tv Fast Money CNBC October 25, 2017 5:00pm-6:00pm EDT
preferences? they worked most of the year, but now we're talking about industrials, reflation trades. now we'll see if maybe these numbers can draw people back >> this is a critical week, and tomorrow is the critical day of the critical week because of these important reports. >> absolutely. still watching that bond market. >> rates keep going there. thanks, mike, see you tomorrow "closing bell. it's done. "fast money" begins right now. "fast money" starts right now, live from the market site overlooking times square i'm melissa lee. tonight on "fast," wall street's biggest bull calling for a near term correction. what's got morgan stanley's mike wilson so worried. he'll be here to explain amgen sinking after hours after a rough week one analyst says keep buying the stock, he'll make his case and tom lee and andrew left
are geared to battle it out on bitcoin. one is telling clients to buy the bitcoin investment trust the other says it's a bubble ready to unravel it's a crypto clash you can't afford to miss first, what looks like the beginning of the bond blood beth, the ten-year yield climbing toward 2.5% dow sinking 200 points at the lows of the day before closing off those lows, still having its worst day in more than a month was today a glimpse, a little peek into what a rising rate environment looks like for stocks is this the biggest risk to the rally, pete? >> i would say the velocity of this move is what part of the problem is the die where he gestion of wats thing move as fast as it has if we get to 206, people will start to freak out telephone stocks, at&t, verizon, were all affected. boeing had already had this
monster day yesterday. as long as the velocity slows some, it still comes down to these earnings the earnings have been powering this market. that's what's been pushing us to new highs. if you go back to the earnings, you go back to the fundamentals of what's been going on in the marketplace. it's industrials we've got to see, if the speed of this move continues on the ten-year, then i think that's going to put at least a pause. >> coincident with the session lows, we saw a turnaround also >> we did. ecb is tomorrow, we'll get feedback on that it absolutely was i think earnings and ecb expectations that shifted it a little bit for earnings, you had boeing, very -- i mean, look at the move that stock has had in the last six months look at the sort buy-in into that name. that's name i would defend aggressively chipotle, think about the money that came off the table in chipotle, that was a debacle you had stocks with higher valuations report, and they missed expectations.
>> i think the pain below the main indices was much worse than a couple of these names. chipotle's numbers were terrible, or at least their near term outlook for growth, the queso, and guy called that yesterday. >> totally nailed it >> this is a glimpse, mel, into central banks and normalization, what it might look like. i don't think rates are going to zoom higher. we're at a five-year rate. having said that, i think things are going to move. i think this is extreme positioning. i mean, you've now heard four or five i think people on the show, and let me be the sixth or seventh, the rsis, the relative strength indicators on the industrial average are at levels we haven't seen in 65 years. you get complacent into this bull market. because earnings i think have been great >> you can be complacent when yields remain low in terms of valuations when you see that glimpse into a higher yield world you all of a sudden say, you know what, 18 times, that doesn't really fly >> we talked about that, right
you do think the point is, i want to be very clear because i'm not calling for an i am meant bear market. bear markets begin when rates go to high. i don't know if it's six months or a year or two years from now. but you need to watch rates, they're the single biggest threat >> is it because the markets go too high, too fast >> in the short term, because they go to high, too fast. but at some point we reach that tipping point. >> you don't think a steady, slower move in these rates -- >> even if we have a steady, slow rate, somewhere around 3%, 4%, i don't know what it is, at some point there's a reason to buy bonds at that level and not buy stocks >> if rates are going higher, you have to believe in tax reform you have to believe in the recovery >> let me ask you a question >> we're in the middle of the trump presidency forget the last five years i realize we've had a nice bounce but to say they're off to the
raises has to assume a lot of great stuff. >> yields aren't going to go up to a point where they disrupt the markets this year. if you're invested in the equity market, based on where the ten-year is today, knowing there's potential tax reform around the corner, are you going to take money off the table and put it in the bond market at 2.48%? >> you're asking me that because no that's what i want to be very clear about. no but i guess what i would say, let's flip it around, instead of being the bear side. if we get a stock market selloff, because rates went up too fast in this period, that's a buying opportunity >> how are rates going to go up too fast >> they have so far. i don't know in the last several days we've had a rally in rates and the stock market has been lower. that's all -- i mean, that's simple >> but you said -- all right i'm not going to put words in your mouth rates have not gone up too fast. >> i want to delve into some of
