tv Fast Money CNBC March 26, 2019 5:00pm-6:00pm EDT
tomorrow we have the ceo of barney's which just opened a high-ending pot shop in beverly hills. 10:00 a.m. eastern first time we'll hear from that ceo on why they're doing that. it's a pretty interesting move other department stores are not. >> we look forward to that but we are out of time for today's show that does it for "closing bell." >> "fast money" begins right now. "fast money" does start right now. as always live from the nasdaq market site in times square, i am brian sullivan in for melissa lee. it is what steve grasso is calling the most important chart in the market right now. how's that for a tease grasso will reveal what that is. plus, the ipo frenzy beginning to heat up lyft set to make its trading debut on friday. former home depot ceo bob nardelli says now is the perfect time to go public.
the stocks seemingly slugging off global recession fears at least for now the dow surging 250 points at the high of the session. we ended up around 140 points. the s&p and nasdaq both climbing just about 1%. it was energy that was the real standout today it was the best performing sector today and it added to a 15% gain this year all this as crude oil soars, crossing back above $60 a barrel brian kelly, you say this is the single biggest risk to the market rally right now. >> yeah, absolutely. >> why, and what are you watching >> in markets you never get hit by the bus you can see we can see what's going on with the fed, the markets reacted to that where else can we have that extra shock? to me it's energy. it is looking so strong. every time there's negative news, oil goes higher. that to me is a very bullish sign as oil goes higher, it's going to be a drag on the economy, it's going to slow down growth and potentially if it feeds into
inflation, it can force the fed's hand where they might have to be hawkish. after this entire dovish shift, all of a sudden oil comes along and said, you know what, the fed will have to be hawkish. to me if i'm looking for risks, i think there's money to be made in the oil market. but if i'm looking at the bigger picture, oil is your biggest worry out there. >> i understand what brian is saying i guess the conversation is, is oil going up for the wrong reasons, which i think it is, or the right reasons. >> what are they >> the wrong reasons would be on the fact of a dovish fed that are torching our currencies as are other central banks which makes commodity prices go up but not because of robust growth the right reasons are economic growth, which we're clearly not seeing so i think energy stocks continue to go higher. tim has been on this theme whether or not those are going up for the right reasons or wrong reasons i think is immaterial these stocks can go higher
becausing e ing ienergy is unded underappreciated not the least of which cabot oil and gas. >> it's underowned in part because this is where investor dollars have largely gone to die over the last decade >> brian, to that point i think it's probably been something that's underperformed, but i think the energy sector has been outperforming because it was the most shorted sector. the reality is people don't understand that a lot of the big companies and even some of the service players, some of the elps are running these businesses differently they're not running -- they are running them for the equity holders and you have ceos that arin -- incented differently i think energy prices on the up side and the downside have not been a headwind or tailwind to
the consumer the energy prices wasn't supposed to be a surplus an stimulus -- >> i think it probably was, though i think it's probably at least a couple of times been what softened the blow. if you look at gasoline prices, they're $1.25. $1.25 a gallon but that was in december that was in december and it's $1.95 right now. that's my point. >> only back to where it was in the fall, though, b.k. >> that's okay. >> i think that's the important thing is that energy, on a relative basis, you can make some money for the long haul you've lost money here i think the most important thing still to the market is the fed so whether or not it's the fed playing around with the dollar, the fed playing around with rates, it's rates first, it's energy second. but i do believe that the run in energy is probably coming to the end so i'll take the other side. >> i hear your point but let's also talk about fundamentals supply is down venezuela could be at 100,000 barrels a day in the next couple
of months. iran, the sanctions still in place. >> where's america though? >> we're at 12.5 >> but that's more than the saudis -- >> we're importing zero from iran or venezuela. >> did you ever think -- i hear you and i'll give you those points but did you ever think that america would get to the point where they're outproducing russia and the saudis. >> i did only because we've been deep in the story the last couple of years and that is tremendously bearish for the energy complex notwithstanding. >> the venezuela one-off matches it. >> the one-offs that you're talking about, geopolitical tensions are trance tore at best. >> just take a look at xop you can buy into this or not but as a hedge for your portfolio why not look at xop. it's oil and gas and the producers of it. it's going to effectively track oil. not a bad place to be for some portion of your portfolio to
