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tv   Fast Money  CNBC  March 7, 2019 5:00pm-6:00pm EST

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our great international women's day lineup we're joined by some of the most successful women on wall street and corporate america tomorrow at 3:00 p.m. eastern on "closing bell." i'll let you guys join the show as well. >> we look forward to that thanks for watching today. that does it for "closing bell." >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's time square, i'm melissa lee. tonight on "fast" check out shaz of costco jumping 4% after reporting earnings moments ago the conference call is kicking off right now and we'll bring you the latest details. we are going yield hunting the traders tell you the names they think have more room to run. first we start off with the market sell-off. stocks getting slammed, down more than 300 points, the market now on track for its worst week of the year. we are starting to see cracks in the market spreading
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transports now down for the tenth day in a row, the worst losing streak in a decade. smock caps are getting smacked, faller deeper into correction tore toer territory and the chips are getting crushed. is it a sign that the worst is still to come? how bad can things get >> think about how good things were i think this is a case of we oversold, overbought, et cetera. the market over the last few days is telling you it's very concerned about growth it's not worried about inflation, not worried about trade, it's worried about growth you have treasuries down 2.64 on the 10-year. look at what's going on with the dollar the ecb today should also have you concerned. basically draghi is saying we're not doing anything soon. terrible for european banks, which by the way are a systemic risk for the global economy as well i look at the dollar up 75 basis points that's usually a sign of risk off. i look at the 10-year treasury, down to 2.64 at 2.60, we break through there,
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i'm worried. we're at the 200-day on stocks for people who have said this was overdone, they were absolutely right let's wait to see where this settles. i don't think we are going to retest i don't think we're even going to get close to retesting. i think friday we'll be reminded that we have a decent payroll number. >> i agree with tim, it was all positioning. we got way to pessimistic, way to optimistic on the way up, there's zero growth. german pmi is basically at 74-month low this is -- there's no growth there's no growth in europe. growth is cascading lower here i do believe we'll test lower levels i'm not sure if it will be the lowest levels that we've seen. >> tim just mentioned 2.64 on the 10-year, you get worried below 2.60 2016, 2017, the narrative was stocks and bond yields can go up at the same time because the 10-year going back up toward 3% almost doubled off of its lows was bullish because it's a
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reflection of this inflation and global growth. now i think it works the other ways the stock market is not a whole heck of a lot from its all-time highs. if you look at the interest rate expectations, zero increases for the rest of year here. so this 2.64 is reflective of the fact there is no growth. i just think that what happened with the ecb, we know that mario draghi will do whatever it takes. the difference between now and 2012 when he said that is there are -- what's left in the toolbox so we could have a situation -- >> i get what you're saying but when mario draghi comes out and says that through the end of this year, that puts a weight on our treasury yield should we interpret the 10-year yield at 2.64 as an indictment of growth here in the united states when we're being tethered to what's going on around the world? >> i agree no, i think that's a different issue going on, right? so i think it really solidifies
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the fed absolutely being, you know, not a factor for a long time that, i think, is the material advantage to the market. as we wait for a trade deal which is fair low priced in already, right if we see a hiccup in a trade deal, that's going to be bad we'll see volatility really spike and probably a pretty aggressive sell-off. i think we will see a trade deal, so i don't know that we get there in a straight line that to me is the biggest risk to the market, bigger than some of the other factors, bigger than what data we see tomorrow, i guess, and then we'll start to see some earnings. but i don't think we can really see earnings power accelerate until we have some clarity. >> you're talking about clarity and corporations putting money to work, cap ex. we have not seen a boom that we expected to be unleashed after those tax cuts in late 2017. any deal that you get before q1 earnings next month in april is going to be a deal that the market doesn't want. i'm just telling you think about it, that "new york
