Skip to main content

tv   Fast Money  CNBC  May 4, 2017 5:00pm-6:01pm EDT

5:00 pm
you have netflix and broadband and you bundle things together. >> tomorrow morning, the jobs report. you want to see it bounce back. i think ten year sales are going up on a reaction. if that happens, it's net positive for market. >> michael thank you as always, that does it for closing bell. and "fast money" starts right now. >> fast money starts right now overlooking new york city's time scare, pete najerian, time seymour, david see berg and guy adami. a bold new call, jason says marco kolanovic says the market doesn't have built in a catalyst. oil is falling to its lowest levels to november 30th. a top technician has three names on the sector he says are a screaming buy right now. he'll reveal them.
5:01 pm
later the analyst is here to make a bold case on why they will go as high as $500 a share. will you not want to miss. that first we start off with breaking news. this hour to repeal obamacare. hi, elon. >> reporter: hi, mellissa. the president says the vote in the house for obamacare was a sign of unity and show they can get things done and tax reform is coming up next. >> we're going to get this finished. then we are going. as you know, we put our tax plan in. it's a massive tax cut. the biggest tax cut in the history of our country. i used to say the biggest since ronald reagan. now, it's bigger than that. also, pure tax reform. so we will get that done next. this really helps him. >> before we can get to all that, there are still a lot of pieces that need to fall in place t. senate needs 51 votes to pass through the upper
5:02 pm
chamber using a process known as reconciliation. the bill that's expected to undergo major changes along the way. majority leader mitch mcconnell said the status quo is unacceptable, but an aid said he won't bring this bill up for consideration until we get a cbo score that offers a little more clarity on exactly how much this bill is going to cost. meanwhile, another republican senator, lindsey graham of south carolina put out this tweet saying he was worried the house process was rushed and he urged caution on this bill going forward. so, melissa, republicans today are taking a victory lap, but there is still a lot of work to be done. >> sure s.ylan, thank you. now the first steps have been taken to repeal obamacare and the vote is headed to the senate, does this mean the tax reform could be closer than we think? why did stocks react practically at all today, guy? >> amazingly, we have been here a couple weeks. the vix is still below 11.
5:03 pm
there doesn't seem to be a lot of fear out there. to answer your original question, yeah, i think we are a little closer. i do think when this gets to the senate, it will be dead on arrival. we have a lot of work to be done. it gets people excited. gets you the financials, which pete has talked about and tim did a segment a couple weeks ago, where they actually talked about 23 the xl being support. i encourage you to go back and look where it's stopped. i encourage you to go where j.p. morgan stopped. we said collectively. it stopped dead at 84 t. financials are saying, i think, that maybe something does. >> they definitely look at the yield curve, too. you had yields which got down to 2 ferrari, 223, broke t levels. can you make an argument that the global growth dynamic, which at least should put strength in the bond market is happening. also, we went from way oversold to way overbought, also in terms of the concept of what these
5:04 pm
guys can get done. your question, mem, is why isn't the market responding? are you kidding me, why wouldn't we respond? i think the hyperbole we get from these deals, there is no faundation saying it is going through. >> i think it's a crazy question to ask, why didn't the markets respond, every single time an administration guy says the words tax reform, we have responded in the past. which then leads me to think maybe by now the market participants are inured. nothing happens until it happens. >> no, because they don't believe it's going to happen. let's see the o score is going to be a disaster. >> you think this is dead, dead, dead on tax reform? >> again, positioning is important. look at the way the stocks reacted. if people believe this was going to get pushed through the stocks would have been destroyed. there is no chance this gets to it. it actually does push out tax reform to 2018. it is a problem. >> that is my biggest issue here.
