tv Fast Money CNBC March 19, 2019 5:00pm-6:00pm EDT
my guess is if you break down their business model, every other part of their business they paid for properly other than for the song writers who are making the music, which is just shocking. >> david, thank you for joining us. >> it's my pleasure. >> to talk about this suit david israelite, national music publishers association. >> shame we're out of time there was a planned ipo, of course, wonder what it does to that. "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. check out shares of fedex. the stock is sinking after hours after the conference call is kicking off in 30 minutes. we'll tell you what to watch. plus netflix fighting back as apple gets set to launch its streaming service next week. how big of a threat is apple to netflix, the streaming dynasty the traders weigh in. the fed decision tomorrow could bring the bears out of
hibernation as stocks inch back toward all-time highs. the fed has put the chances of a rate hike on cold. the chance of a rate cut is rising all these statements calmed the markets initially but is the fed out of tools to keep the bulls happy? could a fed that's too dovish sounding, will that spark fear on wall street. >> two-part question are they out of tools -- >> if they turn too dovish is that actually bearish. >> great question, mel that's a great -- one of your better questions maybe of all time to answer the first part, no, they're not out of tools b.k. can speak far more intelligently than i about the tools they have. in terms of being too dovish, absolute low it can spook the market this was a fed that in october was telling you full systems go. we're on cruise control in terms of the balance sheet we have three rate hikes in 2019 what did they see all of a sudden in the greatest economy in the history of our republic not my words, the president's,
to make them go a complete 180 i would say if they get too dovish, absolutely, especially in the wake of what federal express just said could spook the market. >> they saw the market cave, that's what they saw they saw the president, heard the rhetoric, saw the market cave so you know where i stand on this i do believe that they're out of tools. even if they have the balance sheet, i think it means for them that they're throwing in the white flag that all of that easing, we can never get back to normalized balance sheets, we can never get down to $3 trillion. it is bets are off, they're out of ammo. >> i think the chances of us getting back to a normalized balance sheet are very close to zero you just have to look at japan and find out what happened that's where we're headed. there is plenty of tools for them to use. it's called printing money to me what's more interesting about the fed tomorrow is where is the fed put where's that strike price? the market is telling you right now on the s&p 500, 2720 let's
call it, the march 8 low, that's the strike price to me that's where the market is telling you, all right, that's where the fed comes back in. if we don't -- if we hit that level, we test it and don't go higher, then you have to re-evaluate. but i think the fed is okay for now. >> i think you guys are overreacting i think to say that the fed is out of tools and out of bullets, first of all, is to imply we're at zero rates, which we're not i know we're close to zero but not at zero rates. zero rates would produce a very different economy than the one we have. it's an economy that i think there is inflation, which is why i think inflation trades are very interesting because rates are a function of policy, not a function of what's going on globally and guy brought up the president. look, we all have to ask the question, it may not be a markets question, but ultimately the markets will respond to this did the fed -- did something change in the fed's pivot that was data related or did the fed change and why did the fed change and i think you can look around
the world. you can look at europe basically germany went into recession two quarters in a row. china, pmi after two years of going sideways and not that big a deal really have decelerated there's a rationale for what the fed did. even i would admit i think it was extraordinary the change in rhetoric from october to where we were. >> and having gotten fedex's quarter, which was for the fiscal third quarter, it was weak, the outlook, they cut their outlook for the second time in three months, in three months is that the new data point is that going to be the vanguard of the data points that the fed is going to digest in the next couple of months which will cause them to pivot even -- to be more dovish, if that's even possible >> i'd say 95% of the people disagree with me i don't think the fed should be looking at corporate guidance, fedex guidance, apple's guidance a couple months ago. in my opinion, woe all know that processed sugar is the worst