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times" story that came out today, there was a leg lower when it said the chinese may not be in a big rush to do the deal donald trump wants to do. >> it's set up for a sell the news event maybe there will be a little pop on the day of the news breaking, but i can't imagine it would be a long-lasting pop when you start to talk about the ecb, that they're out of bullets, our fed only has 250 basis points of bullets. what's that going to do for the economy. >> they have balance sheet bullets. >> ballot sheet bullets that they're still doing qt and unwinding. >> but if you're saying they don't have bullets, that is a lever they could pull, ovr looefr. >> you would need 500 basis points to pull an economy out of recession. you need a vast, strong softening curve for the yield curve. you kneeled thneed them to throw
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everything it's got to be protracted. he's got to cut rates and only has 250 basis points to play around with. >> a lot of responses but i'll say this i don't know that 500 basis points is a rule of any kind. >> just historically. >> i think you have a dynamic where the fed -- we'd like to see the fed get to normal and we're all a little disappointed and the balance sheet is another place where we've only taken 11% off the balance sheet's peak size so there's big issues here but put this in the context of where the economy is right now i don't care what you say. i don't care what the ecb is telling us the u.s. economy isn't close to a recession. so the fed is very, very easy. if global conditions stay very, very accommodative, these are the things we were most worried about 9 months ago, 12 months ago. yes, we're late cycle. yes, we rallied back hard. let's not get carried away i don't think we can test 3,000 on the s&p any time soon. >> everything you just said, so eps is flat or gone negative, margins have peaked and gdp went from 4.2 a couple of quarters
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ago to 2.6 and now with estimates to maybe me below 1%. so i don't disagree with anything you said about the economy, but when you look at the backdrop and the fundamentals, i'm not sure you want to be paying anywhere close to the multiple -- >> except the fact that we've had periods, 2015 for sure, even 2016 where we were paying an enormous multiple for equities because rates were owhere. essentially the earnings -- the yield premium on equities was much more attractive basically if anything equities get cheaper when your discount rate goes lower, they're worth more i look at the environment and i don't like -- everything you guys are saying sets up for a nasty, nasty situation somewhere. the fed out of bullets, other central banks deep in the negative territory and global debt in negative yielding territory. guess what, it's not happening any time soon. you get to a place where i think a lot of companies also who put the brakes on capital spending,
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who put the brakes on any investment i think will get back in the game. >> if you are listening, grasso, at home -- >> no, he's right here >> one would think that you are doom and gloom at this point, that you are negative the markets. >> i think you need to recalculate and readjust where the market is, what you're willing to pay for it and you're not in a global synchronized softening. you're not in a dovish state anymore. >> you're in a global synchronize it dovish phase, though. >> you had the ecb throw an unbelievable amounti of aid toward their markets in 2015 here we are with all of the european markets pretty much where they started in 2015 and they have zero gdp so all of that easing that was thrown on the marketplace did nothing. >> so we are talking about positioning earlier. is the positioning on wall street such that everybody is negative europe and that the
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outlier situation is actually an upside surprise should china stimulus actually kick in? >> here's the problem, right i keep hearing the third year of a presidential cycle is really good for stocks. here we are, it's march 7th and the stock market is up 10% i don't see what the upside is considering the fact that the likelihood of the most important positive catalyst would be global reflatation in growth i know you think europe and china might have bottomed. there's no indication that's been the case other than the expectation of more fiscal and monetary stimulus. that's it. so i look at what's going on here in the u.s. and say we're up 10% i'm looking at the nasdaq got rejected at 7645 i'm looking at the s&p 500 got rejected at 2800 >> let me ask you, do you think there's any -- >> i say to myself we're probably going to be trading in ranges just like we've done for the last 18 months, but there will not be new highs and the likelihood is the s&p will be
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back towards 2500, 2600 in 2019. >> let me ask you, a lot of what you say has absolute merit, right. we've seen some of the data is not supportive of europe growing. but if we were -- >> a lot of it was silly. >> a lot of what he was saying was silly? >> in a rate environment like this with a fed put and ecb put -- >> it's not a put anymore. >> that's my question. >> it's not. >> if it's proven to be a put for a long time. >> you go back and look at all the iterations of qe, it was just desperation time. balance sheets and sovereign balance sheets were in a different place and things were very fragile now ten years on, i'm saying look at how big these balance sheets and sovereigns are. what are the bullets we have this $4.5 trillion balance sheet that was a trill january back when we started qe. >> we just had a terrible deficit number two days ago.
