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tv   Fast Money  CNBC  October 27, 2017 5:00pm-5:30pm EDT

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facebook and apple, may cool off a little bit the market feels like we got it, earnings are in place right now. >> i think the one thing i'm going to be interested in, won't be here next friday, but wage growth the one thing we didn't talk about when we were talking about the bond market earlier. >> you'll be running with your air pods keep the mailbag coming, thank you both, that does it for "closing bell," have a good weekend, everybody, "fast money" starts right now "fast money" starts right now, live at the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," tesla is nearing a bear market, 8% from its 52-week high it could be flashing a major buy sign plus a slew of stocks reporting earnings next week one name the chart master says
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is gearing up for a breakout we'll tell you who is in the lead to win the coveted fed chair seat first, the nasdaq hitting a record high as big tech goes parabolic, $151 billion added. amazon, alphabet, microsoft, and intel, their stocks are soaring. next week, apple and facebook report their earnings. can you expect more of the same? and will these giants turbo charge the tech rally, guys? >> it will be harder for a company like facebook, for example, to do what a microsoft did today or an intel did today or any of the names you mentioned. they really have to prove themselves in terms of the stocks we saw, look at a company like adobe, lamb research, salesforce.com. other names are making all time highs.
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valuations for a lot of these companies make sense throw amazon into the mix, obviously. out of all the ones we mentioned, the most impressive to me was alphabet for a number different reasons. >> i agree with guy's reasoning. you had facebook up 4%, apple up 3.5% facebook is up 54% year to date. amazon is up 46% year to date. amazon really played cantch-up t the rest alibaba up 100%. this is one that i'm focused on next week, along with facebook and apple. >> is the setup too difficult for these stocks at this point >> we were listening to styx at the opening of the show. facebook's report was unbelievable if you think about two or three-quarters back, we were very concerned about their ad growth that is very much behind them.
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they've got new products, this graph search thing, then the monetization the long term monetization is embedded in this space i think facebook can move higher at least relative to that peer group. >> i think facebook can go a little bit higher depending on the earnings the problem is it did run on the heels of all these names today so it got a little bit of a lift into the earnings. i don't know if it's got that much more juice to go a lot higher unless they blow it out, i don't think it goes a lot higher when you look at tech and then, what's the incentive ahead of potential tax cuts, tax reform in some way, to sell before the end of the year? why would you take the gain this year why wouldn't you let it ride >> today was the last day that mutual funds could sell. most mutual funds, a large majority of hem, their fiscal
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year ends in october today is the last day with settlement that they could have sold >> also seasonality, particularly for technology. >> these are great points these guys are making. again, to sell a stock because of tax reasons is idiotic. >> no, i said these are secular growth trends. with tax reform on the horizon -- >> if somebody says i'm going to take some money off the table, they probably second-guess that decision i think tax at least abates selling, forces people to hold on to it >> what you're saying is the opposite if you think facebook is having a big run and there's not a lot to do -- >> i'm not saying that i'm saying is there a lot to do after they report numbers. is the quarter going to be good enough to keep the momentum going? i don't think it's going to be up >> stocks held the market up
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today, it was all tech we keep coming back to this theme of whether or not we're going to have new leadership or rotation every time you get rotation it always comes back to those minimal names in tech. you're always slapped every time -- >> look at the money that came out of large cap biotech in certain names there's a lot of money that came out >> are you buying? every pullback we've seen, you're a buyer >> i would say in general a lot of money that came out was dislocated people walked away from the celgene story in a lot of cases. money came out of those big cap names and had to go somewhere. now they're comfortable to go into f.a.n.g. names. >> it does feel like there's a rotation today i read rich ross >> he's in the top 12 or 13. >> he pointed out something very smart, when value and growth are working at the same time, when we brought the growth trade back, it's a very powerful combination. it's kind of what we saw in the