thing you can have we all do it but it's horrible >> i know that it's going to lead someplace and connect to the current conversation. >> let me say something. >> okay, go ahead. >> if we can ever get off iit, it is life changing. you feel so great, it absolutely changes your life. the problem is getting from point a to point c that in between is extraordinarily painful. that's where the fed is right now. quickly, we know that they shouldn't be doing what they have doing and we also know if they can ever get back to normalization it will put this economy for the first time since paul volcker on serious strong foundation none of us have the political or courage to get to that point. >> tim, the only thing i have a problem with what you're saying is if there is inflation, shouldn't the fed be doing something different other than hypothetically cutting rates at this point because if it gets back to that question, if there is inflation, they are running out of bullets and they only have 2.5% to play
with if it starts to actually creep up. >> so look, i don't think we have runaway inflation, and i think we have to fight deflation. so they're not hypothetically cutting. what you're saying is by implicitly -- they're implicitly cutting by not moving forward with an aggressive tightening policy, i would agree with that. i think ultimately we have a dynamic here where guy talked about the financial oppression that the fed has ushered on the world. i would argue this is since long-term capital. we could have a whole show about this and it wouldn't be enough but the market we have right now is a market where the fed will continue to be a fed put that's not how i felt until somewhere in mid-january with the fed really confirmed what they started to give you some detail on earlier. so bottom line, this is -- this is for the market to, i think, continue to have pain trade higher. >> i'll go back further than you. i think it's the '87 crash when they cut rates but that's why the market is pricing in a fed rate cut by
december of 2019 it's still at 27% probability. it doesn't mean it's going to happen but up from 2% just at the beginning of march to me tells you everything you need to know about this market. investors are telling you the fed will be dovish well into 2019, possibly into 2020 and the fact that the stock market has risen on that news tells me that's what the investors want, which is crazy. >> scent that mean how we started the show, are they out of bullets or the second part of that question, does the dove bring out out the bear and at a certain point you have to say the ecb, everything that they did, everything the fed has done really only paid off for x amount of years, and now we're left with a shorter stash of ammo and bigger problems maybe the market where it is right now, no one is saying -- >> but you always say and i agree with you, it doesn't matter until it does so we'll get information in the next two days to find out if it
matters. if the market sells off on fedex and a too dovish fed, then we might have a problem but if the market rallies tomorrow and we have bad news from fedex in spite of that, that's a bullish side just from a trading perspective. >> i know fundamentally and theoretically we should be challenged, we should have a lot of problems with what the fed is doing or not doing but the u.s. economy right now is probably clipping somewhere north of 2% gdp. companies that trade 10 times earnings, which isn't expensive, this is the market we have >> no, it's the second time in three months. >> i understand that >> so it's up two times out of three quarters. >> it's international, though, right? >> fedex has said it's international. anemic international shipping has been the problem so then look at what's happened to the market. you see those faang stocks, that's where you're going for growth because there's no growth out there. you've seen the rails, they have
done quite well because that's domestic that's what the market is telling you. >> so they're completely insulated from the continuing slowdown of macro economics -- >> the market is telling you what you buy -- >> it went to 3.4, 2.6 and the estimates now have a one handle on it if not a decimal. >> are we different than where we were at 2850 three months ago or whenever that was when we were assessing the same things, right? ultimately we were assessing those things in the context of a trade war and a fed war that was more bearish or more hawkish wherever we want let's argue we're in the same place because we were questioning global growth at that same time so the question is should you be selling off the market aggressively or should you be trading with the pockets of trading ranges that i think we have in front of us right now. >> it's the context of expectations, it's the expectations of, yeah, we know that there is a global slowdown that is different today versus october, which makes today's investing environment better. >> well, but again, it's
fluidity in global data. this morning we had a performance measure which came in stronger and i would argue we got up on global data. look at european stocks, they traded above the 200-day now you've got the euro stocks 50, so effectively a composite so fez is now above the 200-day since last may this is telling you that the market priced in a lot of really bad news on some level relative to itself, the delta is pretty good. >> to tim's point, it's lousy in europe, but the rate of change is getting better. although it's lousy, it's not getting as lousy as quickly. but in terms of our market, what does it mean and again i'll say it for with the 50th time. i thought the s&p would roll over for quite some time if you just go back and look where we are and go back probably september, october, and