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again, we have to think about this in the context of where we are in the markets you guys are talking about two years out. our next guest says do not fear the sell-off this week because the bull market is not dead let's welcome back jeff mills. great to have you back, jeff. >> great to see everybody. >> we've got a lot of doom and gloom on this desk tonight but you say new highs are coming this year. what drives us to new highs? >> i think where we are today, we were bound to get here. there was no way we'd sustain the momentum we saw in january and february if you look at some of the complacency that was building up under the surface. the put call ratio collapsed if you extrapolate from the options market what that was pricing in from a sentiment perspective, you can back out the probabilities for different market moves 10% higher, 10% lower. options market was pricing in the probability of a 7% probability of a 10% move lower. that's only in the 32nd percentile of observations over the last five years.
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if you look at a 10% pop pricing in a 3% probability. that's lower, but that's in the 62nd percentile over the last five years so that's tilted to the bullish side as well ultimately that complacency needs to come out and the market needs to be doing what it's doing. >> can you believe what you believe and that is the markets will hit new highs and also believe what they are saying in terms of their outlook eventually for global growth and the u.s. >> here is what is being underappreciated a bit it's only early days here, but it's starting to smell to me a little bit like 2015, 2016 global pmis were rolling over, everybody was talking about the potential for a global economic recession. all of a sudden china steps in from a credit growth perspective. the global economy reaccelerated and markets reacted positively if you look at what china has been doing, the credit growth numbers out of china welcome back big 3.2 trillion yuan, the largest month we've seen since 1992.
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i actually brought a chart along with me. they said they could throw it up on the screen but it looks at the chinese credit impulse versus manufacturing pmi this is versus the u.s. but you can map any region to it and it probably looks similar so with a lag, that increase in the credit impulse over a six-month period actually will bring pmis up with it. so it looks like it's bottomed so halfway through the yore you see a stabilization. >> jeff, when you look at china, though, china has tried over 50 different stimulative measures, none of them have worked. >> over what time frame. >> over the last year or so. >> i think it's into the 60s now actually. >> so in the 60s, nothing has worked back to the point you're talking about, the ecb had a whole bunch of bullets left. they were putting massive stimulus on. they don't have it anymore how can it be 2015-16? >> i go back to the china credit story. >> it's just china if china doesn't work, all else falls? >> i think that's a big part of
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it you heard draghi say that internal demand is decent in the eurozone he mentioned external issues as it related to china. but those numbers were big if that's any indication chinese stimulus is going to work, you could see maybe not a reacceleration like 2015 but at least a stabling out of global growth i think that removes the fears of a potential economic recession globally if you think about what has happened with u.s. earnings, so look at companies like apple, micron, nvidia, just those names alone have led to almost 40% of the earnings expectations deceleration in the first quarter. those companies have huge revenues exposure to china 20% from apple, 50% from the other two names. if you start to see some stabilization there, some of those names increase expectations and that puts support under the market. >> so in a fed tightening cycle we see multiple contractions we're not in a tightening cycle anymore so we think. back to 2015-16 -- what's the
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multiple here? >> you can back into what's reasonable earnings. you talk about 4% revenue growth that converges with nominal gdp. you get 2% share counting coming out of the market from buybacks and gets you to 6% earnings. so what is the correct multiple? i think we can maintain the multiple turn higher that we've seen i think the fed probably priced in a trade deal and things have to go right in that regard, but i think you can maintain the turn higher. i think those risks have been justifiably priced out of the market take 17.5 times on trailing earnings, say we got to 172 this year and that gets you to 3,000 by the end of the year. >> 3,000 jeff, good to see you. thank you. jeff mills. >> let me tell you a big difference between 2015 when we did have that global growth scare, taking it back to the u.s. stock market, what outperformed, it was faang, maga, whatever you want to call it people were crowded in because
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they weren't dependent on this notion of global growth. it's interesting that that group of stocks is sitting out right now. another one and we talk about it a lot, i know you guys like the banks, the u.s. banks here you saw what happened in europe. you see what's going on with these banks. we've seen banks in em and our bank can't rally so the fact that we have faang, maga sitting out and the banks are stuck in the mud -- >> but we've been talking about faang is coming back maybe you haven't been. >> the last week. >> there's conversations all over the map, isn't it >> what did i just say back in 2015 there was a lot of money hiding out in mega cap expensive u.s. tech growth, okay they're not doing that right now. so to me i think that's a big difference and the fact is if you were going to see some reflatatiion - >> i hear you talking about our banks like they're european banks. it's not even close. >> i'm not