hedge everything else. >> do you believe $60 is the pain point >> no. the pain point is probably closer to $75 or $80 a barrel, which we're quite away from. but things happen quickly in the commodities world. remember how quickly crude oil went down a few years ago. it's going up now and i think it will end with a kre shcrescendoe upside >> the xop that b.k. just referenced, tim seymour, mostly the smaller caps, the whitings of the world, these highly volatile stocks. tim, would you be a buyer of some of the midsize companies or large cap companies or none of them >> the mid-cap e & p names are being run significantly differently than three or four years ago. i also just think that there's discipline throughout the entire space. at one point we looked in 2015
and 2016 and thought price was truth. we thought oil prices were indicative of what was going on with the broader economy i think it's really bottom up. i think it's very much fundamentals i do think that the industry is being run differently. and oh, by the way, demand isn't going down as you pointed out. but eog, apc, these are names that are as blue chip as you're going to get on the production side look at chevron, look at royal dutch. i know we don't play for dividends typically, but chevron probably has the best discipline in the big e & p integrated names like that. >> okay. good discussion there on oil and gas stocks now let's turn it to steve grasso because we know he has been watching some very key levels in the s&p 500. so steve, why don't you head over to the plasma and break down those levels. >> without question this market has been extremely resilient why don't we look at the levels you need to watch for bulls and bears. if you look at it through this prism, this was your ultimate high, your historic high, then
we had the abyss that happened right here this was down to the 2346 level in the s&p cash. everyone knows the all-time high which was 2940 now we're in a different world right here obviously the bulls have won pretty convincingly here, but the main level to watch is this level right here that we've all talked about, the 2815 level so we've had one, two, three, four, five, and then we pop through on basically the sixth try here every time you're rattling across here, you know the level that you need to hit and you know the level that you need to break through and even supports that strength or it weakens it in this case it looked like it weakened it. but to clean this chart up a little bit, let's go back to the other one. to clean this chart up when you look at the s&p, you want to focus in on this level right here so this is the most recent low
that we've had because you've you're a bear, you've got to play for pennies here unfortunately for bears. so 2785, recent low. 2860 recent high so we're going to be banging around here. but to me it looks like wee doing the same thing we did to the upside to the downside the ultimate level here, 27 basically 39 is where you want to look. obviously you have a little noise with the 200-day moving average but keep an eye on these levels 2815 is your barometer, 2785 for a lot of push and momentum to the downside. >> steve, i'm in your camp and i've been incorrect but does it surprise you that we're in this 2815 level now seemingly for the last two and a half, three weeks. the fact that it's staying here, does that make you more inclined to be bullish and make that move to 2940? does the market give you this much time to sell the highs? >> i agree you and i have been on the same
page, looking for lower markets. the next chart i feel like you and i might be coming into vogue right now, guy this is the three-month 10-year that everyone started focusing in on on friday and that's what broke the market's back, when it went negative. when the spread between the 3 month and 10-year went negative for the first time since '07 that warrants us to pay attention to it. this is the s&p along with the spread between the 3-month and 10-year. is that a picture perfect chart? in lock step so take your cues. when this thing stays negative, the market stays negative. if it goes further negative or just goes sideways, we're in for much lower level the in the s&p. you and i have not seen that momentum on the side of the bulls, but not for long. >> good discussion, great chart, steve. head on back to the desk and let's talk about it. paul pointed out this morning that it's not if the yield curve inverts that's a problem for equities, it's how long it stays
inverted does that worry you? >> i think people are talking about the yield curve and applied historic metrics and frankly i have no idea i think the things from today's market, you had a two-year auction, the lowest 2-year yields in a year and it's very well bid there obviously conversely the fed, maybe their next move is a cut so therefore the short end should be remain bid fed, wealth effect what are we talking about? people are starting to feel it if these guys are going to be right, they're going to be right because people will start feeling less secure about where they are and i think the market will follow. finally consumer confidence numbers at their lowest in two and a half years this is the data i care a lot more about than the charts i'm not saying steve is wrong. i did saying the s&p will move based on a function of where we are in terms of consumer household confidence and ultimately where the fed is. >> you mentioned the 2-year today. when we saw that 2-yoear auctio,