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late '90s. >> real quick on celgene, i think it's worth talking about again. dan nathan who will be on the show, what's the show after this >> "options action." >> you're on that show, man. >> that's neither here nor there. he was somewhat dismissive of me last night when i brought up the fact that celgene -- thank you for pointing that out -- that celgene should have said, everything they said in their earnings report, they should have said a week ago when the drug they invested so much money in, they took out of phase iii that being said, the levels in celgene all through 2016, celgene needs to do something to regain the trust of the investment community quite frankly they didn't succeed in doing it this week. >> for all of these large cap biotech stocks, they seem to have fallen out of bed on the back of their earnings reports what catalyst is there at this point to stay until the end of the year >> m&a >> so you're waiting >> that's a good point, you're
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100% right that could be a scenario where if you get a loss, you move it out. that could be a second that people will take a loss if they have that in the setup >> i like the fact that, you know, even gilead last night, those numbers are actually pretty good. hcv was quite light. if you think about the other parts of their business, the acquisition, i think i've got a lot of information there to still make that same call, which is that this is a very cash-rich company trading at a cheap multiple that's the reason to buy the stock. i am long it >> it's still up 18% year to date if you want growth, you're going to get it in large cap tech. when people get tired of large cap tech, they'll rotate back into ibb and play rinse/repeat >> people are saying they're not getting tired of large cap tech. >> two or three weeks ago we had a selloff in large cap tech. they've rallied back apple rallied 10% back facebook rallied 10% back. amazon is up 18% since september
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lows people did get tired of large cap tech now they're back in the boat >> tech of the s&p represents 24.4%, right is it going to 30% of the s&p? it could but the last time it did, that was -- >> every time people use that argument against energy, energy is shrinking and shrinking percentage of the s&p. every time people look at that and they try to buy it, they get sucked in. now, crude, the commodity, goes up the underlying stocks have not performed with the overarching commodity in the space >> one thing on a friday, you're looking forward to some sort of buying euphoria, buyers to exhaust themselves when you have stocks like intel, like google, like facebook, for example, trading anywhere from three to six times normal volume at effectively all time highs. if you're looking for a top, in other words, this isn't the place to pile in, in my opinion. >> i'll say this about apple, the other name we haven't really
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talked about they've got earnings next week the stock has done nothing since april. we talked about how it rallied into the release it tells you where sentiment is on this stock. a headline on demand for the x or 10 -- what are we calling this >> it's called the ten >> i'm changing my answer. >> anyway. >> my point is sentiment is such that any whiff of good news, apple has a lot of room to run in terms of multiples, where do you have -- arguably you can make a growth multiple on apple too if you start looking at the services business and what this should derive. >> apple or facebook ahead of earnings >> apple >> or neither. >> you don't often do that, mel. >> i was feeling charitable. >> i'll say apple because i'm long apple >> facebook with a caveat. is that like a greek or latin? >> latin >> i know you took -- anyway, i think facebook into the winter
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months they're going to -- something is going to happen politically that might derail facebook in the short term, i'm putting it out there now. a rocky ride for tesla shareholders, the stock is sliding near bear market territory. it could be flashing a major buy sign we'll explain. the position for arguably one of the most powerful positions in the free world. the fed chair is hanging in the balance as president trump is ready to make his decision next week who do the traders think would be best for stocks they'll reveal their top picks general electric going from bad to worse the stock sinking to new lows. one trader staying long and strong he'll explain why. much more "fast money" coming up next today, big thinking in the finger lakes is pushing the new new york forward. we're the number one dairy and apple producers in the eastern united states supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. all across new york state, we're building the new new york. to grow your business with us in new york state,
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witness katy perry work. witness katy perry firework. witness katy perry swish. witness katy perry... aaaaaaw look at that dog! katy perry: with music videos and behind the scenes footage, xfinity lets you witness all things me. welcome back to "fast money. shares of tesla falling 17% from last month and nearing bear market territory let's go to a man who is never in a bear market himself, dom chu, the aheadquarteat headquar. hi, dom. >> reporter: it may not be something to fear, we're close to entering bear market territory. shares found some support in the moving average today, that longer term trend line, of course tesla is a stock that's been a roller coaster ride for sure