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i'm saying they're not participating. it's troubling when you see outperformance in other cyclical areas that may not get what they need from this trade that was supposed to happen when we got a chinese trade deal. >> okay. well, i simply would say i don' think our banks have really participated in the rally for much of the last 15 months. >> so what's happened to the market for the last 15 months? it's gone nowhere. so what i'm saying -- i'm not saying we're crashing any time soon because citi can't get above $63. what i'm telling you is we may be in this range 2930 on the upside 22750 on the downside and we may not have any answers to these questions we try to answer every night. it's a beer run. shares of bud are up but could it be about to suffer the same fate as kraft heinz? plus check out the high dividend paying stocks that are soaring this year. the traders will tell you which names they are chasing higher. later, despite the sell-off
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there's one stock jumping that steve says is about to break out. he will give us his fast pitch we are live from times square in new york city. much more "fast money" right after this for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials
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welcome back to "fast money. check out shares of anheuser-busch it is our call of the day. the stock is down 2% after it was downgraded to sector perform from their top pick. the stock has been bubbling higher with an almost 25% rally since january. but the analyst notes the margin pressure the company faces is similar to that of the ill-fated kraft heinz. they made the same comparison between the two stocks yesterday on twitter called bud the liquid kraft heinz. so is bud, could bud be the next kraft, tim >> i like thisconcept because when i think of bud, i also think of on commonality to kraft and that's 3g capital that's partnered with berkshire hathaway it's part of so many deals where it's all about consolidating places where the top line is not growing. it's really about bringing assets together and driving financial engineering and not worried about anything else.
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3g has done really well. if you think about what's going on in the food producers, it's also going on in bud you have declining sales so i think this is a really interesting comparison and in fact i think i'd be cautious on valuations in the beer sector. i'm not going to tell you they have accounting regularities, but i will tell you that the same approach to zero budget accounting, this is what 3g capital does i've been investing in brazil for a long time. this is where this company put some of their best smarts. they're incredibly smart guys, incredibly successful, partnered with warren buffett. at some point you have to have top line growth and more than just a catalyst which is bringing companies together and spinning out inefficiencies. >> i don't have a position in bud. i hear you and a lot of what you're saying makes sense. i thought it was a different story in terms of the acquisition spree of bud but conceptually it's the same thing. what is the right multiple then for this company with little to no growth? >> i don't know -- >> it doesn't seem crazy
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expensive. >> it doesn't seem crazy on a trailing basis, whatever you want to do with that, it's trading 36, 37 times so i think it's expensive. look at what's happened to constellation brands some of their beer business is an export business, modello, corona we can even bring up cannabis. that's not the call but one of the things affecting these guys. i think there's substitution brown liquor, spirits, i think are playing into this. >> a big part of the call is they have been negative the past ten years. but the positive margins they have had are on the roll-up. here's a company that has $110 billion in debt kind of putting this together. then you put these secular headwinds that they have and trading at 17 times with no growth, you know, it's kind of dicey. i don't know what people are saying on twitter, whether it's the next this or that or whatever the last thing you want to do doing is holding one of those. look at what happened to kraft last week. when you see berkshire number
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one holder, 3g number two holder that's not the way to do it to give yourself a false sense of confidence. >> so the technicals on this, those are the fundamentals, trapped between the 100 and 200-day average. yoz those as your side cars. i'm melissa lee, you're watching "fast money." here's what else is coming up on "fast. it's yield hunting season, and some of the highest dividend payers in the market are soaring. the traders will tell you which names they think are worth chasing. plus, steve grasso is stepping up to the plate to pitch one stock that's surging today amid the sell-off. he'll tell us why he thinks this is just the beginning of a bigger bakt.reou there's much more "fast money" right after this
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welcome back to "fast money. " markets may be selling off but a number of stocks still managing to yield big gains. bob pi ssani will break it down. >> hi, melissa the s&p is down for seven of the past eight sessions right now. the market leadership groups like the transports, russell 2000, semi conductors, all the industrials, they underperformed the markets today and really in the last couple of weeks that's been a big issue for a lot of people. but the debate is about whether this is signaling some kind of broader slowdown the economic news in china and europe has not been good recently some of this may be simple profit taking after most of these sectors rose 20% or more off of their december lows so it's understandable you'd have some profit taking at this point. the important thing is the treasury yields, a separate