it was really good there was demand, yields went lower. what did the stock market do it sold off. that's one of the first times i've seen the stock market start to change its stripes. the whole concept has been lower for longer, there is no alternative, you have to buy stocks but all of a sudden now you've got a stock market that's a little bit concerned about lower yields that's different so to grasso's point, you have to watch these levels. i think 2722, that's the low from the beginning of march. that's right now to me where the strike on the fed put is if we get down to that level i wouldn't be surprised to see some fed talk that helps boost this market. >> guy adami, 2.42 on the 10-year yield, negative yields in germany and japan, the australian 10-year lower than ever and the s&p up 13% this year somebody i think is going to be spectacularly wrong.
>> 24% of sovereign bonds globally have negative yields. these are developed countries. i'm not suggesting we're headed there but germany clearly is so it's telling a story. the stock market seems to think correctly or incorrectly, and tim and i can go back and forth on this that somehow our federal reserve has their back it's been true for a decade but at a certain point they'll run out of bullets as well. >> that's why the sell-off on lower yields is concerning because it did happen in japan. >> where are the bullets, though the fed right now is down to 250 basis points of ammo where historically they needed more to pull the economy out of recession. and we're not in one, but eventually we will be in one people will concede it will happen eventually, and we lack the firepower to pull at least this economy out and obviously the european markets lack that ability to pull them out and
we've seen that with the ecb. >> here's the other side of all this the view is that a recession is a fait accompli, that we have to have it at some point. if you think about where we were nine months anegotiation the global economy was chugging along reasonably well until we threw trade concerns into it if you think about the other side of this, there's a global economy that was starting to recover and pick up traction who's to say that if we get global policy and we get to fiscal policy rather than monetary policy, there's a lot of bullets in fiscal policy. we're not about to go into a recession in this country. i think the stock market reflects that. >> let's step away from the federal reserve and global economies. there's a great story on cnbc.com about how technology companies have been lowering their revenue guidance at the fastest pace in six years. maybe it all comes back to earnings and maybe earnings growth is slowing down faster than we think. >> it's definitely slowing down. eps has gone negative. let's just wait to see where
guidance is. we're only a couple of weeks away from the thick of earnings season i don't think it's too much to ask to see where that guides the overall market. >> the foundation of the market should be revenue, revenue growth, earnings and earnings growth you can argue you might have earnings growth based on stock buybacks but you don't have the rest >> that's one of your favorite bands, brian, dire straits check out kb home, higher after its earnings report. we'll let you know what is driving that move coming up next. plus the ipo party just getting started this week. lyft is set to make its public debut. and former home depot ceo bob nardelli says it will leave the market celebrating. chipotle shares sizzling, on track for its best performance ever live from new york city's times square, much more "fast money" right after this
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hours. let's get more on the why with bertha coombs. >> well care is a medicaid provider and it is soaring on a report that centene has spoken to wellcare about a possible takeover it has a market cap of $11.5 billion. both stocks were down about 4% during market trading hours on the reports that the trump administration is now asking the fifth circuit court of appeals to throw out the entire affordable care act. wellcare has just taken over or bought aetna's medicare part d plans, so it does face an expansion next year once it's able to take over those plans. aetna getting rid of those plans, having been acquired by cvs. so we continue to see reported talks here within this sector and reported moves on consolidation. we have put out calls to both
companies, have not heard anything but again, according to a bloomberg report citing people familiar with the situation, the two firms have been in talks back over to you. >> all right, bertha, big move there. guys, anybody got a view or position on wellcare. >> quickly the stock has been under extreme pressure a lot of the managed health care stocks have been getting bludgeoned on everything bertha just said. you look at wcg, probably 19% earnings growth, trades at 14 times numbers. those numbers have been pretty steady it's all the noise around these stocks that have knocked them down you pretty much have a double bottom of 225. you can trade against that i think despite this move in the after market this is a stock you can own. >> plus you have head winds. you have the democrats with medicare for all you have trump with ending obamacare. and both sides agree on lowering drug prices and having health care affordability so you might see a little bit of this m & a activity trying to survive through it, but i think there are still headwinds that