look where we started to break down from, it's pretty much the same level so i would submit with a vix that was just around 12.5, to me that is a sign that complacency is far too great everybody believes the fed has their back i'm not so certain. >> so why not yuse that to buy insurance. we don't know what powell is going to say we don't know what's going to happen with the semis. but with the vix up 12.5, 13, why not buy puts against your portfolio and give yourself both options. coming up, as we mentioned, check out shares of fedex. the stock is sinking after reporting disappointing earnings the conference call is about to kick off we'll tell you what wall street is watching for. plus it is a streaming battle for the ages. netflix snubbing apple as it gets ready to launch a streaming platform next week which stock will come out on top? the traders weigh in. speaking of streaming, google launching its own streaming gaming platform. we'll tell you which of the gaming stocks could be the biggest winners and losers
we're live from times square in w rkity. much more "fast money" right after this how'd i get this yard? behind pete's great looking yard, is his secret weapon... the scotts turf builder program. it's the best way to get the yard you want all year long, guaranteed. all it takes is 4 feedings, with a scotts solution for every season. and with a customized plan from the scotts my lawn app, your yard can look like pete's. it's that easy. this is a scotts yard. download the scotts my lawn app for your personalized plan.
does your wealth manager a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org
the latest inisn't just a store.ty it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome.
welcome back to "fast money. netflix opting out of apple's new streaming service as a battle between the two tech giants heats up. the ceo reed hastings saying we prefer to let our customers watch our context on our service. we have chosen not to integrate with their service netflix is up 35% while apple is up 19% as apple dips its toes into netflix' world, we play a would you rather royale. netflix or apple, b.k. >> see, now here's the problem with this game i would buy -- >> the only problem? >> yeah, but i don't think you -- it's not apples and oranges, let's put it this way apple is a different company than netflix yes, they're getting into a streaming service but they're an iphone company they haven't gotten out of their own way for that for better or for worse. you know what, i'll go with netflix, let's go with that. the reason why is they're throwing money at this unless apple wants to throw a ton of money at it, which they
can, but have been reticent to do in other places, then i don't think they win the streaming wars. >> b.k., when you look at it, they're not all apple. i'm going to go with apple on this would you rather. it's $165 billion in iphone revenue is apple but they also have $40 billion in services revenue. so i do believe five years ago i agree with your statement. i think right now you have to go with apple on this versus -- one is growth, one is more conservative, so i hear where you're going. >> and one is a pure play on streaming and one is an iphone, services, hardware company. >> okay. so let's break down the would you rather into two components >> guy, this is either you or me we are getting into the deep end of the pool. >> the one for tim is who will win the streaming wars in that they have more subscribers than the other one in a year.
>> in a year, netflix. >> in two years. >> in two years, probably netflix. >> how many years before apple is the right answer? >> i'd like to have been given the early part of the game where i just say i would much rather apple. i would much rather apple for a couple of reasons. they're a hardware company, they have not a tv golden boy it's going to be an app on your phone and essentially a conduit from which you can watch other people's content apple has no content but they're developing some. this is a story about where netflix to me has enormous competition. we know about amazon, we know about hulu, we know about disney and now we've got another major player i do think apple will monetize this i don't think there's going to be anything exciting on march 25th other than look down at your phone you've got an apple tv app there it is, click it. >> they also have a lot of cash they could potentially spending if they wanted to in terms of
video -- go ahead. >> their history of these things remember beats was supposed to revolutionize the music industry who uses beats i never heard of them. i have a zoom. i don't have a history of it >> okay, here's the twist. >> oh, come on >> would you rather rather, netflix, apple or disney netflix, apple or disney >> in terms of the context of this game, the streaming wars thing. >> yes. >> so the new england patriots are the gold standard, you would agree, really? >> we're a one-hour show, by the way. >> the patriots come and play the knicks, they're going to get their rear ends kicked what's your point, guy i'm glad you asked apple and disney can't skate in netflix land they have a ten-year head start. reed hastings is so far ahead of the curve they're never going to get it done. apple should have bought netflix seven years ago like we said on this show a number of times.
