tv Fast Money CNBC September 8, 2017 5:00pm-5:30pm EDT
i really do think that's why i'm very negative on financials. very negative. >> ten years ago would have been perfect timing we'll see how that all impacts the banks. wait for the inflation numbers thank you very much. evan, mike, "fast money" begins now. >> live from the nasdaq market side, i'm melissa lee. your trard rs -- tonight, irma causing destruction in the kai rir yan and now heading for florida. plus, energy coming back to life one trader says he seeing something nas got him hit iting the sell button. first, we start off with what we are calling america's pricing war. it is being fought on two major fronts in the media space as a landscape evolves an the big box retailers as food prices and
growing competition put pressure on the company target announcing today it will be lowering prices across the board on thousands of units. it took down rifvals walmart and costco who are the winners if there is a winner >> can't fight a land war in asia who proved that? that napoleon guy. can't win a price war with the walmart. i don't run target i'm not anytime soon, but they're fighting the wrong battle they should fight a pat l on price. on experience. they're not going to win this. i was bullish until this news came out now, you have to reevaluate. walmart will win why? because they can >> it's not just walmart amazon all of the pressures here. >> walmart sold off immediately when that came out it's a price war, it's amazon that's got this price war against everybody, so there's
disrupters that's who you can own it's amazon. i look at walmart and say, they're in serious trouble it's because they're going to be smoked when it comes to the market share with grocery. grocery is a big part of the business 53% of revenue the margins are going to get smacked. no question. >> walmart has, of all the names out there, walmart has the experience with operating on very low margins i'm not saying these guys are going to make money. it's a price war and you're fighting against the company walmart, who is not afraid to lose money that's not actually really a business that i want to enter into but if you put off, if you're talking costco, target and walmart, if i had to own one, i'd rather be in walmart because they can compete in this where something like a costco is in trouble. >> a smoke and mirrors show.
this whole jet.com thipg >> you said they were competing. >> walmart is a smoke and mirror show the jet com acquisition was a $100 revenue company they bought that to have that splashy headline we're going head to head with amazon no question when you start to see the true comps including jet, you're not going to necessarily see. >> i think that's the key. clientele that goes to walmart is not the prime member. fight about who you can win. walmart can win. >> 16% market share in food. so even though there's a lot of other people entering the food space, they have a better approach to it i think walmart, you can still buy it they can, the consumer wins. that's ta big win.
>> absolutely. is it binary >> i don't personally, i don't think it is. i think that's what the market suggests brian sullivan does great work with amazon. they're not as huge, obviously they're huge, but in terms of market share, there's still a lot of runway for them is it binary i don't think so necessarily i think there can be multiple winners. i think walmart, if you want to fight that batting, you fit right into walmart's sweet spot. target should get back to being tar get of five or six years ago. they got away with that. i think a costco can figure it out and walmart can win. >> when it comes to stocks, ma'amazon has the edge here bece investors are willing to give amazon the pass on not making money. >> they don't have to invest as much they can show some sort of profitability. all the shorts get spooked $1,000 name.
>> to keep pace with amazon whole foods or aldi, they're coming in aggressively to tablg market share for them. >> but david, this is a stock show you could say gross margins can be destroyed, but walmart came back from the abyss. it's up 14% >> is that a reason to not be a walmart? >> i think people know they're going with the best in profess until. in the space so if you're not going with amazon, i think people are starting to decipher the difference between an amazon and walmart. they thought it was only one >> from the jugular, they don't care about breaking in business even needs to make money. amazon is no -- >> let me ask you guys this. okay, amazon buys whole foods.