the stocks underneath the surface, transports were down 1.5% or even more, homebuilders were lower >> i'm not as concerned about that if you do go by the facts, the fundamental side of this entire story, amd, that guidance was not strong people looked at that, said the earnings look great, revenue look okay, guidance not so great. this is a stock that's moved rapidly to the upside. they're going to take some chips off the table. no pun intended. but then later in the day, you saw some of the names start to turn back around a micron, for instance, that was starting to elevate back up. i think it did have an effect on all the semis. i think the good semis, you want to be -- >> such as >> like the micron i'm already double dipping >> amd absolutely turned the tech tape, it led it lower the forecaster margins weren't as strong as people expected
you're right, it had a massive move people took chips off the table. a short-lived sort of phenome n phenomenon it's not necessarily signaling something that there's problem in those names >> it's not part of this rotation that we may start to see away from technology into industrials? >> look, since the august we've seen a rotation from defensive into cyclicals it's been 500 basis points of performance. this is going to continue. remember what got us even before to that period of august, it was mega cap tech which offered you decent growth if not very good growth we've seen major rotation. i think if we continue to get a sense of the global pmis do what they're doing, if prices are feeding through on the inflationary side record everything that's reflationary should still be bought wall street's biggest bull says today could be the start of an even bigger pullback. that may not be a bad thing. mike wilson is morgan stanley's
chief equity analyst, mike, good to see you again >> thanks, melissa >> what kind of pullback are you talking about? >> 3 to 5% max i think tim mentioned rsis the rsi and the s&p has been above 70 for 15 consecutive days that's only happened 13 times since 1975 when we see a pullback of 2%, an average of 4 to 5% so we're not calling for the end of the bull market the rotation call i think is just as important, however, as what you own as opposed to how much you own that rotation call, by the way, is a continuation of the global reflation call from last year. and this is what we've talked about on this show for many times. this year was about consolidating the initial excitement around global reflation last year. took a pause, in august they got totally priced out and it was due for the second phase that's what's happening right now. >> are you recommending people do anything in preparation for
this >> it depends on the client. in our wealth channel, most clients should sit tight, if they've followed our advice and rotated into these light cycle sectors, they'll be fine it may feel like armageddon for a couple of weeks because we haven't had any corrections all year but our advice is to sit tight shorter term people, it's probably the first tradeable correction we've seen all year >> mike, i'm curious at what level in ten-year interest rates, because we were talking about that, do you come out and say, you know what, this is something more serious. is it 3%, 4% >> this gets back to our original view on equity risk premiums 275 is the level we think we can get to without seeing degradation. that's 5 1/4 or 19 times today we traded 19 times since calendar '17 we get to 2700, no problem above 275, towards 3%, i mean, it's going to become a valuation constraint you said earlier, bonds become a
real alternative at 3%, the real money starts to shift there. we're for near there right now there's a series of things coming together. in august, we were begging people to step in and of course people didn't want to touch stocks at that time. other people were arguing to buy stocks too but very nervous about balance sheet reduction. very nervous about north korea very nervous about the fed chair, who that was going to be. now those concerns seem to be put aside. the biggest concern or not concern but reason for a pullback is just earnings sell the news that's the pattern we've seen all year stocks run into earnings companies report the good reports. and then you just state 'em. that could be worth 3 to 5% right there. it's not the end of the cycle, it's not the end of the bull market third quarter earnings got priced now we have to wait for the fourth quarter and 2018. >> have you put out a forecast for 2018 >> not yet, we'll see later in the year >> what's your sense right now >> it will be a much tougher
year than this year. the last two years have been fabulous, great earnings cycle the two-year comparisons start to come around in 2018 once tax gets fully priced, what do i have to look forward to next year will be a tougher year >> mike, there's probably a lot of money, though, sitting at home that says, i'm not in and i want to get in is this the wrong time i know you said to tell you back to buy no one's going to ring a bell for these people, when to get in and out. you're on the sidelines right now. are you allocating >> we're fully invested, overweight global equities at this point we're not doing anything right now. our advisers who have cash on the sidelines, i tell them, look, this is not a time to be incrementally bullish. that was in august here's where you pause a little bit. if you're doing dollar cost averaging, there are times when you accelerate that. this is not a time to accelerate we're not telling people to wait or pause in their regular allocations right now. we're in a secular bull market