5:05 pm
i said it clearly, i have been bullish in general. we said take your foot off the gas, be careful, people may see donald trump in the newspaper with his hands in the air, we got this through. eighth point on the board, it's not a full point. >> you sound like it gets mired in reworking this bill. it doesn't pass and it gets even more, or it's dead, dead, dead on arrival. >> until money comes? >> it's dead, dead, dead on arrival and tax reform comes forward. >> it's an issue. >> we need a better scenario. >> i'd love to see that happen. io enthis is dead, dead, dead, i think this stands out there. i tell you what impressed me today is the care providers, did you see humana? 52-week highs. this is a name i argued about on the pitch, not too many weeks ago, talking about what these guys are doing. how their earnings are shaping umm. the plans as they move away from obama kir. i tell you what, when you look at the markets, you say the
5:06 pm
markets hasn't done a whole lot. how about the pressure from energy, pulling, pulling, pulling. yet, here we are virtually on highs, because of the financials, because of many of the industrials and technologies, how well they are performing. >> it's a fun flow. it's important to keep that in mind. they have been indicated by the retail investor. they have been driving the market up. in general, about optimism for the trump inflation trade. people will wake up tomorrow and see donald trump checking the box. think it's positive when, in fact, we are discussing on the show right now a delay in tax refo reform. >> all the sharp pencils are looking at this tape and say we know what is going to occur. what is pushed out. >> isn't that a positive? i don't expect anything to get done here. i'm impressed by the price action that tells me passive flows are possibly supporting it. pete brings up oil, one of the
5:07 pm
reasons why oil is not taking the market down, first of all, people are not implicateing the banks or imputeing this as a credit move. they are calling it an oil-related move and energy is a small percentage of the indices. that's why it's not moving stuff around. >> it's seemingly, the french elections are over. they do happen this sunday. now it seems to be a foregone conclusion that le pen is going to lose. >> yeah. >> i'm not so certain anymore where we live today. they had a very interesting debate by the way. >> it's another pile of uncertainty on top of -- >> i think that election hangs, not that i'm some french election expert, it seemingly hangs in the balance. >> although, you do speak french fluidly in the green room. >> bon jour. >> the one pushback -- i'd have for you dave is how about a fundamental story of what we we heard so far?
5:08 pm
the banks. those are almost spectacular all the way across the board. many industrials, pretty phenomenal. now we got technology, these numbers have been very, very strong. a lot of beats. so i think that there are fundamental facts out there that we can lean on to say why the market is where it is. >> my only plan, i don't see the markt market crashing. i don't see the impetuser it to go higher. i think you will find other better levels to find stocks. >> let's look at the introduction of wall street. oyou are next guest back in february. the s&p 500 is hitting 400. you would have made a lot of.. the s&p 500 gained 5%. he now says 2500 could very well be in the card. why and what will take us there? marco joins us with his predictions. what is it going to be for 2500? >> well, i think you need a tax reform for 2500. so basically, we are saying the
5:09 pm
risk or balance here actually. on the positive side. have you this promise of tax reform that could add certain amount of dollars to dps. we think about $10. >> that happens the market will reprice higher. on the other hand, you have negatives as well. have you this weak season in front of us to sort of may go forward typical at times, could be a season marred by equity outposts. for 25 humpblths we do want to see some stories. >> we saw the vix was very low, in fact, it went below ten, ten years s. that a positive that allows you to stay in the market or is that a nelgstive in that it draw -- negative in that it draws in equities for outside response if there is some sort of sell-off? >> so historically, it was actually positive. a low volatility means a low volatility. it tends to be more sort of smooth sailing. right now, i'm not 100% sure because it's really low.