so in the context of your game, netflix. >> so netflix is going to spend $4 billion on content this year while disney arguably has the best content out there or maybe it's now at&t time warner, i don't know but this is a company that's got a lot of debt, it trades at a ridiculous multiple. you still want to own that in the context where competition which we've known about for years is truly closing in. the pocket in your new england patriot backfield is collapsing. >> i even kind of understand that. >> it's a good thing that reed hastings has pocket presence and he'll stand in there until the last possible second so i understand what tim is saying, but they're so -- disney and apple are so far behind in this, they're never going to catch netflix. and i never say never, but in this case i'm saying never. >> for more on the streaming wars and who could be the big winner, go to tradingnation.cnbc.com i'm melissa lee, you're watching
"fast money" on cnbc, first in business worldwide here's what else is coming up. google launches its own platform to compete. we'll tell you who the big winners and losers could be. forget about the flowers and forget about your jewel. the golden gate city may have an all-out war with the vaping company. much more "fast money" after this you're searching for something more... ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in.
♪ to walk along the lonely street of dreams ♪ ♪ here i go again on my--- you realize your vows are a whitesnake song? i do. if you ride, you get it. geico motorcycle. 15 minutes could save you 15% or more. welcome back to "fast money. we've got an earnings alert on fedex. the delivery giant falling to the tune of about 5% let's get to kate rogers back at headquarters hey, kate. >> hey, melissa. fedex stock falling in the after-hours trade here the company missing on the top
and bottom lines and again cutting its guidance due to concerns over global trade growth the ceo said slowing international macroeconomic conditions and weaker global growth trends continue saz seen in the year-over-year decline in our fedex express revenue. this is similar to what happened last quarter when the company lowered its guidance and the stock took a tumble. you can see the six-month performance in the chart up on the screen last quarter fred smith said that while the u.s. economy remains solid, the company's international business had weakened during the quarter. he also said global trade growth had slowed point to ongoing deceleration which is echoed in the quarter's comments on the call which kicks off at 5:30, we will be watching for any further commentary on global trade as well as comments on the u.s. economy in a note today analysts from bernstein said they would be looking out for comments on the company's ability to put a floor
under its ground margins of course we will bring you any highlights as they come. back over to you. >> kate rogers back at headquarters so does fedex management have a credibility problem at this point? >> look, i don't know that they do they should know their business. there's some concern that tnt may be broken. there's some concern about margins. this is the second out of three warnings but let's face it, what has changed so rapidly they had a blow-off top on january tw26, 2018 it fell out of glass on one of those mornings and the rest of the u.s. market. so i point is sentiment in this stock is terrible. i think this guidance is in the stock. i don't know that it changes overnight, but i get back to we may bow a peak earnings for fedex in the short term but you've got a prauf multiptrough. this company is cheap. >> there's going to be a time to
buy fedfedex i don't know if it's tomorrow. the global economy takes a long time to respond to a, quote unquote, dovish fed or everything else that the stock market has responded to. the stock market is a bit ahead of this. fedex before they can get those international shipments up, it's probably going to be a quarter or two as a pure trade, if this trades up tomorrow, then i'd get more bullish on it. >> remember, they're doing voluntary buyouts for their staff. the last time they guided, they talked about reducing the network and that's costing them money right now. when you're shrinking, that's really a forecast -- >> that should be a bear sign for the overall market and overall economy. we haven't seen it really affect -- as tim said, you've seen fedex fall apart on a chart and it's been a counterintuitive to what you think the market would be doing under this. it's not oversold yet so i don't think you can rush in with fedex just yet but i do think that there's not a credibility problem. i think that they're just trying
to see how tariffs, trade, china, kind of work through. i'd be willing to give them the benefit of the doubt before i start talking about management. >> to answer your question, yeah, i think they have a credibility -- so this was the third quarter they reported. they just gave fourth quarter guidance or full-year fwied ague now this guidance is 1510 to 1590 they narrowed it but it's still as wide as can be. if you don't have visibility, why bother. >> what about the 7% earnings raise? >> why give guidance if you don't have that kind of clarity? that's my view i think a lot of people get upset -- three months ago, two and a half months ago they gave guidance and ratcheted back down. >> but there are reasons why it has to be wide. >> then don't give it. >> i get your point, but they're giving sort of a ballpark figure. >> that they can't meet either.