we want people to be allocating towards equities probably for the next several years global equities is the place to be probably for four or five years in our view. >> mike, thanks for stopping by, mike wilson. >> mike brought up something interesting. it's something i trade off of not necessarily in the broader market because the broader market is the broader market i look at individual names and rarely etfs. home depot comes out with incredible earnings. that stock eventually comes down 10%, a buying opportunity, right back where it was. you can see that time and time again. whether it's apple in the 160s, then gets about $15 off of that, suddenly it's a buy again. i think within the market, you talk about rotations all the time, but within the market, when you've got great numbers and they come out with great numbers and they sell these off, that's the great opportunities >> it sounds like you're thinking about a particular stock. >> multiple stocks, absolutely i think if we see that happen in the tech tomorrow, that will
be -- if microsoft, a stock i love, comes out with the earnings i expect, that will be a buying opportunity >> around earnings, that's the theme, he nailed it. the patterns and the way institutionals are investing these days is very different than it was three, four, five years ago. there's a buy and hold strategy based on the fact that there's passive investing. the active funds are absolutely not turning their portfolios over as much there's less liquidity it's simple, we don't want to sell until there's a reason to around different reasons it could be earnings, it could be whatever, end of month, end of quarter >> what did you do today >> here's what i didn't do i've said it before, i didn't cut my flowers and keep my weeds. great quality earnings came through. a name like gm had a nice pullback today was that the top yesterday no, you're going to see upgrades if you see a break in momentum, and these are names i have a
tougher time in difficult times, those are names i trimmed, that had already pulled back 5 to 10% in the last week that doesn't matter to me. i would rather get names i'm less confident about off the balance sheet, whatever that time is. i think earnings have proven to be very high quality >> i set myself up for the earnings coming out tomorrow i talked last night about google, how that might be an issue. some of the advertisers out there not doing as well. maybe that hits google but talking about that rotation, what i want to be prepared for tomorrow is if we get a selloff in google or i'm sorry, alphabet nowadays, if -- it will always be google to me. i probably want to be a buyer on that, assuming there's not some kind of weird thing in the earnings if it's a selloff on a minor hit or miss there, i want to be a buyer tomorrow coming up, check out shares of amgen, sinking following earnings a top technician says something in the chart suggests now might be the time to buy plus general electric shares
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welcome back to "fast money. amgen sinking in the after hours session after reporting earnings medical tell meg terrell is listening to the conference call. >> reporter: hi, mel, i'll put the phone down for now you're seeing the shares lower after hours. the company really beating because of cost cutting including on research. that's something we've been seeing for a few quarters now. analysts pointing out that product sales declined by 1% of the quarter, some honing in on their new cholesterol drug sales of that drug growing a little more slowly than some expected, coming in around $83 million for the quarter versus expectations of more than $100 million. rbc calling that growth dismal looking for updates on that trajectory on the call
the company says it doesn't expect supply disruptions in puerto rico but did detail a quart quarter hundred million dollars in impacts amgen ended the third quarter with more than $41 billion in cash a lot of that overseas, guys we'll be listening for any updates. back to you. >> thank you, meg terrell at headquarters our next guest says when it comes to amgen, stay calm and keep dying carter, hi >> hi there. this is the preeminent b biotechnology company. i think what's important is this as unhappy as this it, the next chart will put this drop in perspective. we see it's trading here at 173 post close now, take a look at the chart of amgen. this is a five-year chart, how it broke out
this bottom trend line right here is exactly where the stock is indicated meaning it's probably already found the level that it's going to find. the key is that it flirted with breaking out once. often you get a little pullback, which we're getting. that's no big deal, i would say. and then the real bet is that ultimately the way forward is out of this formulation. so again, it doesn't done anything wrong as a biotech but a beat the market kind of stock and best in class in terms of biotech generally. let's talk about ibb and then i'm going to quilt. one-week performance, this column, one-month performance. biotech by far worse than health care, and health care worse than the market over the last month, same pattern. biotech as a subset of health care, health care and the market let's do a few lines and take a look, a two-year chart often you get back to a prior
high and you find difficulty the key is we have a well-defined up trend, a sequence of highs or lows. how do we get there? take a look at that line it starts with a triple bottom then add another line. it starts with this formulation. then the final line. all we're doing is checking back to that trend line which in principle should then get us back on our way of a perfectly normal sequence of higher lows, higher highs, and ultimately we take out the high, which is what this setup looks like. so i want to buy the weakness in amgen because of the news. >> i'm not even going to ask it is taken for granted here that carter comes over >> does he want to come over >> i didn't even -- he could say no >> he could say no >> biotech is part of the