you think all of a sudden, whole foods prices are going to be walmart or kroger like no >> did you see the price cuts whole foods put out there? >> on select items >> they had $700 million of operating income year. whole foods did -- get back to prime numbers. people are going to sign up and guess what, aldi is going to commit as well they are in walmart's wheel house now when it comes to competition and price. walmart's going to try to keep up with that going to cost them money they're going to bring prices down >> different product though. you go to -- it is you go to whole foods to buy a craft soda you go to walmart to buy a fanta orange or something. >> let me just say -- >> that's what i do. >> the american public especially in the midwest, i've had a lot of conversations about this with people and we've done research people are eating healthier. they're spending money on food in a different way
walmart what works ten years ago, five years ago -- >> have you been to walmart lately have you seen the organic foods lately they're selling off the same stuff. >> but when you have a competitor coming in, you're a number one player are 18% market share. >> you have the experience to beat the guys out. top of the hill can sometimes knock the wolf that's coming up. >> all right all these retailers. suffering through this price war. which would you by if any? if any >> let's play the game look at kroger today stock was down 7.5%. traded 60 million shares typically trades 12. huge volume day. why do i bring it up i get kroger is getting their lunch handed to them without question at a certain point on valuation does it make sense for somebody who needs a distribution network to look at a kroger's for that reason alone to me, that was what it's for amazon
>> i like kroger walmart. the only thing that's really unamazonal is home depot >> tos holding i think it's a stock >> good idea to not jump in, but we hope that the storm is not as bad as they forecast it to be, but if it isn't as bad, home depot, lowe's, those are all -- >> the kroger key is the fact they're not getting longer term guidance okay, that's the original question >> i'll give you two reasons to buy walmart. one, because they have omni channel. secondly, risk reward. look what happened today we had news come out that was negative for walmart traded down to 78. bounced right off that didn't close at the highs of the day, but didn't close smack on the lows, so now i know 78 is my stop off point i like walmart >> grasso. >> i think there's a bigger
danger of walmart stealing amazon clientele than the other way around walmart. >> okay. on to the next front of this pricing war gripping america media stocks the arms race for eyeballs as margins get crushed. who wins this war? let's bring in andy serwer good to see you. >>wi >> likewise. >> what was interesting in terms of the comcast comments made at the conference yesterday is that they were talking about these content providers over the top services willing to cut prices so deeply, they're offering it at a negative gross margin how can you compete against these kinds of price cuts? >> it's brutal it's a lot parallel. you are in a box look at disney that's something we wanted to talk about
pr vid over the demise on the business shift the whole model and tell the board. then he's got to go out and tell shareholder, we're changing it up you're soo right no pricing power and content is xh xhottized. what's the news business is cnn that different from msnbc, et cetera people are looking one and one together to equal three in terms of content and distribution and looking to shift from traditional distribution to over the top and both of those transitions are hugely, hugely difficult. >> so, it could be difficult for comcast to compete with the new
dish package, few but for disneo they hold the cards in this? more flexibility in pricing? >> i think they have more than some of the other players, but look at what they're talking about doing. what iger was talking about wa these two services first of all, the movie thing isn't going to be ready until 2019 i'm like, bob, get it faster sports, he's talking about doing next spring. but you know, in both instances, i think there may be an answer, particular with content. that's read hastings, netflix. i think you're going spend tns of dollars doing this or buy netflix then you have a success or in hastings so it's maybe the biggest apple hire of all time market cap at disney is what, 149 billion. netflix is 70 billion. the it's a huge deal shl but iger hasn't been shy b about doing huge deals before. >> it's like he's watch iing th
show >> reading your mind >> he's got this espm thing. >> this is a legit question. not trying to be a wise guy. how many apps will people tolerate to get their content? if everything is going to that model, is it just going to be -- is have 32 apps to watch my program. >> you hope it's going pan out you're so right. i'm overwhelmed. i have no idea which services, which models are optimal and you know, you hope that the a la carte way of getting content in the future is number one, afford bable and number two, understand bablunderstandae i think we're going to be in a tough place for users and consumers. i think that's a really great question
>> good to see you editor and chief of yahoo! finance. >> grasi think what you bring ot that last question you asked, is it the same thing we felt when we had cable channels and it was 300, 400 channels. i think we're just seeing it repeat in a different shape, but i think the content providers at disneys are still buy netflix, still buy and i think comcast i still a buy. >> people get used to it i'm used to going to hulu, netflix, amazon for what i want to watch >> the younger generation that likes the avocado toast, they consume content in a whole different way than we're used to, so when i was younger, we got the 300 channels of cable and i got used to that millennial generation has no problem using multiple apps. who's doing the best job in that netflix. >> coming up, hurricane irma