5:10 pm
we do see quite a bit of an increase in to these strategies. i think if you do have a cataly catalyst, something unexpected. you could prompt people to go short or high. if it's positive, i wouldn't look at it as positive. >> in terms of the low level. >> correct. we are in uncharted territory. we still have a strong support to from central banks. large inflows. on the other side, sort of a volatility is extremely low. it seems to be a bit of a disconnect sort of in the market, in the geopolitics. the catalyst, seasonalities. so we are a little bit kind of taking a pulse here, not taking low volatility. >> it could be a negative. you said 2700 if we get tax. what if we don't? >> so if we don't get tax t. good news is earnings are
5:11 pm
relatively strong. so we are looking at 128, $129. so if we don't have a tax market could say here. what i'm a little bit more worried, you know, if we have a weak season and let's look at the pair of number tomorrow. if the markets, they have keep on sort of weakening, the fed still pushes forward with hikes. i think that could spook the market. you could have a sell-off. >> that could trigger de levering. >> the normalization for the feds? >> exactly, right in europe and japan we have balance sheet expansion, in u.s., basically the tightening comes through hikes. so both of those effectively remove the stimulus. i say they have a similar impact. >> two historic indicators, commodities, copper and crude oil both trading miserably. we can argue why, when do they matter in your ewhatition?
5:12 pm
>> so coverlation between oil and equities is positive so i myself am a little surprised why the market is not reacting is clearly sort of not looking at those as indicators of global growth but rather commodities situation. there is some increase in china. it's sort of just starting to happen. we will monitor that in addition to the others i mentioned. >> marco, thanks, for coming by. always 22ed to see you. how do we state? >> i think the reality, not oil, volatility, even where it is right now as low as it is, it is relatively high to the movement in the marketplace, believe it or not. it trades at such a narrow band right now to the last couple of weeks. if you look at where we are trading. we should be tiradoing at 7 or 8. i don't care about that. i think there is enough political risk out there and so forth that i think you'd want to own volatility right now, to have that protection, so you could stay in the market in case we hit that 2500 number he was
5:13 pm
just discussing. >> yeah, i think that said the greatest fear right now on investor's minds is the risk for an upsides market inflating higher. that's the biggest concern right now. so look, it has to be a catalyst. the catalyst on the positive side needs to be tax reform. until that occurs, i don't see it hang. i don't see a lot of downside risks. i see upside risks. >> it sounds like the only fear is fear, itself, someone said. >> look at europe look at the dax the euro stocks are up 150 basis points the dow is rallying against everything other than the euro. you should say no to that. >> do you think equities should follow the commodities? >> i hate to use the term de couple. to marco's point, i think equities are headed one point, for fleetly different reasons. tim mentioned the dax, i think it closed at an all time high, that level was critical.
5:14 pm
we get close above it today, worth watching. coming up, energy stocks the worst performing sector of the day and the year. a top technician has three screaming names that say buy. shake shack, shareholders getting burned, down about 10% t. ceo pointed to one of the lamest excuses in the book. we will tell you what that was. later, shares of tesla's thinking, adam jonas says the stock was going to $300 bucks says it could get $500 bucks. he'll be here shortly. "fast money" is back right after this. you always pay
5:15 pm
5:16 pm
your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7. call for a free quote today. liberty stands with you™ liberty mutual insurance hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about.
5:17 pm
what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. >> welcome back to "fast money". we have an earnings reward on shake shack. it's down more than 10%. >> we were down 13% in after hours. a big shock following sales at shake shack. so you wonder, is this still a cult brand? well as a result of a negative forecasting flat sales for the rest of this year. shake shack says they are clearly dissatisfied with the first quarter sales decline, blaming the bad weather, the holiday shift in march, also a
5:18 pm
tough compare to last year when they successfully launched the chicken shack, they called this still ongoing at this point. they said all they've unravelled in the back half of march going into march. they said same sale stores were you are 2%, believe it or not and you have to throw in higher labor costs because a lot move states raised the minimum wage, hence, at the start of year they had to do the same and raise shackplace prices believe it or not. on average, 6%, mobile is a bright spot, launching their mobile order and pay gearing umm for 2017 with promotions, including give aways of 90,000 burgers and shacks in february. they said 500,000 of burger revenue was unrecognized on earnings that impacted first quarter numbers. shake shack says the app has been downloaded 200 times since the launch. they hope to go more nationwide first quarter, as you say, with
5:19 pm
the stuff priced to perfection at 60 sometimes earnings, you have to show the numbers for the first quarter, it looks like things are disappointing. back to you. >> thank you, shake shack feeling the pain, despite having a product that people really love, similar to the gopro story, great product, bad stock. >> it probably is, the one difference i'd say, how about when she mentioned the one important thing of that segment. it's multiple. trading at 60 times, when have you negative food traffic. you have a multiple like that you talk about target compression raising minimum wage, all the varies effects facing them, shake shack is the cult here. when i say here, i mean in new york where it started. right? when you bring that to the mid-tweft west, they're looking at a $5 and $6 hamburger. there is a lot more competition. there is a brand out there.