nasdaq, it's part of technology, basically, and part of health care is there a tighter correlation to be technology to be worried about a tech chart when it comes to biotech, or do we say health care is strong >> that's right, individual equities, it's really about the beta as a group in principle, qqq type names, there's a lot of correlation, at least people treat them the same. whether they deserve to be correlated or not. the issue, of course, is so much hinges on a few big names here one of the things about a market in general, if you have exploitation of potential, every caterpillar that breaks out, every 3m that breaks out, you've exploited the potential to break out, you've used fuel. you'll need these fellows to come forward in the next week to push higher. >> did you see any change in character when gilead does the deal with kite
a lot of these charts, not to get overly technical and wonky, they've gapped up and start to consolidate. that's usually bullish, it hasn't been this time. >> almost euphoric we've seen that in semis you can start to put any dreamed multiple on it because it's all unknown, right the kite thing was a big thing what we do know, though, is if you were to have to make a structural bet on a longer term basis, there's a lot of opportunity in biotech, whereas other parts of the market don't have that. >> in the biotech world right now, whether it's amgen or gilead or celgene, are the volumes there that encourage you with what you're looking at on the charts themselves? >> most of the volume has been very heavy, dropping and gapping. we've seen that in celgene, in biib, it's going to be happening tomorrow in amgen. that's typically signs of either news-related selling or just general get me out a little bit, let me reduce its distribution but it hasn't damaged that ibb
pattern. that's the primary point >> carter, thank you carter braxton worth >> i love that call. i think large caps in favor, i want want to stick with the large cap famous kite, the gilead/kite deal, that was the all year you could step into large cap biotech again. the ibbs is the way to express that the amgen name is one you want to own on the week >> on the amgen call, i'm not in any of these biotechs at all, the first time in a long time, i'm in merck, i'm in pfizer. i like what carter had to say about the chart. i love the $41 billion they've got. the fact that they've sort of cut back on declining sales and cut back on some of their cost controls make me wonder, are they in a position where they're going to pull a gilead, will they finally pull the trigger with $41 billion on hand to make something actually happen in the future i think they are >> all right still ahead, big tech on deck amazon, microsoft, and intel get ready for earnings after the
bell tomorrow. we'll tell you which names traders see having the biggest move i'm melissa lee, you're watching "fast money" on cnbc, first in business worldwide meantime, here's what's coming up on fast it's shredding shareholders at an alarming rate. are any executives buying stock on the way down? we have a special report plus bitcoin pull tom lee is taking on in order to short seller andrew left in a no holds barred debate about the crypto currency it could get downright nasty and that's when "fast money" returns.
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falling before recovering slightly nike posted its best session since late june after the company gave upbeat expectations on its investor day. cnbc's sara eisen spoke with the ceo about the shift in the retail space and the company's transformation plans >> i think we've seen that acceleration of the retail consolidation going on over the last 12, 18, 24 months and that's obviously accelerated the overall market what we're doing is actually shifting our position to go more direct, to create more differentiated retail and create a better experience for the consumer moving forward. >> one day wonder or is it turning the corner >> everybody's going gaga over
them when they come out with a five-day plan. obviously there's a lot of short covering today the structural decline in their business is not something you can back off and forget about. adidas is coming in and taking market share their products aren't necessarily identifying with or you could say children or, you know, consumers aren't identifying with their product the reality is this is a name i would absolutely not be buying here i would be taking profits here if i own the stock or taking chips off the business >> if there's structural decline in their business, at last structural decline in adidas' business nike has underperformed. this investor day reaffirms that -- >> hold on let him talk >> bottom line is adidas suddenly has the cool factor growing up, anybody that was cool was not wearing adidas. not that it matters now, and maybe i'm not cool >> the most important thing here is, folks, the perception of the stock that's been priced in, the
move in north america. we know that adidas has dominated, the move from converse into vans you have to tell me that the stock is structurally dead you have to tell me that athleisure is dead and people aren't buying sneakers they are the brand coming up, ge sinking to a fresh 52-week low today. ltmpany insiders are signaling a bo we'll explain. more "fast money" still ahead. my "business" was going nowhere... so i built this kickin' new website with godaddy.