will exist from both parties in d.c. >> good discussion there. now, though, to our call of the day. check out shares of nvidia they are getting a boost this after piper jaffray initiated the chip maker with an overweight rating. they cite two big markets, the price target $200. about 13% upside it has been a wild ride for nvidia investors the stock up 30% this year but down 28% over the past 12 months b.k., what do we make of this and what do we do with nvidia right now? >> second question first, you buy nvidia nvidia has worked off a lot of the inventory. not only did piper mention the automotive sector but also gaming for the second half of this year. so when you start to look at what are the growth drivers at this company come the second half of the year, up got multiple different levels. you have gaming, automotive, data center. they are exposed to so many of the different places that are growing in this slow growth economy, you've already seen the
sell-off in this thing risk/reward is great here. >> the only thing i'd say about that is part of the reason for this massive sell-off is that gpu and gaming is out in front they were in all the hot games there's a lot of competition now. the multiple on the stock is i think still open for debate. i don't dispute anything you're saying i think probably overly pushed around, probably overly kpey exuberant on the way up. >> and a $200 target, it's 38 times forward earnings. >> that to me is nvidia 2018. >> there's always a question on growth the valuation is justified for investors if you think they're going to grow 20% year on year, which they have been doing. >> nvidia always has a growth premium. at a certain point you have to say are valuations too stretched. s.e. bernstein downgraded a couple, a texan and adi as well yesterday, correct you talk about overvalued,
oversupply if you're believing that we're in a gaming world and it does feel like we're in a gaming world, nvidia will get the premium. >> it's 38 times forward earnings too rich of a valuation. >> it's always too rich but nvidia has been given a pass gaming, where apple and everybody else is having their own streaming or a gaming environment -- >> the analysts here talk a lot, guy adami, about the automotive market >> which was the story when this was a $95 stock a couple of years ago. we talked about if they can get automotive right, it's a stock that will double everything that the piper analyst said today, the bernstein analyst said the other thing yesterday and stayed negative on intel and nvidia so listen, you can have different points of view, i get it i would favor the bernstein call as opposed to the piper call. >> before we dig into that one,
you have two analysts that makes how do you play that >> you have to have a view of your own it comes down to valuation usually people are making -- they're slamming the table and saying buy because they see some inflection point in margins. i don't think you have either here so i'm hands off. coming up, kb home higher after its earnings report and adding to a 30% gain this year we'll bring you the very latest on that. in the meantime, here's what else is coming up on "fast." >> i line unicorns. >> so does bob nardelli. and as names like lyft and pinterest prepare for their ipos, he said they could unleash magic in the market. plus mcdonald's is taking ordering to the extreme. ♪ maybe not that extreme but the company did just make a huge
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get e*trade's simplified technical analysis. welcome back the ipo market is already on fire and now lyft is getting ready for, well, liftoff our bob pi sasani has the latesn this year's hottest ipo. >> good to see you no matter what you think of lyftes potential valuation, you couldn't pick a better time to go public. the most important determinant of ipo prices is the stock market itself. the s&p is up 12% this year. it's the best quarter since the third quarter of 2009. second, there's pent-up demand the ipo market has essentially
beenshut for four months third, well-known brands like lyft and levi strauss, well, they're the first ones out of the gate that's a big help. finally, the after market ipo business is hot, hot, hot. the ipo etf, this is a basket of the most 60 recent ipos, it's up 31% this year. it's the best quarter ever because we had a huge 50% plunge in old ipo names like roku, snap, docu-sign and they have all bounced back what's subject to debate is the valuation right now. reports indicated lyft intends to price shares above the targeted range of $62 to $68 let's say they try to price it at $70 that would valuethe company at above $20 billion. wait a minute, the last round of funding valued the company at $15 billion. they want a better than 30% premium just to go public? wow.