>> someone threw a stick in the spokes of the bicycle wheel of the global economy fred smith is one of the best ceos out there the fact that this guy is moving on the fly to actually cut costs and do some minor restructuring in the middle of this doesn't mean that the company is broken. to me this is a case of think about where we were nine months ago. global synchronized recovery oh, wow, everything is great the fed will have to move and cut three times in 2019. nobody thinks that everybody thought that nine months ago you can't tell me that fedex, which is as leading as economically sensitive of a stock as you have wouldn't spom to that. let's get the technical analysis on fedex and go off the charts with mark newton of newton advisers. mark, what do you see in this chart here >> technically not a good move in fedex after hours you see the stock down almost 5% to those not paying attention, you'll come in tomorrow morning and see potentially free overshyaove
overnight ship doung to 17wn to. all of a sudden you see a breakdown into last december we've seen a 20% bounce, yet this hasn't recouped the level it needs to to think that this group can outperform you've seen the air freight lagging, the airlines itself lagging on a monthly basis so this is sort of interesting when you look at a monthly chart. you have a 10-year rally in this the stock pulled back to almost an exact area it needed to right at $150 a share. this is a 50% retracement of the entire nine to ten-year rally in fedex. if anything, it suggests 150 is a key level. 167 initially is 150 you cannot get under 150 without damaging the long-term picture transports in general, same picture. not a great scene for the transpor transports, they have been lagging. a lot of that is the airlines and the air freight. we were hoping this would push
up but a move in fedex will be problematic to the sector in general. what is to like in this group? there is an area that stands out, the rails the rails have acted much, much better stocks like csx, like ksu, no, it's not kansas state, it's kansas city southern this area in general will be very, very important right near prior highs from late last year. if we can get above that, the stock should continue to show very good relative strength and outperform i would still bet on the rails i don't like the air freight as much or the airlines. >> technically speaking, mark, is dow theory still valid? >> i think absolutely 100% you have to look at things where does the transports and does the dow, do they tendi to move together when you look at swing highs and lows, those are different than what a lot of us look at but the dow is still very relevant it tends to move along with the
s&p a very high percentage of the time. >> mark, thank you good to see you. mark newton of newton advisers. >> $20 if you've got the k-state mascot it's one of the most obvious mascots in college sports. as in it's a very redundant mascot it's everywhere. >> what do you mean it's everywhere. >> there's other schools with the same mascot. >> a dog. >> wildcat fyi, trade school. >> the more you know so useful. he mentions ksu -- >> thank you the wildcat. so ksu is kmedomestic but it alo goes to mexico so when there was a skirmish with mexico, there was concerns there. >> if you recall, that's a stock that had a 70 handle at the peak of the whole u.s./mexico problem. it's rallied considerably since. if you look in terms of valuation, ksu is probably the
most expensive in terms of pe and is probably one of the better run railroads but you're running into trouble here at this 125 level that you last saw a couple of years ago quickly with fedex, fedex is 37% lower than its all-time high i think at 225 or something in the beginning of 2018. that's not an s&p 500 that's been a couple percent of its all-time high. you've got to start to ask yourself, is fedex a bellwether? if it is, the s&p is too high or something is changing fundamentally under their feet. >> i think the rails, to guy's point, i don't even have to go way back i'm looking at resistance just a couple of months ago i'm looking at the ones that mark just mentioned, running into resistance here it's a wall of resistance. it looks extremely double topee for me i would not be a buyer of the rails. >> if you look at the airlines, you're not going to be surprised that i think they're very cheap and at the bottom end of a range.