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story, down again today. 10-year yields 2.6% sit right near their lows for the year meantime, some high yielding stocks are doing well this year including coty up, western digital, exxonmobil is up, general motors also up this makes sense with interest rates remaining low, high dividend paying stocks would be more in demand for those looking for yields however, the strategy of buying dividend payers in general this year, is it providing a huge payout the largest dividend paying etf is up 9% this year another big dividend etf, the vanguard high dividend yield goes for the highest dividend paying company it's returning about the same, close to 9%. that is about the same return as the s&p 500. this also includes high dividend payers like verizon, pfizer, exxonmobil as well, johnson &
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johnson and procter & gamble back to you, melissa. >> all right, bob, thank you well, it sounds like a perfect time to play a game because we haven't played a game since like yesterday yield hunting. here's how the game works. we'll use a name like exxon up this year. if you're buying that name, you'll see that, meaning you're hunting for the stock. you like it. if you'd rather let it fly away, meaning you do not like the stock, you'll see that duck, that red duck taking off. >> in guy's defense, it's really confusing. >> it couldn't be clearer. the crosshairs and the flying duck. >> tim, you kick it off, exxon. >> i'm going to -- i'm going to hunt it. whatever the green one is. i'm going to put it in my scope and do whatever. anyway, i love the bird but the reason i'm going to continue to be bullish on this stock is because i think the energy sector will continue to outperform the whole issue with exxon to me
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is relative to their peers in the integrated space, i don't think it's that interesting. if you listen to their analyst, these guys will have $90 billion in free cash flow between 2019 and 2025 at a $60 oil price, which i think we're going to maintain so i think it's interesting. i think it's outperformed the xle, outperformed the xlp in the last two or three months. >> tim, is oil a big part of it? i think crude oil is one of the worst looking charts in the market when you look at where it was relative to the fall, i'm just saying it's had this move back -- >> you're going to let this one fly? >> yeah, i'm letting this one fly. is it contingent on crude oil staying firm in the mid-50s and working its way into the 60s >> put it this way, i think these companies, these integrateds are being run very differently than five years ago. i think there's been a change in approach towards equity investors as opposed to debt investors. >> they're going to be spending a lot when others are cutting
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back that was their thrust at the investor meeting. >> but there's going to be asset divert to divest you a divestures i do think energy can hold i'm not going to tell you where it is in two years between now and nine months from now, i think energy is holding its level. >> karen is next gm, karen, what do you say >> i like gm but it has nothing to do with the dividend. you know i hate this concept, we looked at like kraft a year ago. not a yearago, a month ago was paying a 5% dividend. >> are you hunting the bird? >> i'm hunting i like gm. >> yeah. >> it's an earnings play i think they're doing an excellent job. i think clearly people are concerned peak auto earnings are going to come down we've seep thn that in the multe which reflects a pretty dramatic downturn in auto sales. >> i think they're doing the
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right things they have turned a corner for gm on a relative basis. >> in terms of the businesses or the stock. >> the businesses and the stock. i do believe the stock will come in a bit i agree with karen, you never want to go looking for the dividend because you could have the stock roll over and give back whatever yield you were searching in one day, two days, three days but this is one that i would hunt, so i would be a buyer with the green. >> all right, dan is up. philip morris, dan. >> when bob pisani was giving us that lead-in and talking about how well some of these talks are acting, i look at a stock like philip morris which is up basically 10% but up 30% from its lows not its christmas lows, its january lows this kept on going down in january for fundamental reasons. you've got a 6% dividend, well below market multiple. there is a little growth there cash flow per share will be declined yore ov ed year over yr
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i'm letting this one fly i don't like the relative performance. i don't think you trade a name like this, as controversial as it is, in this market. i just don't so relative to the fact that it's up 30% from the lows in january, but only up 10% on the year, i don't like it. >> next up, grasso steve, what do you say about coty. >> the stock has been clobbered. the latest pop in the stock was due to a headline that j.a.b. was going to increase its holdings, its stake within the name itself. i don't think that this dividend is safe. i think that we're going to have to see what takes place over the next coming months but if you have a problem with earnings, i don't think you should be hunting for this one so i would let it fly. >> all right, thank you. tim? >> as much as i love coty's products, i don't love the story at all so i'm going to let it
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fly. >> kids today -- they're not using coty they're using the >> did you run out of yours? >> they ran out of it right away >> that's all that bronzer dan likes to use but in terms of these stocks, it's not necessarily hunt them specifically for the yield, but if you like the fundamentals of the stock plus you get the kicker of that dividend yield that, could really help. >> that could help, exactly that if you look at it the other way around, coty is a perfect example. >> if you want to go all options action on people -- >> should we do that there's a lot of things that you could do in a name like philip morris i think it's important we talk about the range that it's in that dividend, you could lose it in a day