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i went from being a cpa to a tax attorney because our clients needed more. call us, and let us put our 30 years of tax experience to work for you. welcome back to "fast money. this is the moment you've been waiting for. it is here bitcoin is up 486% this year still the object of widespread speculation. and now two widely followed voices on wall street and frequent guests of this show, andrew left and tom lee. both have been right so far, left announced he was short bitcoin trust, a vehicle some investors use to invest in bitcoin. take a listen. >> just go read the sec filings and you'll see, they do not even have insurance for the bitcoin
that they are custodians of. this is bad and worse all rolled up into one. >> since left shorted the gbtc, it's fallen 33% while the price of bitcoin has soared. tom lee, on the other hand, has taken a more constructive view in september when i asked tom whether he would buy bitcoin over current u.s. stocks, this is what he had to say. >> unequivocally believe bitcoin is your best investment into the end of the year. >> pretty straightforward. since then the s&p has rallied 2% while bitcoin has outperformed the market and surged over 46% in that time frame. tom lee came out with a note today in grayscale's bitcoin investment trust, saying it is, quote, an attractive way to gain exposure to bitcoin and one of the only games in town so two of the street's biggest voices on bitcoin at odds with each other
we thought we would invite them both on for the ultimate bitcoin battle royale. tom, let's start off with you. why are you so bullish this particular vehicle, the grayscale bitcoin investment trust. >> there's a couple of reasons i think primarily, the bitcoin investment trust gives you exposure and most of the upside of owning bitcoin, but in a liquid vehicle as we published in our report, if bitcoin reaches our $25,000 in five years, the gbtc is going to be valued at around 2500. it captures roughly 80% of the move that's assuming the nav goes from 20% to zero, the nav premium. >> andrew, why is tom lee wrong? >> well, first of all, he said if you believe in bitcoin the gbtc will allow you to capture most why not capture all by bitcoin that's liquid as well. as a matter of fact the bitcoin
investment trust is not that liquid that's on this particular vehicle. not to mention the fact that they don't have insurance on the bit coins they're custodians of. they are giving a distribution of bitcoin cash. but if you wanted to buy bitcoin, just buy the bitcoin. most importantly, what really bothered me, and the reason why i'm here today, about mr. lee's call, and he should know, i'm a fan of mr. lee when he's on cnbc, i make sure i listen in, i turn up the volume, and i know that when you discuss about gdp growth, maybe it's not that sexy, and saying bitcoin 25,000 is sexy, but i think it's irresponsible right here a year ago this week, this was around $690. we don't even know what bitcoin is right now he referred to it, his target is basically around 5% of the price of gold. looking at it as a commodity i know other people are looking at it as a -- i know professor adaran is referring to looking at it as a currency. we see bitcoin itself this year
has gone bitcoin, bitcoin gold, bitcoin cash, and now we have another spinoff in two weeks, bitcoin 2. all these various bit coins. it has to find its identity. before you tell people 25,000, and you allow people to think i'm going to get rich, the thing about the gbdc, it's easier than opening a coin wallet. you just think it's not responsible, mr. lee you have to acknowledge the fact of where this was a year ago and people are watching you. average investors. before they start buying bitcoin at $5600, they should think twice, more than twice >> tom, and when you keep saying mr. lee, i keep thinking you're talking about my dad, tom and i not related. but tom, andrew makes a good point, when you see this vehicle doesn't necessarily track the rise in bitcoin, maybe bitcoin
rises to your target price, but the grayscale bitcoin investment trust may not. >> well, melissa, i agree, in fact i might even say i didn't even disagree with a single thing andrew said. i agree this is a very risky investment but the advantage of owning gbtc is one for our institutional investors, unless their mandate allows them to take custody of the coin, they are going to have difficulty actually buying the underlying coin for their counties, but they can buy this etn. additionally, for clients of 401(k)s, et cetera, this is a way to get some exposure as we've written clearly in our white paper, we think an exposure to bitcoin is a small portion of your portfolio. because it has negative correlation to other assets, just a 2% exposure actually helps your overall returns without letting you take that much risk. so i agree, when we talk about
25,000, we don't recommend anyone put 100% of their holdings in this instrument. but again, it's very easy to buy this because it's publicly listed >> andrew, mr. lee makes a lot of good points there in terms of some institutional investors' ability to take possession, take custody of the bitcoin in terms of your view on bitcoin, andrew, is it specific to this vehicle, that you're short on this vehicle? or if you were able to, that you would short bitcoin itself >> the difficult thing, if you believe bitcoin -- i would short the vehicle initially, when it was 100% of the necessary asset value it was trading and it turned out to be a tremendous trade. right now, i'm still short in smaller size, because i have to respect what could be a bubble i'm not saying the underlying technology of bitcoin, but when you have black rock who came out today, goldman sachs, most importantly the sec today, after the close pulled the registration of the grayscale s1