arguably there's been a litany of reasons why, but ultimately what we're hearing from ceos and their business, business class is alive and well. they're not seeing a falldown in their highest margin product it's really about capacity it's idiosyncratic stuff and i like them. >> i think the market is going after growth and i'm not sure the rails have it. i think in this particular market you're going to want those names that are asset light that can go after the growth, which again unfortunately is the faang and names we've talked about for 15, 20 decades >> speaking of fedex, this is an interview you will not want to miss fred smith, the ceo, will be on "mad money" tonight to break down delivery company's quarter. that is at the top of the hour this will be important to tomorrow's trade. plus google unveiling its gaming platform. we'll tell you how it could shape up the gaming industry as we know it stick around, much more "fast ne saiahd.ea ger measup? a cfa charterholder does.
industry josh lipton was at the game developers conference in san francisco and has all the details on the tech giant's big gaming bet hey, josh. >> melissa, a game platform for everyone that's how the google ceo is describing his company's big new push into the $135 billion video game market. it's a new game services running google's chrome browser and could up-end the traditional game market because it will mean that fans will soon be able to stream complex high-level games over the internet right to their phones, tablets and televisions. that means no need for pcs, no need for expensive game consoles, and google executives say stadia is a game changer. >> and we want games to be available to everyone, without the barriers or the limitations of the hardware that they may
have in thaeir home all you need is a laptop, a pc or a tv to stream to so you don't have to have that expensive custom hardware to get the best possible game experiences. and over time we think it will dramatically increase the game audience for everyone. >> now, google says it will launch this year the company isn't yet detailing the business model though, so is this going to be a subscription or will google take a portion of all proceeds spent on stadia remember, there is plenty of competition. microsoft we know is pursuing this technology, so too reportedly is amazon one company that moves sharply higher in today's trade, check out amd. google did confirm that this new service will use amd chips i also caught up with oppenheimer's andrew erkwitz his pointi was if you could
stream these graphics rich games any time instantly, that was a pig deal he did have questions, and one was are these big game developers going to buy into google's vision? are they going to partner with google even if that means giving up some of their game proceeds is that worth the trade-off if you could potentially reach that many more gamers around the world. >> is there any concern on the part of google executives that they're asking for the video game develop years outside of goog toll share their content in exchange for any money but they'll be competing with them by launching their very own studio to develop their own games? >> yeah, there's big questions for those guys one is you could reach that many more gamers if this is successful, but you potentially lose some real flexibility here. you'll lose potentially distribution power here and authority, you'll potentially also give up some game proceeds. so big questions here. what is the content, what are going to be the killer games
that draw people in. i did try to push phil harrison and he said listen, a lot more about the actual catalog, we'll have more about that later, maybe this summer, he said they are working with big developers, big and small. i did think on the content front it was interesting they are going to launch their own studio, so that's a big deal potentially here. >> josh lipton at the google game developers conference out in san francisco you just said before it's a big deal this is a big deal. >> i think it is a big deal. i have four children, two of which are always in front of the television fighting for air time they're on the fortnite crazy. and i do think this is the way to get in. google has not been effective in trying to get social into the platform youtube has been a screaming success, but i think this will really start pulling in some eye balls. i really think it's a win for google is it enough to counteract negative headlines that we see in the press right now about privacy issues no but is it something where i think they have building for the
future 100%. >> there's been a lot of negativity just in the stocks themselves you've had a couple of releases in the first quarter which were disappointing. but whether it's ea, take two, activision, they all hit the skids. there's been a major bounce the last couple of weeks in some of them and even couple of months in others. i continue to like activision because relative to their peers they're cheaper. they have a couple of big titles coming out late 2019, 2020 it gets back to with the googles and guys providing the hardware, it's a content game. what's going on in your catalog. at some point these guys become cheap enough where they are content for a big media company to buy. >> we were just talking about apple's tv streaming service, which is going to be launched next week. you made the comment apple is a hard way company would this have been a smarter move to apple to do given that it's a hardware company -- >> no, actually, because that's what we're trying to do is
reduce a lot of the hardware you have to buy these multiple consoles and you can't stream it so i actually love this move by google i think it fits right into what they do. they can pull some levers with some other parts of their industry and i would be afraid if i were at some point in time the big gaming companies, because to borrow a line from jeff bezos, your profit margin is my opportunity, and that's what google is doing. >> to use the parallel for netflix, are you as a studio afraid offed in flic ed inetfli? i guess you are, and is that metaphor going to hold for this industry >> i think apple -- instead of apple and disney trying to fight this land war with netflix that i don't think they can win, i think they're better to go and look at a taketwo at 19 times forward earnings would be a $15 to $16 billion deal. get into that space because that's where the tremendous growth opportunities are. >> maybe google could buy one of