this is just the beginning if they get that valuation, what about uber the last round of funding valued the company at $78 billion let's throw in a 30% premium on that one hey, we're worth over $100 million. magic. this is how markets blow up, extreme greed and the buyers start pushing back the first ones out of the gate get the premium. let's see how this looks three months from now when 50 or 60 companies of, say, lesser quality go public. i want to see this if this keeps up we'll certainly pass that magic $96 billion mark that was the record in 2000 for ipos and has never been surpa surpassed. with more than 200 ipos set to go public this year, brian, we have a shot at breaking the old record. >> that is a heck of a year for the ipo market thank you very much. the next guest says that right now is the primetime to go public let's bring in bob nardelli,
former ceo of home depot and chrysler b chrysler why is this such a good time to go public? >> i think bob hit it. people are looking for new places to put their money where they think they can get an exponential growth there's maybe a little bit more growth as you guys were saying in the current equity market i think the window is open, and there's going to be a lot of people trying to jump through this i think levi did it right. they weren't greedy. they opened up, they got a nice lift i think bob makes a good point, where you don't want to overprice this and see a pull-back. so i would take his advice let's not be greedy on the first day. let's get out there, get some growth and get people piling on. it's a wonderful time. people are looking for new, exciting opportunities to put their money to work. >> bob, you've been ceo to a handful of companies, a number of companies, and i've never met a ceo that's negative and you
fit that mold. you're a positive guy. you look through a glass as overflowing. when you look at the ipo market, is there any part of you that feels as if people are rushing to cash out of the market? is there any top e ee -- toppin that is of concern to you? >> i think the fed probably took one too many turns in december i think yellen was a lot more cautious about having to go up and then pull back we may see that. i think you were talking a little bit about it. so i think, steve, that's a legitimate point people are concerned and they have got a nice run recovery from december. they're not going to be greedy, they're probably pulling out a little bit they may look at lyft, may look at uber, look at levi's. maybe there's more runway here we'll put our money to work an see what happens. >> let's take it from the other side then, right if i get an allocation in these ipos, it is a one-year trade, five years or get out of them as
soon as i get the shares. >> i wouldn't get out of them. i think i'd say what kind of runway you've got, how much run you can get out of it. you guys do this for a living. you're talking days, i'm looking at my watch. you guys are in and out and know what you're doing. >> does it worry you some of these companies aren't making money. the bottom line is there's so much aura attached to lyft and uber, but their balance sheets are awful, they're burning cash, and money is free. as we like to say about other companies, this doesn't happen without the fed. in a world where capital actually has a price, a lot of these companies don't come to market. >> well, steve identified appropriately, i like to think of myself as a solid businessman and i do look at that balance sheet. >> i know you do. >> so i'm probably not a typical investor in these initial ipos cash is still king i've gone through that situation where you're burning a billion dollars a month. you kind of get pretty sensitive to the balance sheet and the
need for cash for reen investme reinvestment you look at uber, that's going to be a challenge. >> they made a $3.1 million deal but i think given where we sit, the nasdaq market site, 1999, people were using all kinds of metrics to buy stocks. don't worry about making money, we have eye balls. do you worry these companies may never make money >> again, you see a lot of companies disinvesting to reinvest you mentioned earlier about buying stock back. again, i think a long-term strategic plan would be the reallocation to you either innovation or you evaporate in today's marketplace. we see a lot of that particularly in the retail businesses today what's new and exciting inside the box. so i would be really careful about capital allocation there's some companies out there that i'm familiar with that probably didn't do a very good job of capital allocation. you know, they're kind of in the ditch right now. >> bob, thank you very much.