5:20 pm
all kind of competition out there. >> nice. >> because of that, it's very, very difficult competition and they bring up mobile. their mobile is far behind mcdonald's and some of the rest of them that have been pushing in that regard. >> i think this was a classic hump and dump. we talk about this when he was $70. the way they valued. >> who is they, though? >> it sound like something bad is going on. >> when they were talking about comps and going forward in growth, they were talking about investments and store option, they started off at madison square park and new york city and moved to chicago. >> the management is buying the multiwel, right? >> it's a very high traffic, high area in new york city. chicago, las vegas. it's what everybody knows. iowa street traffic is not man hat tan. your consumers will have growth. >> you are investing with a
5:21 pm
declining marketable. it's not going to be there. there is no reason this stock should be. >> this is mentioned 60 times the multiple. cng. what's the multiple? 140 something? would you rather? >> what would i rather? >> cng all day. and twice on sunday. >> you have a place here, too, it's not fine kind of the specialty burger space. are you at a place where there is five guys, whatever guys are eating burgers. >> when is the taste test? >> the multiple is unsustainable. look at what's outperforming? mcdonald's. >> across the board, nobody likes the shake shack. >> as a burger. >> love the product. >> by the way, quickly, it's been either side of january 16. it's headed toward low- to mid-20s. >> all right. still ahead, cvs, volatile in
5:22 pm
after hour session. we will hear from the ceo later this hour. you are watching "fast money". in the meantime, here's what sells coming up on "fast." >> this is proof. this is what they did today. but there are three oil stocks that may have just touched the bottom. we'll give you the names. plus the man that says e said tesla would hit $300 is back with a bolder call on the stock. he will reveal what that is when "fast money" returns. and markets continue to rise and fall... predictable is one thing you need in retirement to help protect what you've earned and ensure it lasts. introducing brighthouse financial. a new company established by metlife to specialize in annuities & life insurance. talk to your advisor about a brighter financial future.
5:23 pm
5:24 pm
[ music playing ]
5:25 pm
5:26 pm
5:27 pm
. >> welcome back to fast moisture. we are live at the nasdaq markets. cbs out with earnings in the post-market. >> that stock slightly higher. we will hear from the ceo and
5:28 pm
later tesla shares sank 5%. fear not. the analyst called for the stock to hit 300 is back. he says the run is far from over. first, oil having it's worst day since november 30th of last yoomplt get a break down on the move, a man whose spirit never gets crushed. dom chu. hi, dom. >> it will take more than a crude crush to get me down. just like when traders realized supply and demand dynamics aren't favorable for higher prices. this week we saw u.s. government numbers that showed a smaller than expected draw in u.s. oil inventories and got softer demand for gasoline numbers. no surprise the bearish action oil prices filtered into the oil stocks as well t. s&p oil sector was the worst performer in the large index by a wide margin and the vast majority of the day's
5:29 pm
biggers laggers were oil and gas related overall by exploration and production stocks, like chesapeake energy, marathon oil, murphy oil, amongst others. around half of all members of the energy sector can be characterized as being in bear market territory or at least 20% the recent 52-week highs. even then, energy stocks still pretty expensive on a valuation bafgs the sector as a whole traded 28 times forward earnings and 33 times last 12-month earnings and still it's also the worst performing sector so far this year. today didn't help, back over to you guys. >> thank you, dom chu back at headquarters. so let's talk about it. is it time to actually go in and think they can pick up a bargain in this sector, guy? >> well, exxonmobile has been trading in such a way that says crude is going krntsly lower than we traded radio it now f. you see it traded down precipitously in december, we are right back to that 35 level
5:30 pm
in the obx. i think it's telling you crude wants to go lower. exxonmobile has been telling you that a while. i'm not pretending. i think timothys he's right. it's hard to buy these stocks if crude will put up a 35. >> to me oil is going lower, saudis are shooting themselves in the foot. they are exporting more since the opec. they have knocked down enough they need to double enough. basically, they say these guys need to double where they are right now. >> is that not a possibility on may 25th? >> it is a possibility. if you look at the chart which i prefer to do, it's the brand. it's now well over the 200. for those of you that follow these, it's a relative strength indicator. >> that means it's as low as it has been since january 20th of last year when it bottomed. so sentiment, positioning, very poor. >> i think she hit the nail on the head, she said may 25th.