those game majkers. >> you're setting up this parallel which could be going on in the gaming space where you have the legacy, conduit or distributors and it comes down to what are the games that the kids want to play. i agree, i think this is a great move for google. it's another lever, as brian talked about, for a company that has probably five different businesses north of a billion dollars. >> as josh just mentioned, amd surged today the semi conductor company creating custom chips for that platform option traders are betting if history repeats itself, one name reporting tomorrow may start the semi surge in its tracks mike khouw is breaking is down in san francisco. >> hi there. micron is reporting tomorrow and they're implying a 6.4% move on that earnings announcement that's more than the 5.6% it's averaged over the past eight quarters you may remember when they reported last december, the stock was down nearly 8%
you may also remember that the semi conductor index overall was down nearly 4.5% that same day that may explain one of the things that we saw today, which was more than three times as many puts trading in smh, which is the etf that tracks the semi conductor index over calls and one of the trades that i saw was a purchase of the weekly 107 puts, 11 th30 were bought for 9 cents so that's a bearish bet that the smh is going to fall. for people who are making a bearish bet on it, because the options premiums in micron are elevated, this might be a cheaper way to make that bearish bet if those correlations tend to hold up when we see earnings reported tomorrow. >> this is how good semis' quarter has been this is going to be the best quarter. it's on track for the best quarter in two years. >> in terms of stock performances other than micron has gone from 29.5 to 43 the stock has rallied 15% since the december we're talking about. then you throw in xilinx, intel,
amd obviously. but you wonder if the move is too far too fast even down to 35, the move in micron would still be pretty magnificent from the december lows >> when micron jumps and dram does nothing but go down, micron revisits what the trend was. so icron, d-ram is still running into the ground. i would say it's a sell signal in micron. >> thanks for that, mike for more options action, the full show is friday, 5:30 p.m. eastern time. coming up, check out shares of altria dropping as san francisco cracks down on juul and the city could be about to wage an ail-out war on the company. also the crypto craze is over, for now at least we'll bring you all the details. much more "fast money" still ahead. see that's funny, i thought you traded options. i'm not really a wall street guy.
what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item. welcome back to "fast money. check out shares of altria dropping after officials in san francisco said they will seek a ban on the sale of e-cigarettes in the city. let's get to aditi roy with more on this developing story
>> hi there, melissa the san francisco city attorney and a city supervisor says the fda has not done enough to curb e-cigarette use among kids so they want to crack down on those products in the city they just introduced a will which would prohibit the sale of e-cigarettes in san francisco and also prevent e-cigarette companies like juul from occupying city-owned property in the future juul is currently headquartered in san francisco however, if the measure passes, it would prevent juul from expanding its footprint on city-owned property. juul says we encourage the city of san francisco to severely restrict youth access but do so in a way that preserves the opportunity to eliminate combustible cigarettes in another development in the space, outgoing fda commissioner scott gottlieb said that that he met with juul and altria and he called the meeting, quote, difficult. juul had no comment on the
meeting other than acknowledgin it took place last wednesday one analyst from consumer edge said while altria has levers to pull, the regulatory risk in the u.s. is about long-term free cash flow, which is reflected in tobacco discount valuations. >> aditi roy in san francisco with the latest on juul. was this a mistaken purchase of a stake in juul given the regulatory landscape was so murky when altria made that 35% stake purchase >> there's some people who say they had timed this to a point when juul was so beaten down by the fda that now the pressure is off them it's not lost on me the irony of san francisco, which is pushing e-cannabis and all kind of other things you can smoke to me this is about regulation i don't think anybody wants their 14-year-old kids doing any of this stuff. to push a company completely out of the city, and california was
the hotbed of legalization doesn't make sense to me i own altria these guys have diversified into beer and wine, into cannabis, beyond cigarettes into smokeless and it's a cash machine. the stock is 36% off the bottom. it doesn't surprise me it sells off. >> i look at the other side of it you always look at europe and the international side, philip morris when you look there, it's a more liberal approach you would think it was a little easier against e-cigs, against cigarettes, but it's startsiin o run into technical resistance here so i think we're getting to a phase where these companies are hitting a wall of regulation where we didn't think -- they're trying to escape it and they're running into another one. >> isn't liberal approach more regulation >> yes, it is, but usually not in -- i agree with you it's a good point. but usually not in this, and that's why you made it an ironic gesture.