for the etf. goldman sachs is saying this is uninvestable i'll be short at these prices, but i'll be short cautiously but the headline that mr. lee put out that was put out with a 25,000 target, based on the total goal outstanding, i found that analysis, maybe a thousand or 800, but i think he has to understand what he could have done to the individual investor who is going to follow him into this trade at 5600 and it's irresponsible, even if they happen to miss it and it goes to 7,000 without them, it's simple as that. >> tom, what would you sayto andrew or the individual investor who you apparently steered wrong? >> i might completely agree, we don't know how to properly establish what the upside ends up being for blockchain and bitcoin. we've spent a lot of time on
this i used to be a tech analyst. it reminds me a lot of how it was very difficult to understand how the web was going to affect the economy or social media. one of the challenges is as an investor, you won't be want to have some exposure i mean, imagine if you could buy -- you could have bought google as an early stage company in 2000, but you were worried because you didn't know how big the search market was going to be i think that's really the same issue you would face today when you think about blockchain and again, i wouldn't want investors to put 100% of their money into bitcoin but i would say that when you look at bubbles, bubbles generally peak when an underlying asset class is 35% of the addressable market that's the nikkei in the '90s, that was gold at its peak, that was housing as a% of gdp, that was the nasdaq bubble, that was the biotech bubble to treat bitcoin as a bubble today, you would have to say
it's 35% of the market that means bitcoin is 35% of a $300 billion market. but what markets are $300 billion today? i actually think it's still early, and it's not late stage to be looking at bitcoin as an investment >> one last word to andrew left. andrew i don't know if you agree with the likes of a jamie dimon who thinks bitcoin is a fraud. >> well -- >> how does this end in your view >> i think the word "fraud" is a big word >> does this go to zero? is this a bubble waiting to burst? >> i don't think it's like google in 2000 i don't know if google was public in 2000 i remember yahoo! in '99 when it was 130. this could be the first stage of what we see for blockchain as for bitcoin, mr. lee, do we buy bitcoin 1 orbit coin bitcoi2
do we buy bitcoin gold orbit coin cash? it has to keep its identity and we have to understand is it a currency or an asset until then, it's uninvestable. >> good points on both sides bk, resident bitcoin expert, what do you say? >> listen, i think i'm more with tom lee on this. obviously i'm biased if you look at bitcoin, i think tom has actually been quite measured in what he said about this he's got a five-year target that says if bitcoin gets to be 5% of the market, this is your price he's said put 1 to 2% of investable assets in it. i think that's right andrew mentioned that yahoo! was the big name in 1999 we didn't know that google was going to come along. i don't know if bitcoin is going to be the ultimate winner. i do know there will be a token that trades around the world
that represents blockchain, that is a global currency right now it looks like it's bitcoin. it could be something else why not have some exposure to it coming up, nearly $2 trillion in market cap amazon, microsoft, apple, alphabet, all report earnings. 'ltewel ll you which names traders see moving the most. more "fast money" still ahead. l. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor. and the wolf huffed like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in.
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amazon, microsoft, google, report earnings tomorrow let's get to mike khouw in austin to break it down. >> reporter: hi there. we're looking at big moves certainly in market cap terms. amazon is looking at a 4% move, alphabet aka google, also 4% microsoft, about 3.5%. put it all together, that represents about $67 billion in market cap swing potentially as far as the options market is concerned. a quick point about that also, these are in line approximately with the average moves on earnings over the past eight quarters for each of these >> pete, earlier you were saying if microsoft saw a pullback, you would consider buying. is that sort of a pullback which is an average move enough for you to buy >> add, because i'm already in it, i'm in the calls and the stock once again in that name as well i believe in the story i see their growth i think they are taking market share away a little bit from aws and the rest of the competition. i think their growth is strong enough i would want to buy >> for an amazon and a google,
it's all about the acquisition costs, how it comes in, are they decelerating or accelerating i think you'll see potentially -- gross margins are the most important thing with amazon if there's a little bit of an uptick, that stock could rip as well >> what an impact this could have on technology >> it's a big day. i think the expectations are not terribly high. in the case of google, all the google sites, hardware, in terms of their advertising, youtube is really starting to move the needle i think youtube is very undervalued in their entire complex. yes, stay long in those numbers. >> earlier i talked about, you know, advertising is slowing down, it appears with the big ad companies, maybe that will come over to google they do have a lot of ways to monetize i think on any type of normal selloff, i think google or
alphabet is the place to be. >> mike khouw, thank you for that for more options action, check out the full show friday, 5:30 eastern time coming up, ge hits a new 'l-week low. wel tell you what could be signaling a bottom, when "fast money" returns i think it's terrific. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.