5:31 pm
that's the actual data point. it's a no touch zone until we get more information. you can't step in. agree they're going lower, you have to wait and see. >> i agree you don't buy the stocks, you talk about obx and oil volatility low, lower, i actually got call positions, i wasn't kmi the stocks for a long period of time, it went from about 16 to 22, i got out of it. i own calls to the upside, just in case that upside. today, chesapeake, a huge call buying in there as well. so there are ways to play this with the lower volatility to give you an opportunity, if there is a turn any time between now and then. our next guest says despite the crude crushed, there are three energy stocks you should buy. time to go off the charts with rich ross, what are you seeing? >> look in philadelphia, it's for $50. unfortunately, it's worth 45, 53. now that's a part of the problem here. i'm going to keen it simple. the chart of crude looks bad,
5:32 pm
but you know what, it's looked bad before it's rallied. it looks bad here, while admittedly, it's not a ringing endorsement, we do as them alluded to, have the oversold condition. when we go across asset questions and around the world, we see the tech my also are in outstanding position tangential to crude success. let's see where there might be opportunity. as we go through, we see it, contra resources reported numbers, i am told it was a great quarter. the thing that jumps out, it's a normal lookingstock stock chart. you are actually up around the high end of that range. i think in a slightly better take, you get a breakout from a multiyear trading range. that's almost an olympic type effort. now, going forward, we see there is another name, royal, dutch, shell, integrated a. nice symmetrical triangle, stocks down in the low single digits. which is a herculean effort for
5:33 pm
an energy company. now we will trade in the brake from the pattern. this company is taking a balance sheet pledge if you will to keep things clean. i think you can see an upside break in an energy stock. finally with le look at a refineer, valero. the refiners have been sort of best in class. admittedly, it's like fourth period if gym. you see the 150-day moving average. that's where that rising trend line creates that big support here. so once again, counter trend move, a key support. i think this is a name that can bounce off that support. i think i was screaming when i said to buy them. but there are three names in this base that can work. >> i think rich comes over. >> he is coming over. >> come over, rich. >> in philadelphia, it's $50 bucks. i'm giving you $50 bucks. >> i wish i had the knowledge to answer that question followed by
5:34 pm
-- >> that was joe diddly by the way in a pond shop in a movie trade. my man is getting it done right there. >> i have a question for rich ross this is a question we asked for a particular stock. it's not just crude oil, all of them basically five month lows, should equities follow in your view. >> i think you make a great point here, in theory, in this world we have lived in, yes, they should t. fact that they did not. the fact that volatility went down, the s&p went higher. transports were higher, we go back if time, 18 months, two years, it's a totally different tape. to answer your question, yes, that i should go down. but they're not. because they're not, you want to remain constructive of stocks. you go around the world t. u.s., s&p up 6.5, '. europe up 10%. emerging markets about crude and copper up 14%. it's telling you there is
5:35 pm
something else going on here besides the action in crude. now, i would be overly optimistic to suggest if crude continues to decline and metals melt down, volt tilt volatility going to pick up, crude is going to stabilize and stocks will continue to do what stocks are doing. >> valero, you made a point on a technical basis. you look at the quarter the margins continue to contract. everything seems to be working against them. i know it's all technic also. at what point do you peek your head around the corner? >> you sit on key technical support. you start to leak below there, it brings into question the potential for not a counter trend move but a reversal to the down side. >> i was pointing out why it is selling off. i would be looking at the offense here, crude has given nine times to trade these movers, where conditions have gotten oversold, the earnings means the energy stocks missed were destroyed, look at anna
5:36 pm