great analysis why don't we go around the horn and say the price is high end, $68. would you be a buyer, guy? >> no. and i was a lyft driver for a day. >> great segment. >> and the next uber i'll be in will be my first but i think tim hit the nail on the head there is no path to profitability. if you don't think this resembles in some way some of the companies in 1999, you're just not paying attention. so people will get excited about uber and lyft because they have been in ubers and lyfts, not because they understand how they're going make money in the foreseeable future. >> i say this about lyft first of all, they are first out of the gates this is a tactical call. this is not a big deal on a relative size in terms of the overall amount of stock coming to market. you're going to see free float here which will be 10% to 15%. the reality is that there are people looking for some of these names. if you look at the retail sector that's outperforming, there's an
etf that does a good job tracking that. they're new companies, they're the new economy and people wanting to own this. they're looking at price to sales rather than pe. >> so the real question is, it's three months down the road these companies will probably get a bid but when the junkier ones come out does that tip it over on this if i got an allocation, i'd probably be a buyer but i'd probably flip it. >> so you wouldn't be an investor, you'd be a trader. >> yes. >> steve. >> i think it's going to be supply an demand people are starving for these type of deals. if lyft and uber catch that bid action even the ones that people don't want, they'll reach for those too. it depends on whatever the last ipo's performance was out of the gates, if it prices at a premium and holds price for a week out -- >> you heard bob's piece, the renaissance capital ipo, 60 stocks in a basket, better quarter ever. >> there's an undersupply of
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welcome back a huge mover today, bed, bath and beyond soaring almost 22%. a trio of activist investors launching a fight to replace bed, bath and beyond's entire board of directors not one or two directors, the entire board legion partners, macellum saying bed, bath and beyond has lost touch with modern retail the move prompting raymond james to upgrade bbby to a strong buy, saying it could be a takeout target. >> i think it's a 35% short interest now, i'll say this and people will say -- valuation is extraordinarily reasonable but this stock has been in a
five-year bear market. so what's the point? the point is if they can get something right and force the shorts to cover, which might happen, this still might be upside in this stock i don't think the business model is great but you could have a short squeeze that takes it up 10% or 15%. >> i'm not sure what these guys expect if we continue the motley crue reference, she's got the looks to kill here why do i need to go into that store to do anything, to buy mye scented candles, my potpourri. >> i get the 20% coupon so i'm buying a lot of potpourri but i'm not buying the stock maybe you get some kind of a short squeeze, that's fantastic. >> it's just a discounting model. it's all coupon related. what are they hoping for so maybe sales have troughed, but margins still getting compressed i don't think they know what they want to be and i don't think the activists know where it could get to.