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over the years for investors there have been a number of times you've seen 15% pullbacks. four times we entered bear market territory for tesla from the end of 2015 until february 2016 around that diamond bottom, it rallied 90% from there to early april, from there dropped 30% to the end of june, then rallied 25% to early august, only to drop another 24% until early december then there was that massive push higher towards those end of june highs. then of course that 21% drop until mid-july then the 30% rally to record highs, till we dropped to where we are now the point here is tesla is, yes, a volatile stock analysts aren't rush to go raise their target prices. the average analyst target price currently sits 4% below where it trades so now, melissa, we'll wait and see if the experts who watch this stock and get paid to do so use the opportunity for this kind of weakness to upgrade or
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forecast tougher times ahead >> thanks, dom chu at headquarters model 3 deliveries are being questioned and a separate report says that a supplier in taiwan was asked to cut back dramatically on its supply that fuels concern ahead of tesla's earnings next week >> many of the headlines, most of the headlines have been lousy. kudos to bk. in the summer we said tesla goes higher, it needs to prove itself and those all time highs we saw over the summer, failed at 385 in september we said the chance of trade is down to 320. here we are at 320 good job, bk next level, 2014, 2015, 280 were tops, we made both tiers support becomes resistance or resistance becomes support we'll find it in the form of 280 post earnings come wednesday, i think. >> huge move from here the short interest in tesla is still above 20
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and when you look at it on a chart, the 317 level, 317 1/4, 200 day moving average, closed above it today rsi relative strength index, it's oversold. i think it's worth it versus the 280 level. >> i feel like it's going to trade like biotech stocks. when they say on pace for deliveries, the stock is poised to spring. >> tesla can be whatever you want it to be. it's interesting, i was interesting jpmorgan's report, good for them for putting it in the auto category because no one is doing that. they're talking about lower margin and delivery assumptions on the model 3 i think tesla is starting to lose some of that mojo about being the only ev game in town good for gm and ford for articulating, we know what volvo is doing, we know the germans are way ahead. that's the story general electric closing at
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its lowest level in five years, the stock approaching the key $20 level in its flash crash low of $19 a share tim, you bought the name a week ago. >> i'm down about 8 or 9% in a name that is priced in no dividend, a name that has priced in essentially the entire kitchen sink these guys are not making money anytime soon there may be a burn. think about what they could do this is a 12 to 18-month position they can spin off baker hughes, which was a terrible buy they could start to see a recovery in energy assets. i expect to see oil at 60, $70 next year. if they initiate this dividend, the stock is moving 10%. >> so 21 was the level, then it would followed by 19 if you had a strong stomach for it. i don't disagree with tim's trade on the name. if you're trading on pure technicals, i think you have to
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vacate the name because it broke that level, today was the first day. you watch it a couple of more days if you're trading on strictlily technicals, i think you vacate the name i don't think lack of a dividend is an in we have no factual information yet. we don't know the story. >> i would say the only reason the stock is trading here and not trading below 20, i think at 19 it starts to become a little bit interesting, is because people are hoping there's going to be some sort of breakout. there's a liability issue that's a big issue. >> what's the dividend worth per share, free cash flow. basically really there's zero growth >> we've gone from two bucks to a dollar on earnings [ simultaneous speaking >> a five-year mark on the stock. if it gets there -- >> 92 cents of cash flow and give them some residual on cash flow
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it's less than $20 >> last quick question at what level would you consider -- >> $18.50. their investor day is november 13th we don't touch it until then president trump is close to picking a new chair to run the federal reserve, arguably the most important position in the universe which candidate would be best for this rally we'll bring it down. i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. here's what's coming up on "fast. it's halloween "fast money" is going in search of four scary good stocks. we'll give you the names plus youtube just passed a major milestone that could spell 'lte wt h of traditional tv. wel llhayou that is and how to profit, when "fast money" returns. helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen
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while maintaining a level of protection in down markets. so you can head into retirement with confidence. talk with your advisor about shield annuities from brighthouse financial established by metlife. welcome back to "fast money. president trump tweeting moments ago he will unveil his pick for federal reserve chair next week. let's get to eamon javers at the white house with the latest on who is still in the running. >> reporter: that's right, melissa, the president tweeting in the last few minutes, "people are anxiously awaiting my decision as to who the next head of the fed will be." he links to an instagram short
