for huge gains by the end of the year. what has him so extecid? we'll find out when he delivers his fast pitch, after this
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our collaboration with pg&e is centered around public safety. without pg&e's assistance, without their training we could not do our mission to keep our community safe. anytime we are responding to a structure fire, one of the first calls you make is for pg&e for gas and electric safety. it's my job to make sure that they have the training that they need to make the scene safe for themselves and for the public. it's hands-on training actually turning valves, turning systems off, looking at different wire systems all that training is crucial to keeping our community safe and our firefighters safe. together, we're building a better california. welcome back to "fast money. check out emerging markets etf,
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surging nearly 1%. this has markets around the world are soaring while the u.s. market is up 14% this year, brazil is jumping 28%, india up 19%, south korea 18%, mexico up 11%. you get the point. is it time to bet across the pond as emerging markets go wild ambassador >> first of all, you saw that china is up the most when china is working, you want to stay in em. the other part about this is, look at emerging market index. if you follow me on twitter or emerging money, eem versus spy that spells you how much room this trade still has to go em underperformed spy by 60%, has rallied back there are key levels along the way. follow those they're very technical in this ratio and it's worth taking a look at. yes, the dollar is a concern but remember, the move in the dollar of late is a dollar-euro
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cross. em currencies have been holding in there >> i also think we would be remiss in not mentioning that china cutting the triple r, reserve requirement ratio. if you look at the -- [ coughing ] -- the fxi ran 65% piggyback that with cutting the triple r >> doesn't take place until next year if you look at the fxi -- [ coughing ] >> excuse me, i'm a little under the weather. >> you're playing hurt >> i apologize i know it's awful to hear on air. >> now you brought it up, everybody knows. >> you hear coughing in the background, you have to wonder what's going on. hey, robert. >> hey, melissa. tim has hit a number of key points the dollar is a starting point when we're talking about international markets. it's come down a long way here
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over 2017, obviously reflecting lower inflation expectations, declining bond yields in the u.s., overall growth being somewhat sluggish. now it's come down to a very key technical level. i think it is trying to bottom right around here. i think the dollar can start to come back. that raises a question of where you want to go do you want to put your money in international markets, do you want to look at some other option in the u.s. when we look at the russell 2000, it had the same issue as the the cdollar, all the way th 2017 sideways, only recently breaking out that's important statement, it tells us something is changing in the macro standpoint. the russell 2000 is starting to break out, something is beginning to change. now, when we look at the russell 2000 relative to the s&p 500, there is a fairly important low in 2016, where everything collapsed. markets snapped back you had this big sawtooth
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pattern in the russell 2000. it's now starting to turn. and the question is, i think what's starting to happen here, is this much broader deflation into reflation is starting to take hold. as we take a look at the emerging markets, while they've had a tremendous run here, they are starting to move back into quite a bit of technical resistance it doesn't mean they have to stop there but is is that where you want to put your first incremental dollar if you have other options? as tim pointed out, the decline in emerging markets relative to the russell 2000 or the s&p 500 has been six or seven years in duration we had a nice bounce in 2017 it really hasn't gone to this technical level. that's the level that tim was referring to at this point, with the russell 2000 starting to break out, i'm more inclined to put incremental money into the u.s., into u.s. small caps where we have banks, financials, reflation trades,
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all sitting, and i would be cautious about putting new capital into the emerging markets which have run a long way. >> robert, great to see you, thank you. so who agrees with robert? >> i thought you were going to do a would you rather, but go ahead, continue. >> that's basically would you rather >> first of all, emerging markets, everything goes higher, we'll start there. the iwm, the catch-up trade, up basically 7% against a backdrop of the s&p being up 3.8, let's call it 4% i think you have to believe in this rotation. you have to believe in tax reform getting done or at least gaining some more traction to believe that the idm catch-up and outperformance trade continues from here. >> small caps are even more expensive from the nasdaq, they always trade expensive this is the concern. this is why global markets look a lot better emerging markets traded two standard deviation, cheap, attractive valuation to the s&p. two steep standard deviation event, not easy for me to say,
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is absolutely why you want to own them in addition to techs. the biotech boom has been hot this year. it could go even higher. we'll have a special report. pete is bringing the heat again. getting ready to pick a surging stock he's calling a home run for inveor wn ce cksts,heweom
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time for the fast pitch. pete is at the plaza with the housing play he says is a total home run >> one of my favorite stocks, home depot if you go back and take a look, mel, when that stock gave their earnings report, the stock went down it made no sense at all. i thought that was an opportunity. we always look for opportunities. here's why i like this company if you look at the outstanding management teams that are out there across every sector, i think this one starts from the founder, but each and every one of their ceos has been absolutely outstanding this guy is just as good as everybody before him hats off to them for creating such an incredible business. the incredible growth is what i do like. the earnings last quarter, year over year, strong growth revenue, strong growth everything they were trying to accomplish, they did same store sales were up