>> even if you had a whole new board? >> i don't know what you're looking for. >> the stock got 22% after hours. from home retailers to home builders kb home higher after its earnings report. diana olick joins us now live from d.c. >> brian, a bit of a mixed bag revenue and new orders down, but kb continues to grow communities and is offering smaller floor plans at a lower price also it outperformed in california, which is incredibly tough right now. kb's average selling price is down 5% to $370,900. ceo jeff metzger said although the decline in net orders during the 2018 fourth quarter impacted our first-quarter housing revenues, we are encouraged by improving market conditions, which we believe should enable us to generate stronger revenues in the 2019 second half. on the analyst call he said wassy look at the health of the u.s. economy it remains on solid footing and are looking to
improve affordability. >> home prices have moderated recently, and interest rates have eased back down, improving affordability. last week's announcement from the federal reserve signaling the likelihood of no further rate increases this year should also help to sustain the favorable macro environment. >> kb's first quarter was december to february rates last peaked in november with the 30-year fixed just over 5% and then began falling in december we did see a big run-up in the stock at the start of this year. part of that as mortgage rates dropped and part of it is what's known as the hope trade. that's when investors rush into the home builders stocks ahead of the spring season in the hopes that strong sales will boost the stock even more. brian. >> diana, thank you very much. even before reporting today, kb home stock had surged along with a lot of the other home builders lennar and kb home along the best performing names, along with d.l. horton and toll
brothers, up double digits is this more good news or simply awe reflection of bond yields and thus mortgage rates likely continuing to fall. >> the lumber costs, home affordability were the headwinds. trying to look for workers so there was a host of reasons why the home builder segment didn't work. now i'm starting to think this is over with obviously you see year-to-date performance. i'm still long lennar. i think that you're starting to see a switch and there's still tremendous opportunities in the builders. >> it's interesting. this might be a catch-up trade look at what's going on with the iyr that's the etf they have been on fire they pay a 3% dividend yield but it's also real estate so you can bucket into that same thing. if you get a breakout and peep start to get excited about the fact kb is telling you things are looking a little bit better,
it's probably not a bad buy here. >> what i can understand is how you can be bullish in housing on a world where you are quite negative on the market and quite negative on the economy. ultimately it gets to a place where the housing market will not do well where gdp is slowing, people are possibly losing jobs. >> i hear you're saying but the builders didn't do well when things are even better i don't believe that the consumer in america is bad >> and we still have a housing shortage in many places there is no homes available. >> i mean it's -- >> the average price of a kb home home fell 5% probably because they're shrinking their footprint. >> or because demand is falling. why do you cut prices if you have demand? >> a lot of that is reflection of the geographic movement if you're building in l.a. versus, you know, birmingham, alabama, prices fall naturally
due to geographic shift. >> i actually was in birmingham, alabama, once. >> u.p.s.? >> buy a house >> no, and no. >> that's where your lyft passenger was. >> this is the quarter where you get the rally. i think next quarter is the kwr that's going to be tremendous headwinds because to tim's point, i don't think the economy is in that great of shape and i think it will manifest itself next quarter. >> kb home one to watch tomorrow. are you looking for fast money? of course you're watching it, but check out these fast food restaurants heating up all year. are the gains already in the bag or are we just getting cooking we'll discuss it next. as always, live from the nasdaq market site, stick aunrod. cal: we saved our money and now, we get to spend it - our way.
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another big story today, mcdonald's doubling down on technology bits not burgers, with a $300 million buyout of startup dynamic yield. it is mcdonald's largest deal in 20 years now, who is dynamic yield? they specialize in personalization technology, which mcdonald's hopes will help modernize its drive-through services by having digital menus that will adjust to each location on store traffic, weather and other factors. also suggesting maybe meals that
you would like that move giving mcdonald's a boost today, but it is trailing the other fast food giants this year, only up 5% chipotle up 60%, on track for its best quarter ever. starbucks up 13% and trading at an all-time high so is this mcdonald's tech bet enough, guy adami, to heat up the stock? >> i don't know, in terms of valuation it might be getting a little ahead of itself we all like to think mcdonald's across the board but at 22.5, 23 times forward earnings, is it worth the price of the ticket? i would say you're bumping up against levels we have a great chart here you go back to the pre-december high, that's the left side of your m then you have the rollover and then watch and you get the middle now are you going to make the third part of the m. >> that's a terrible-looking m, by the way i don't know if you were not drawing well in school not great penmanship. >> the mcdonald's formation is
bearish, b.k it's like that hoof and mouth disease. >> that's bearish too? >> yeah. >> i see the golden arcs, not the golden aurches. i think you can get a breakout on this. with other fast foods when they embrace technology, everybody who's done that has seen an increase in sales. >> this is a little different. that chart is one to make you grimace, i will admit that >> oh, wow that's fantastic. >> sold it. >> well done well done. >> but here's the thing, what they're hoping for, this is not menu invags. if you like this, maybe you'll like that. is it going to drive sales are people going to order more an different things because the menu is different? >> i think so, but restaurants have been doing this for a long time mrs. field's used to put out cookies in the mall when their sales were down. you'd come sniff it and you'd go over i've been caught there once or twice, but it works.