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so there's also other strategies you could buy the stock, sell out of the money calls, that sort of thing. >> how important is a dividend to you >> very little but i would reiteratewhat's been said here let me throw a name we didn't have in there. at&t i actually think the fundamentals at at&t are getting better. >> you're hunting it. >> i would be hunting, i'd be getting out my scope, there would be a green thing, whatever that was and the reason for that is because this is a company that i think has started to divest some of that debt, et cetera. so dividend not critical. we have a news alert on fed chair jerome powell. let's get to eamon javers in d.c. for the details. >> reporter: yeah, this is going to be must-see tv. cbs has just announced that jay powell, the fed chair, will be on "60 minutes" this weekend in an interview that has already been recorded. powell sat down with cbs' scott pelley this week in washington, d.c., for what they're calling a wide-ranging discussion that includes the fed chairman's remarks on interest rates, the outlook for america's economy
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and whether the u.s. financial system is vulnerable to cyber attacks. they also say that because the interview comes almost ten years to the say since pelley interviewed ben bernanke since the great recession, bernanke and his successor, janet yellen, appear in the interview alongside powell to discuss how they advised him to handle the job and the criticism that comes with it. that will obviously be fascinating viewing. so interesting to see whether or not they discuss the criticism from here at 1600 pennsylvania avenue from the president of the united states who has been very critical of jay powell's approach to handling interest rates at the fed we'll see whether they get into that at all in the interview, but that news just breaking within the past couple of minutes. >> wow eamon, thank you eamon javers joining us from the white house. i don't even know where to go with this because it is so unusual, right, for a sitting fed chair to do a television interview. this is a fed chair who has been
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talking almost nonstop it has gotten him into trouble it's got him out of trouble. >> that's when the market started selling off, he was talking. this to me is unbelievable that he would do this >> the point is why? why is the acting fed chairman going on "60 minutes"? "60 minutes" will do everything they can to stir the pot on this i don't see why he's sitting in there answering those questions. it's not a congressional hearing, it's not humphrey hawkins. this guy is the fed chairman i also don't think the way this is interpreted on a sunday night primetime audience is exactly how it should be interpreted in the context of really talking to people in the federal reserve bank. >> did eamon say bernanke and yellen would also be -- >> yes. >> so last year yellen was saying, i think that was sort of an interesting quote, about she believes trump really doesn't understand i guess the role of the fed. >> right. >> or what tools it has available, what they could really do. that will be interesting i think they'll probably come back to that, i would imagine. >> given the criticism that he's faced for the same reasons that
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that was everybody's first, i have to think this is a very gently planned interview >> you don't think scott pelley will ask him about the pivot and the markets? >> maybe, but again, like you have all said, he's really good with a script. >> he was only good when he was reading off that piece of paper. >> you've got to read the script. >> we're not going to have the futures down 10 points at 6:45 p.m. on sunday night. >> leaving aside why i -- why cbs? outside of nerds like us, why would they put this on sunday night primetime? why would people really care why would the fed chairman go onto "60 minutes" and give detail for anything. >> here's a conspiracy theory for you. this is a fed chairman who has met more times with congress than any other sitting fed president during this same amount of time in office he may be on a public campaign to sort of bolster his support in light of the president's criticism of him
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get allies in congress and in public. >> sounds like the fed being political. it sounds like the fed going on a political campaign. >> let me give you a different conspiracy. >> okay. >> that he wants to soothe any fears people have about the economy, right we'll talk about job growth and how the economy is doing if that were the case, i wouldn't love that as much. >> i don't understand why he needs to soothe our fears about the economy. >> i don't either. it's just a conspiracy theory that i just worked up just now >> he was in front of congress for, what, two days last week or something like that. a lot of questions were asked. at the end of the day when we came into -- at some point in 2018 there was an expectation of three rate increases this year that is now off the tables a lot of people think the next move will be lower i think the notion of him explaining to the american people a very controversial thing, i don't think there's anything wrong with that i just don't -- and i would not
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expect him to make a big mistake. i would not expect anything to come out that's that market moving also. costco is up double digits this year. we'll tell you what is driving that move. plus grasso stepping up to the place getting ready to pitch one stock that will bow a home run for investors. find out the name when "fast money" returns you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. that there's a lobster i in our hot tub?t. lobster: oh, you guys. there's a jet! oh...i needed this.