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on adp iss is recommending bill ackman to the adp board, saying ackman's real estate background could be helpful given adp's ongoing initiatives to rationalize its footprint. this follows a similar recognition from glass lewis >> thank you, seema mody recommendations from these proxy advisory firms one reason ackman went into this name is because of the large base of retail investors who don't necessarily vote with iss. >> there are other advisory firms that got on board, that's their business, to say we're going to add value for you, we'll give a hard look at the activist investor. this is a massive company. to assume they can do more with their size and scale is to assume these guys can make missteps as well this company was doing very well going into this activism i'm not sure you have to jump into this. advisory firms coming on board is not a reason for me to say ackman is in the driver's seat stop me if you've heard this before general electric shares were
lower today, down another 2% the stock is now down 15% in the last month alone but there could be a light at the end of the tunnel and it's coming from the c suite. morgan brennan is back at headquarters with the details. hi, morgan >> reporter: hey, melissa. tough month, tough week, tough year, now down 32% for 2017. but with a new ceo and management team, there are some clues on how execs and investors are viewing ge's prospects insiders rarely sell ge. that hasn't really changed ben silverman says since 2017, selling by outgoing vice chair beth comstock. before that, 2016 had only one, a transaction by jeff orenstein, his first and only sale on record that one and joyce's this year
were for real estate transactions comstock not really clear. but the buying is what tells the bigger story former ceo jeff immelt was a pretty big buyer, including four weeks before his retirement. new ceo john flannery seems to be taking a similar approach in august he boosted his stake by 20%, spending 2.7 million dollars. ge has five years to build an equity stake worth ten times starting salary. i'm told flannery has already met that since april 6th, other board members bought, including james tissue of lowe's, whose $2.5 million investment was his first since joining the board in 2010. so perhaps a vote of confidence. and it would seem, looking at what the stock was doing, right when ge might need it the most
>> thank you, morgan brennan it's not the first time the ceo has jumped into a falling stock. jpmorgan, ceo jamie dimon buying shares at $53 a share. in february, what turned out to be the dimon bottom. in december of 2015, scooped up about 1 million shares, around $64. the stock is up more than 120% since then so given all of that, do you think the rise in insider buying in general electric could be signaling a bottom in the stock? pete, i go to you, you site steve wynn >> because of what steve wynn did, that guy was unbelievable, we documented that, to say, look, here's the one difference. steve wynn was buying a stock that he knew very well, not that these guys don't, but it also had the fundamental backdrop i don't understand the fundamental backdrop of ge to
say this is the bottom and i need to buy because the insiders are showing me some leadership i like that they're doing that it is a commitment, melissa. when i look at the fundamentals of the company, i'm not blown away to say, you know what, they've still got to make changes before this thing could turn >> the implication or the thesis is that the ceo theoretically or the c suite knows about the industry and is eating his own cooking. >> the previous history of ge, as she went through that, doesn't show me that, didn't impress me all that much in terms of ge. >> they don't have the track record, right? it's like any portfolio manager. jamie dimon has the track record steve wynn has the track record. there's no track record here they buy it and it keeps going lower. i don't think there's a -- >> it could be close to a bottom it could also be dead money for a very long period of time the aspect that they have to sell a ton of assets, turning this ship around i'm with pete. >> i'm comfortable owning it up next, final trades.
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trade. sell emm and buy gbt i'm with tom leon that >> i'm going to keep it simple google is keeping it simple. those earnings i think will be beating the bar. i'm melissa lee. see you back tomorrow at 5:00 for more "fast." "mad money" with jim cramer starts right now . my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey i'm cramer, welcome to "mad money. welcome to cram america. other people want to make friends i'm trying to make you some money my job's to entertain educate and teach you so call me a