>> mr. field's now >> the bottom line here -- anyway do we have time here the bottom line, mayor mccheese is they have to do better than that but their operating margins are improving. the kiosk service has drawn new customers back the whole grass-fed beef guy, whatever it is you eat, that's also been important the name. coming up, the regional banks have been getting wrecked. one trader just making a $4 million bet on more downside we'll break down the trade stick around
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we've got a big news alert on apple and qualcomm. josh lipton is in san francisco with that. josh. >> so, brian, this is more news on the apple/qualcomm brawl here there are two cases before the international trade commission one of them just now, the itc shot down a patent infringe ment claim from qualcomm saying it is yen valid. that mean the itc terminates the investigation and the agency doesn't have to rule on an import pan of iphones. that's something qualcomm wanted so a victory for apple a decision that comes on the same day as another itc case, so this is a separate one, where a trade judge there did decide apple infringed a different qualcomm patent. that judge recommended an import ban of iphones, didn't specify which ones the full itc commission has to review that case as well so no
done deal. on that second case we expect a ruling june 26th. >> guy adami, trade this >> i would go qualcomm with their balance sheet and their evaluation, maybe it makes sense. maybe it can catch up to some of these other chip names apple obviously sold off on the back of this, it's probably rallying in the after market now. but we talked about apple last night. so if your asking for a trade, if there's any weakness in qualcomm on the back of this, i think you buy this. let's turn our attention to the regional banks they were higher today after getting crushed over the past month, but one options trader just made a big bet the sell-off will continue. let's go mike khouw out in san diego with the details on this hey, good to see you, mike. >> hey there, how are you? so kre, the regional bank etf saw seven times it's daily put volume a trader was kwobuying the june
48/42 put spread spending $4 in premium to make a bearish bet. this same trader made a bearish bet last week. they bet $4 million last week, took profits of $5.7 million today. they made a good bet last week we'll see if this turns out also >> mike, thank you very much b.k. >> this is the epicenter for the yield curve, right these particular names the one thing i would say, as we go lower, you need to be concerned the fed will say something about ways they might steepen the curve. for a short-term trade, i don't mind this at all. ecouthshone options acti, chk t e ow fridays at 5:30 eastern time. your final trades are next see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step
all right. it's time for the final trade. let's go around the horn tim seymour. >> eog is certainly one of the best in the space, like energy. >> b.k. >> oil is going higher, you might want to look at the gold miners, gdx. i like that one. >> steve grasso. >> mcdonald's. i see what guy is talking about about running into resistance here, but i think at this point if we break through that resistance, i do see 200, 210 as a price target. >> wow bullish view there guy adami. >> yeoman's work 11 hours you'll be back on -- 11 hours. >> that's crazy. >> from now you'll be back i encourage everyone to tune in, i know i do religiously.
>> well, we now have a phone segment with guy adami at 5:00 a.m. >> eli lilly continues to make all-time highs on fire. >> that does it for "fast money see you tomorrow night "mad money" with none other than jim cramer is on now. >> my mission is simple, to make you money. i'm here to level the playing field for all investors. i promise to help you find it. "mad money" starts now. >> hey, i'm cramer welcome to cramerica i'm just trying to make you money. call me at 800-743-cnbc or tweet me @jimcramer. we start strong today, 141 points u