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welcome back to "fast money. despite the sell-off today home builders rallying with the etf up more than a percent as zelman upgraded toll brothers to a buy despite jpmorgan downgrading the group to a sell. the group has been on fire up 20%. grasso says one of these names is with about to see a bigger breakout grass or grasso, take it away >> that's right. lennar you could have said this about the home builders for a while. there is pent-up demand to the tune of 3 million new homes. what does that mean? housing starts right now are at 1.25 million normalized rate is 1.75 million. you have to make up this
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probably in the next five or six years, if we get back to a normalized state so if you do that, you're doubling pretty much where we're at right now as far as the housing starts so that's going to be a huge tailwind for the -- let's go back to the other screen for one second that's a huge tailwind for the market now, if you look at the move that lennar has had, tremendous, right? but it's also bounced off the recent low so it's had a pretty good move off the recent low in years where it's been off like last year, tremendously where the home builders are under pressure, they outperform drastically. so where you see this basically is that everyone is negative let's go to the chart now. so if you have basically a normal recovery from here, you're looking at a maybe 10% to 15% upside from where we're already at from this bounce on the recent low if you get something more
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substantial, you could get back here and you're looking at a pretty incredible move here with a stock that's already up. a lot has to go right, but a lot is already factored in that's gone wrong. >> hey, steve, so you have the chart up there i just pulled this thing up. obviously the stock is rallying. it had decent results and reacted well in early january but it's kind of stalled out it got up to $50 and literally got rejected that looks like massive technical resistance right there. is that a worry of yours >> 50 is the massive level as you just said, dan what happened right here is isi came out with a negative piece on the home builders the negative piece is they've run too much they didn't really say that fundamentally that there were things that were going to go wrong for the builders, they just said time to lock in profits because it ran this much you can't argue with their call, but i do believe that this level will be taken out. you're going to be closer to
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this level sooner rather than later. >> no more questions, time to vote are you buying or selling grasso's pitch on lennar tim. >> i'm sorry, steve, i'm a seller i think these home builders gave not great guidance and they're not going to give guidance and sounded kind of soft to me but you do have a beard in my picture. >> that's a good semi detached pi picture. >> karen. >> i've got a buy. i think the interest rate move should help, employment numbers being so good should help. i like it. >> dan. >> i'm a seller. it wasn't a bad pitch but i don't think the interest rates going down will be beneficial to u.s. consumers at this point i don't think the jobs data where we're getting the gains are not the people buying lennar homes. more importantly, are you at home buying grasso's pitch for lennar vote in our twitter poll and we'll reveal the results later in the show. i don't know if it's going to be
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toni braxton, i'm not sure, i don't know we'll see. >> we've got a new song. >> check out shares of the stock and other social players all sinking today. one trader is bettinthg at one of those names could continue to plunge we'll break it down when "fast we'll break it down when "fast money" returns i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to for a prospectus containing this information. read it carefully. about medicare and 65, ysupplemental insurance. medicare is great, but it doesn't cover everything - only about 80% of your part b medicare costs, which means you may have to pay for the rest. that's where medicare supplement insurance comes in: to help pay for some of what medicare doesn't. learn how an aarp medicare supplement insurance plan,
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call today to request yours. let's recap. there are 3 key things you should keep in mind. one: if you're turning 65, you may be eligible for medicare - but it only covers about 80% of your medicare part b costs. a medicare supplement plan may help pay for some of the rest. two: this type of plan allows you to keep your doctor - as long as he or she accepts medicare patients. and three: these are the only medicare supplement plans endorsed by aarp. learn more about why you should choose an aarp medicare supplement plan. call today for a free guide. welcome back to "fast money. " we've got an earnings alert for you. shares of costco rising in the after hours erasing losses from the day. the bulk wholesale store up 5% after beating analysts' expectations costco up more than 10% this
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year so do you buy costco in bulk, karen? >> i got that, that's funny. sadly i don't. i don't own it i wish i owned it in bulk. again, they put up really good numbers. they seem to do everything right, i've got to say however, the stock is priced, it's a premium to others in the space. i'm in target. i don't think i could pull the trigger up 10 bucks. great earnings, they're doing a great job, they always do, they execute. >> how does this company compete in the world of an amazon where you can get things online. >> how convenient is it when you go to costco, you can get what you want, get it in bulk when you're looking at bulk buying, i think there's a difference between what amazon, what that customer really competes with versus the person who wants to show up and buy for a restaurant >> dan, what are you buying in bulk >> underwear >> tmi
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wow. still ahead, social butterfly, snap, facebook, twitter up off december ows. one trader is betting one stoc llose its wings. we're back right after this.