darko, it's off thursday% of the highs, it's more of a value story. that's something i want to buy. >> i have a look at royal dutch shell. the dividend yield is 20%. should i be thrilled i am getting paid to be in the stock, h or should i be worried a sto jump is about to come? >> 7.5% dividend yield. if you take a play, or a bet, that's what i'd jump on to. it's a fine company. >> you got to be careful buying just because of that. >> no, absolutely. technical supportive. and so does -- >> if it was bp who has the precedent of breaking the dividend, you don't buyt for that yield. royal dutch shelby the way if euro, this is the story t. european integrated. but the most interesting year because of the euro strength. they're the ones punished when it was so weak. >> all right. rich, you nailed it. >> all right. thank you. >> say it like you are
5:37 pm
surprised. he's the very strong one. >> i know. >> thank you. it's not easy. >> all right. still ahead, the man that correctly said back in january, brought shares back with an even bolder call. morgan stanley will be here to tell us how high the stocks go. tweeting court cutting intensifies. but there is one name in the group that traders say could emerge as a big winner. we'll tell you what it is. you are watching "fast money" on cnbc. first in business world wide.
5:38 pm
5:39 pm
5:40 pm
welcome back to "fast money". shares of cbs getting a boost after a share of wereings today. julia boorstin joins us today. >> reporter: they are striking an optimistic note despite cord cutting they are bullish on business saying new deals with skinny bundles and over the top streaming services will be a contributor to cbs' revenue. >> for any bundle to be truly
5:41 pm
successful, it must have cbs. we are not being affected in anyway by any changes in subscription numbers thought you the industry. >> nunez announcing for the first time they'll offer the company's two over the top services. it is a combientd package, they're ahead of schedule to top 8 million subscribers. nunez says they expect to do well. he also made a joke about how confident he is. >> it's going to be much better than last year. we had a very solid year last year. so you know, i know i'm mr. broadcast and i'm the cheerleader, but i got to tell you, i have been right -- i sound like donald trump i have been right. i have been wrong, you know in terms of those things that are going on. zblf this optimism is in contrast to the ad weakness we saw at vi a com and time warner
5:42 pm
turner over the last few days. he falls that the pay tv business had its worst quarter ever, even when counting for growth and skin my bundles. we will see what we hear from disney, fox and discovery him all three report next week. >> was he asked directly about that report that was so widely reported and had an impact on the sector yesterday. >> >> there were a couple questions about cord cutting. even before they got to the x & a session, it was clear he believes these skin my bundles will be a cre do to cbs' bottom line. even if they haveship shifting to skin my bundles, it was different than we we heard from i have viacom. a number of analysts were frustrated he wouldn't give specific subscribers numbers, he was generically for both of them
5:43 pm
very bullish. >> thank you. it's clear the media stocks are being interrupted with new technology' as more skin my viewers have more bundles, the media is having a retail moment? what do you think? >> obviously, this is about a year-and-a-half ago. ultimately, we are in a place, look at viacom, people went after the perceived weakest plays. there was some commentary in the ranks that some distributors and losses were greater in the regional areas. so they're pushing around those names. but is this a time to say actually these guys will be put out of business. few look at over the top is 13, 14% growth year over year, that's fine. if you look at the value plays within the media space. cbs is certainly one of them. that's how you shop here. >> huh will you, amazon,
5:44 pm
netflix, they aren't the amazon, but the amazon to the retailers? >> well, i this i they're affecting them. i don't think they are killing them. >> i don't think they slaughter them, to tim's point earlier saying as well there is pressure on them, no doubt about it. >> yes. >> but there are other ways, when you look at disney, they're a multifaceted type of -- when you look at the different streams of how they generate their money. disney, it's not teflon. it's off the 52-week highs. >> i think disney is the one to own. as far as the value space, i'm not stepping into cbs at these levels. disney, i think the understanding about the woes, it's understood, it's in the stock. i think the movie slate is off the chart. that's a name can you buy and own the money will gravitate there. the institution alimony looking for a player that will accelerate is business. >> is it convincing to you unless nunez confesses over the top, people see the content