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now they're talking about 13% for the full year. they've really got all the growth, that checks every single box. you look at what's coming up next strong housing market. we all know about that, we've been watching that, and grasso has been all over the homebuilders take a look also, you've got irma, you've got all of these different tragedies that have gone on, that's going to feed into the bottom line as well that's going to be a strength. when i look at this company, and i look back, one of the things i always like to look at is, are they a share-friendly company? yes, they are. they have bought back, this is not engineering, this is just truly being friendly to the customers, and to their shareholders, 35% of their outstanding stock has been bought back in the last ten years. that's massive they've been aggressive. and take a look at that chart. it gives you a little idea is the stock at highs? yes. do they have growth? yes. this is a stock i think that goes higher from here. >> i happen to agree but i'll ask a question because that's what we do, you're in the batter's box, you have to swing. i think back in june or july
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there was some concern in the market that maybe home depot could be amazon'd. >> here's why i'm not concerned about that they took on that challenge and they're winning. as a matter of fact their growth in online, guy, 23%. they went for e-commerce they've done a great job with the mobile, which makes it much more efficient inside. you buy mobily, you can go there, pick it up and go there's all kinds of different ways they've been going after the customer to keep the customer they're beating amazon at their own game like best buy is. >> i bought three things online at homedepot >> what did you buy? >> fireplace tools and a lighting fixture why should i go and i can buy online >> i'm going to call foul ball earlier in the show i talked peak on pollen on my trades. i fast pitched home depot in the
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past >> and you still like it >> i'm a buyer he's listed to the pitching coach often. >> let's not get in front of ourselves, buddy boy >> pete nailed it as usual, i'm a buyer, firing on all cylinders. the housing market is running tight, home depot is still a leader >> lane is watching the show in his office >> shovel season >> what does that mean >> you're a buyer. >> giddy-up. >> mulch >> it's toni braxton time. you want to know what you guys out there, whether you are buying pete's pitch for home depot. vote on our twitter poll right now. we'll reveal the results later in the show. plus wve ge'ot the details on biotech, more "fast money" after this
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welcome back to "fast money. the biotech space is so hot it has us in desperate need of some stock therapy. meg terrell joins us >> hi, guys. the biotech window is pretty wide open right now in terms of
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third quarter results just reported by renaissance capital on health care ipos, they accounted for almost half of ipos in the quarter, helping drive outsize returns there. for health care there were 14 ipos in that quarter with an average return of 57%. in terms of the pace of biotech ipos, people i'm speaking with say they are picking up but it's not getting to an overexuberant level like we saw back in 2015, 2014 of course that was the top of the biotech market, the middle of 2015. we have a chart showing the number of ipos tracked against the ibb performance. you can see in the second quarter of 2015, that was a peak in the number of ipos. then the market peaked after that that was when the drug pricing rhetoric heated up in terms of policy topics and ipos slowed down a little bit after that now they're starting to pick back up again. we had three ipos in the last two weeks that have outperformed since they were priced nucana, deciphera, and rhythm.
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in terms of what's to come here, a lot of what's contributing to those gains is the fact that some sort of more generalist funds, big funds are getting into ipos as crossover investors. you're seeing that sort of return to allocation to health care in terms of those bigger funds, which is good for the overall market, of course. and private funding for biotech companies reached a record in the third quarter, according to bruce booth from atlas ventures, $3.6 billion he says that's setting up 2018 for a gang buster year for ipos. >> are there specific areas of biotech companies going public >> cancer companies, rare disease companies, with both m&as and ipos, those are good. >> thanks, meg terrell pete, where are you? >> i got out of my gilead position, i liked that company a lot, it's been stalled but i see upside buying there.
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biotechs are a great spot to be, oncology will be the big growth area fob for sure. >> sell clean wcelgene moved do the downside ibb closed higher. i think the selloff in celgene is overdone. >> celgene down more than 4% today. let's get to mike khouw in dallas, texas. >> reporter: after the morgan stanley downgrade you would expect to see bearish activity after seeing three times as much call volume as normal, on the opening side it was actually next week's 143 strike calls, nearly 1500 of those traded for about a dollar those are bullish bets by the buyers that the stock could recover about four bucks of the 6 1/2 that it gave up today by next friday. >> i am not in biotech currently. ibb is the way i would play it look what we've seen in teva and
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mylan. if you want to cancel out all that noise with individual stock plays, ibb is the way to play. >> mike, thank you, see you tomorrow, "options action," full show tomorrow 5:30 p.m. eastern time next, are you buying pete's pitch for home depot the results when we come well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
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welcome back to "fast money. cue the drum roll, results are in you know what? nobody puts baby in the corner because it's time for some dirty dancing. america is buying pete's pick for home depot by a two to one margin, a huge victory >> shake it, pete. >> another day at the office, guys >> back for the final trade. >> xlf, financial etf. keep an eye on this thing, they're buying 100 plus thousand giddy-up, financials >> eem, a big pullback in turkey this is a place to get in. >> vista outdoor, long a couple of weeks it goes much higher than here. >> people at home are tired of hearing toni braxton over and over again >> that's too bad. >> mel, you got the pats/bucs tonight. >> i don't know what to watch. >> what are you going to watch >> i'll be going back and forth.
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>> you know what you should watch? that xom, that sucker sort of -- >> she'll be watching that >> i'm medical he is is a lee. see you back here tomorrow at 5:00 for more "fast. "mad money" with jim cramer begins now my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm trying to make you money. my job isn't just to entertain but to educate and teach you call me at 1-800-743-cnbc or tweet me @jimcramer. how in the world did this market get so darn high yet another day where we hit new


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