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video of him discussing the strength of the economy. he says he has someone very specific in mind but of course in true television tease style, you don't say who that person is and step on the announcement there you see the five candidates that we've been told are still officially in the running, although when you talk to folks at the white house they say gary cohn is doing such a good job on tax reform, they may not want to move him to the fed. janet yellen is somebody that the president has said nice things about recently. then you've got warsh, taylor, and powell as the remaining candidates it sounds to me based on this instagram video that the president has made up his mind so who is that person? we don't know. but we do know that decision is coming next week i would say this, you know, janet yellen is somebody the president likes. there you see the instagram video the president put out a few moments ago. janet yellen the president likes, he likes to talk about
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the stock market publicly unlike past presidents, but he may not like the fact that janet yellen was appointed by barack obama. who would he go with he said he's a low interest rate guy, my guess is he ends up with somebody who is not gary comn or janet yellen but someone viewed as a low interest rate pick. we'll wait and see for the president, he's definitely amping up the attention going into next week >> he certainly is, we're sure watching thank you, eamon javers in washington let's take it from where eamon left off it won't be yellen, it won't be gary cohn. you've got warsh, powell, taylor who would fit the bill, who would be best for stocks >> it's no shot, it's warsh, i'll get it before he will, he's a pretty vocal hawk. the president talks about liked low interest rates now when he was candidate trump, it was a whole different story.
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>> of all the reversals, he was so critical of the fed, he was so critical of the approach to the fed. if anything, this is all about having continuity. >> there's a difference between r a candidate -- >> because taylor would be -- >> taylor is a regimented guy, may be a good thing, but not the guy -- >> doesn't matter. >> you saw the market react when powell was rumored to be announced. the market spiked up immediately. the market would welcome it. it has to be powell. >> it doesn't have to be anybody. the market will care for seven minutes. anybody who is on that list knows that he wants low interest rates. he's telegraphed it. the world knows, they know i don't care how hawkish they are right now or they think they are. >> it's about the pace of the way they -- >> do you think the pace -- it doesn't matter who he picks. it doesn't matter. >> there are also a lot of other vacancies on the fed too the fed chair is not the only one deciding -- >> there's a lot of -- >> -- everything
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>> he can completely change the composition. >> he won't do that. he'll telegraph the fact that he wants low rates. it will be a hidden message to them >> do we not believe the federal reserve is independent the federal reserve is independent. if taylor gets in there, he's going to have a different approach to interest rates and it will be very disruptive as you all know, halloween weekend is kicking off today, in honor of all things spooky and in lieu of the final trades, our traders are bringing you some scary good stocks for your portfolio. tim? >> love the oxymoron, scary good sometimes scary is good. yandex, this is russia's google. their taxi business is a big part of it >> i picked microsoft, it's scary to jump in to buy this stock but it's going to work long term. their cloud business is rambling big time their gross margins and hot margins are rambling as well >> this makes sense to me, square is up 158%.
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i get the scary, i get the good. i'm still long it, you should be too. >> boo >> are you dressing up >> damn straight cypress, very scary, very good see you back on the other side of this break when "options action" starts stay tuned but some people still like cable. just like some people like banging their head on a low ceiling. drinking spoiled milk. camping in poison ivy. getting a papercut. and having their arm trapped in a vending machine. but for everyone else, there's directv. for #1 rated customer satisfaction over cable switch to directv. call 1-800-directv. hi, i'm the internet! you knoarmless bowling.lt? ahhhhhhhh! you know what's easy? building your website with godaddy. get your domain today and get a free trial of gocentral.
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we're live at the nasdaq market site. the guys behind me are getting ready. while they're doing that, here's what's coming up in the show hey, you want to see something really scary >> you bet >> well then, look at what youtube just did to media stocks there's something in the charts that suggests it's about to get worse. plus miss the rally in large cap tech >> d'oh! >> and later, why is this man dancing?

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