5:45 pm
through other services that is actually acredited to them? >> yes, he said over the top will have to have nbc, abc, it will have to have a lot. so he's talked to the school. tim mentioned viacom beat earnings. >> the guidance was fine. >> and the stock unchanged after being eviscerated i would be like you are nuts. it should be off five or six percent. netflix all time high today. >> i was thinking about it. to me the move was going after a weaker player. this is a 20% move, 20% with a turn around, if you talk to people at viacom, they are fired up. i think they are content traiting on core branz, they should. >> speaking about media, the options market is implying big moves. we have mike the break down the action. >> sure, look at the biggest ones reporting, disney is
5:46 pm
expecting a mover of '.6%. fox a move of 4.9 performance. discovery communications, a move of 5.7 performance. despite the fact the market is not volatile, all of those moves, where we saw unusual activity was if fox. even though there is some more time to trade these, 6800 july 30 calls for about a dollar. at a tax relief that will rise more than that implied move. the above $31 by july expiration, we are up 7.5% in 11 weeks. i think if you make that bet, this is the place to make it. the stock is trading maybe 13.9 times forward earnings. so if there is some leverage, that might be the place to play for it. >> mike. thanks. for more "options action," check out the full show tomorrow. 5:30 eastern time on cnbc. coming up next the man that approved tesla is back. they called for the auto maker
5:47 pm
to cross above $300 and has a bolder prediction to layout the bold case when "fast money" returns.
5:48 pm
5:49 pm
5:50 pm
. welcome back to "fast money". tesla shares sinking 5% today following disappointing earnings. >> that doesn't deter our next guest, if january predicted it could rise above 300 bucks per share. he says it can go higher. he is the head of auto research at morgan stanley and joins us now. before we get to the full case, i want to start off with a decline here, is it because the confusion between the s and the 3 which seems like a strange thing, if people were buying the 3 thinking it was a watered down s, that means usually some of those three says e reservations will never come through presumably. >> i think the reason thing to is down, personally, what drove it up so much? right? there was not much increment ally new during the call and kind of the point of your question, a lot of details of the call were kind of in the
5:51 pm
minutia about reservation and a line out of balance. they continue to burn cash again and spending even more money. so if you were already short the stock, we don't think there was much on that call that made you reconsider your short' and for a stock that ran so much so fast, you know, it was due to take a break. >> the flipside of it, though, if you were running long the stock, was there much on the call to make you even more convicted about that position? >> no, but there was nothing necessarily at the margin to get you that much nervous either. we think the investors on the long and short side can view tesla other than a car company. we think the events the next six or four months will make a lot of sense. we don't think the competition with all due respect with car makers. as that cap gets longer and ambition and technological domains get broader, they're kind of getting into the territory the apple and thele that bet out there and that
5:52 pm
could be a problem over time. >> right. the foundation of your bullish pieces on tesla for a while has been that it's going to be a global transportation company, it will revolutionize transportation. walk us through that to 500. >> a lot is frankly just the market they are playing in, the ballpark they are playing in. few are a car company, your market is $1.5 trillion. if you are tackling mobility, ten, trillion at a dollar a mile, that's 13% of global gdp, that's before factoring in the 600 become hours that drivers and passengers spend if cars the value of the hours of each hour. these are whole numbers. it's an adjustable market. >> i respect, it's a difficult place for you to be in. not an analyst where you say the sub text of your note points out it's ten times the market you consider mobility data. so we're so focused on the
5:53 pm