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welcome back hurricane irma is barrelling through the atlantic and heading straight toward florida. now a category 4 storm with hurricane jose waiting in the wings. let's get to caylee at cnbc headquarters with the latest >> it's still a very strong category 4 storm, but melissa, it is only two miles per hour below the threshold for category 5. so it is right there and it's going to keep its strength as it continues to move to the west. it's moving right in between cuba and the bah hamas and will continue to do so over the next 24 hours before it tabs a turn to the north, that's when we have to watch it go towards south florida. as it moves closer to florida, just over 300 miles away, you can see the hurricane's wind
probability. the dark purple, about%. this is through the next five days closer to the keys and miami it goes up to really 60 to 70% as early as tomorrow, we are going to have the potential of tropical storm force winds for south florida. early as tomorrow morning. farther inland, it's going to be more like saturday evening but then it's going to continue to go up so, tomorrow, conditions will deteriorate. timing tonight through tomorrow, bahamas and cuba dealing with irma, sunday morning so, before dawn, south florida is going to see landfall from this hurricane then late sunday night into monday, central florida, late monday into tuesday for south georgia then continues to move north. east coast, west coast, we've been saying it all day with the track this is taking, everyone will deal with hurricane force winds in florida >> thank you let's look at the moves in insurer stocks today
really getting a bounce after irma was downgraded from the cat 5 status to category 4 also because of the trajectory moved more west, more away from miami, away from the bigger insured loss potentials. that's when they found some putting here all-state travelers, aig, all making a nice move today just yesterday, the insure etf was on track for its worst week since january 2016 and here, we have a reversal. >> i think this is exactly to that point of let's all hope this hurricane is not as bad as they once had thought. or predicted and if that's the case, insurers remain a buy home depot, lowe's, remain a sell if you look at the refining squeeze we've seen, valuer o you sell the energy space, but in particular, the refine space >> it was really, really bad, some days, we as taxpayers, it was some floor there
i think going into next week, you probably still have some kind of big in all these names my favorite is chubb >> i think a lot of wall street firms came out defending the insurers travelers, doesn't have a ton of exposure to florida. so i think in general, it helps to go out a lilt l bit i would look for phm >> never heard of it >> it's done tremendously well but they have 20% of their sales coming from florida. this is going to delay projects and buying so i would probably take some chips off the table. >> bob and steven and tim have been having a debate about rent a cars put out a note yesterday, one of the stocks was this group one automotive, which might be the first time we've mentioned on the show take a look at the stock look at it on valuation. cheap. look at the short interest pr pretty significant the move it's had over the last week, why do i bring it up because if you're looking for a trade, it's stocks like this where hertz two and a half
months ago that could have oversize moves to the upside this is one that might have that >> coming up, b irk o tech is on fire, but if you missed the move, we've got a way to catch the rally without getting burned you're watching "fast money. here's what else is coming up on fast ♪ >> and as crude has come a bubbling up, energy stocks have had their best week in the month, but there's something in charts that should test taking profits. we'll explain. plus ♪ it's coming. apple's new iphone and if you're looking to get long shares of apple, wel ow'lsh you how to do that for less than five bucks when "fast money" returns.
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its big health scare and it is wells fargo's wen year anniversary of the fake account stand, so so far this year, all three have underperformed the s&p 500, so are these brands damaged beyond repair? if so, is that the case for these stocks as well >> damage beyond repair, i'm not sure of those three, equifax just happening now. l the other two, what's interesting about them is that they had continual problems, so chipol chipoltle had different issues i i think this is a bigger deal than most think for equifax. if i'm checking credit, how do i know that their database is accurate i would never use them i'd go to trans union. i think they're toast. >> i agree the reason for our downgrade was a survey andrew childs is an amazing analyst. he did a survey with all of the deep dives he talks to here's the issue with walmart. the brand is damaged
no question about it however, they've got a new product lawn it's going to show data at the end of the month >> it's probably going show basis point improvement, which it does when they launch a product. that's not long-term sustainable. probably takes them off the table. >> that's a separate question. in my opinion. >> final trade steve grasso >> that's going to see following through in the coming weeks. >> a lot of people going to the atl. you buy coca-cola drink it, too.
>> guy >> be safe in south florida. i know they're watching. right? i mean, i think we all share that be safe. and kroger for a trade >> that does it for us here on fast we'll see you on monday. options actions starts right after this break stay tuned listen up, heart disease.) you too, unnecessary er visits. and hey, unmanaged depression, 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.
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you know what, the gang's all here in new york city while they're getting ready, here's what's coming up. >> well, comes down to a few moments. >> and apple's moment is fast approach wg the release of its new iphone we'll tell you how to protect your shares while still profiting. plus -- ♪ that's what biotech stocks are doing and there's one name tha