>> tim mentioned the stock has bounced from 44.5 to 57. 57ish is the level it really broke down from in the beginning of december so it makes sense we pull back here 12.5 times forward earnings, it's not that big a valuation so i think you get a shot to buy it but i think you get a shot to buy it probably closer to $50, which is where it consolidated last. >> i wait until this clears out. it seems like the sentiment, not just the regulated but the sentiment against e-cigarettes have really turned here and given the run, i think you just stay on the sidelines at the very least. coming up, it's the end of an era kind of an era, a short era. pulling the plug on bitcoin futures trading. if you remember the launch of this trading tool, that marked the top of bit coin. so what now? we will discuss. much more "fast" right after this
(clock ticking) (bell ringing) it's time. time for a new kind of cloud. the ibm cloud. the cloud that proactively protects your business from threats, instead of just reacting to them. that lets you modernize and move more of your apps without re-writing. that unlocks insights from all your data and puts it to work with ai. get a faster, more secure journey to the cloud. the ibm cloud. the cloud for smarter business. ♪ ♪
all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. welcome back to "fast money. the cboe will no longer list bitcoin. the cboe was the first exchange to introduce bitcoin futures back december 27, '17. by the way of the looks of this
chart may have marked the top. all of this comes as bitcoin breaks above 4,000 so we thought we'd bring the bitcoin bug back for this part of the show. that's the baller. so if that marked the top, is the end of the futures marking some sort of a bottom? >> you know what, i think we could look back on this and say, you know what, that was the bottom there's a couple of things that have gone on since the low in december you've seen the underlying fundamentals improve bitcoin was the cheapest its been since the bear market ended in 2016. we're starting to see address growth you're starting to see sentiment like this. this tells me retail traders are out of the future. so i think retail is exhausted you're starting to see sellers being exhausted and institutions come in. fidelity is a catalyst coming up in q2. i think all those things combined, we might look back and say, you know what, tin the
3,000s was when to buy bitcoin. >> when this launched it was thought this would be good for institutions as well. >> there have been other avenues that have come along for institutions custody has got much better so institutions can actually buy physical bitcoin both the lending side and the other side, the shorting side of bitcoin has gotten more robust so there's less of a need for futures contract. >> what about cannabis i know everyone says they don't take one from the other, but whenever i look at the charts, yes, it used to be gold and bitcoin. now when you look at the cannabis trade, the money that's flowing in there on a lot of these desks could have been > nt,in tde bitcoin as well. >>upex falras. for your heart...
-- lennar. >> guy. >> loved to have tonight's show. joe did a nice job last night but he is not you, and i'm just bringing that up because we have a few minutes. >> not really. >> symantec. >> "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. 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 make you some money. my job isn't just to entertain but to educate and teach you call me at 1-800-743-cnbc. or tweet me @jimcramer let's stop wondering and start figuring things out. after a day of the averages higher and then gave up their gains so if you started hearing a possible breakdown in the trade talks with china