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welcome back social media stocks, facebook, twitter and snap all falling today, this following a post written by mark zuckerberg sk s discussing privacy on the
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network saying he believes a privacy focused communications platform will become even more important than today's open platform so a bit of a pivot from zuckerberg, but is this too little too late, tim >> i don't think it's too little too late i commend them for what seems like philosophically a bit of a business pivot and let's see where this goes with advertising and ultimately with engagement i will say this, what i've been critical about cap ex went up in 2018 from $2.2 billion to $7.2. they're expected to guide up another 4 to 5 billion from there. this is a company whose costs have to be going significantly higher than here i still think they have security issues i don't think it's going to zero, but i'm not bullish on it. >> karen. >> i don't know if this is a security pivot or pr pivot really it seems very vague to me on what exactly this future would be like and when i didn't get the feeling that it was to the exclusion of the rest of the business. to me it just seemed pr. options traders are betting
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on even more trouble ahead for the social stock dan is breaking it down. >> well, let's look at snp heap here that was the one in focus talking about direct messaging the fact that the stock was only down 4% i thought was pretty good and it shows they're doing something right because facebook wants to go after what they do really well. there was a trade that caught my eye today in snap. the stock was down 4% shortly after the opening. there was a buyer of 6,000 of the may 8 puts paying 42 cents for those. those break even on 7.50 on may expiration maybe this is a long looking for some protection. we have a three-month chart here this stock almost doubled off of its december lows here look at that gap that we're looking at maybe some protection to fill in that gap between now and the expiration should catch their next earnings. on the one-year chart it shows you where the stock has come from on the upside and now on the rebound off of the lows here so listen, this is an expensive way to punt for a 20% move in
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snap, but to me i actually think this facebook move is a validation of what they do well. don't forget, facebook has copied them before it hurt them right out of the gate a couple of years ago, but now it may make snap a very scarce property. >> for options action check out the show tomorrow at fo5:30 eastern time up next, results of the poll and the final trade. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, plan ches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.
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. welcome back time to reveal the results of our twitter poll and grasso lost badly. so we had to go classic. >> i didn't see that coming. >> toni braxton's "unbreak my heart. this is the original version, grasso, just for you. >> thank you big toni braxton fan. >> so is it really as bad as it gets >> there's sill celine dion. time for the final trade, tim. >> thank goodness we're not doing the dance version with celine dion. how about chevron, i think this is the best of breed in the integrated space. >> karen. >> not yield hunting but it has a great yield, it's gm its value hunting and i like it. if we get a trade deal, i think it's going higher. >> grasso. >> so i lost with lennar i lost the poll. so i'm going to pick lennar as my final trade so two negatives may be a positive. >> all right, dan. >> i'm going to do a little
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yield punting. ike looking at the tlt that got rejected six times last year >> you're punting, got it. >> that does it for us here on "fast. don'got anywhere, "ma my mission is simple -- to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to save you money. my job isn't just to entertain but to educate and teach you and put this tough market in context. call me at 1-800-743-cnbc. or tweet me @jim cramer. we're having a subterranean home sick blues moment here because you do not need a weather man to


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