deliveries on the 357bd the s. >> what are you talking act has nothing to do with that. it's a funding strategy. >> you are both right. so it's a stepping stone. we don't want to underplay how important the model 13 for determining whether this company can be self financing. if they can deliver a half price or a third of a price model s that can have an insane level of performance and have a range of 250 miles or so this is, and a level of safety perhaps 10 x you get in a german sedan, that can be a game changer an enable that. with it, we brought in our note is, there is risk as well. there is rick if you play in the megacaps that have access to unlimited caps and they can compete with itself. >> the question is, can they continue to go at the 3 and the y, building up four more
5:54 pm
gigafactories, building out their store chain, right the super charger network and burn that cash on the way to being that mobility company. >> that is going to be a case of their cash consumption and openness of capital market. so far the latter of those two, absolutely critical to getting this company to where it is. they worked that open the capital market. perhaps the ability to dream. yes. they've worked that beautifully. you can't take that for granted. sought some point we need to think of those markets not being opened. what do we do then? >> the base case is 305 the stock is -- >> we agree with the stockmarket. we get painted, yes, in january, we had a leg of a lot more upside. we thought it was going to take a year to happen. >> that performance happened in three months. yeah, sometimes these things need to take a step back. >> adam, thank you.
5:55 pm
what did you make of the price option today? >> we wanted it to trade more, it would have been nice to put it down to that 280 level. maybe it did, maybe it does, i don't know, but, listen, obviously, he drove down a lot cheap were than i do. it's a hope story. it's a belief story. if you believe he can get, he being elon music, any percentage of the plant that he has, i think the stock to the upside still. >> valuation is insane to me, it's sort of like you close your eyes, you buy this and go along for the ride. it's like don't fight the fed in a scenario where the markets have taken a volatility of rates. >> don't bite tesla. >> listening to adam's raxality about the two components of this business is refreshing. adam the talk object about deliveries for a car company that ultimately, maybe we will get to 200 vehicles by the end
5:56 pm
of the year. this is about a company sustaining itself to compete in a much bigger sphere. which by the way is dominated by other major players that might get there first, to say this ten times opportunity is for tesla and tesla alone, while they burn cash to get there, i'm skeptical. but i like adam's views, he nails the stock. >> they are major changes of the data in termts of the autonomy. >> guy talks about the hope and belief i pound the idea that it's a very difficult stock to own. it's hard to own. it gives you opportunity. we see volatility where it's high. we say a better opportunity to be selling volatility. other times when it's low. where it's low, it's a great opportunity to be involved in tesla. up next, pete and tim are hot on fast food stocks. we'll give you the beef when we come back. you too, unnecessary er visits. and hey, unmanaged depression,
5:57 pm
don't get too comfortable. we're talking to you, cost inefficiencies and data without insights. and fragmented care- stop getting in the way of patient recovery and pay attention. every single one of you is on our list. for those who won't rest until the world is healthier, neither will we. optum. how well gets done. we've done well in life, with help from our advisor, we made it through many market swings.
5:58 pm
sure we could travel, take it easy... but we've never been the type to just sit back... not when we've got so much more to give when you have the right financial advisor, life can be brilliant. ameriprise ♪ ♪ i'm dr. kelsey mcneely and some day you might be calling me an energy farmer. ♪ energy lives here.
5:59 pm
>> down to the final trade, pete najerian. >> looking at taco bell, pizza hut, going higher. >> mcdonald's is getting their burger down and technology. >> i'd be a seller of nike. they are taking market share in
6:00 pm
north america from nike. sell it. >> we have big ones in from san francisco tonight. going gophers. >> i know, i was there. ranger hockey. go. i'm melissa lee, thanks for watching. at 5. "mad money" 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 minute. welcome to cramerica and welcome to our final day out here on the west coast at cnbc one market in san francisco. other people want to make friends, i'm just trying to make you some money. my job is to the just to entertain, but to educate and to teach you, so call me


info Stream Only

Uploaded by TV Archive on