tv Fast Money CNBC September 11, 2019 5:00pm-6:00pm EDT
strategic today. tomorrow you don't want to miss the interview with kevin plank and chief operating officer patrick frisk. that's tomorrow morning on squawk box tune in for that. >> definitely don't miss that. market strong today all much the major indices higher led by the russell up 2%. that does it for "closing bell." >> "fast money" begins right now. >> live from the nasdaq market site overlooking new york city time limit square this is melissa lee. dan nathan deny adami. breaking a while ago mushing hurd taking a leave of absence due to health. the stock selling off after hours. the conference call expected within the hour. we'll keep you updated as the story develops then if you didn't know sass stands for software as a source but could stand for software as source of pain hong kong stock exchange launches the 37 billion bid for
london stock exchange. we get perspectivy from one of the rivals terry duffy joins us exclusively here on set. but first, it's still on and we are talking about the great roe rotation so many of the desks have been skeptical of maybe even poopooing at times. showing tahoe strength here in sectors russell, banks, retail to name a few. what's making you a believer, guy? >> it's a fascinating question i mean the market has an uncanny way, not that i need help making me look silly. within a% of all-time high of the s&p 500. everything looking fantastic when do i become a believer? you know, i don't know the answer to that but what i'll say is the head winds haven't gone away that much yes rates backed up probably a healthiy move yes the gold market not exploding up
maybe the situation with hong kong has abated but it's still there. the market is looking past them. i don't know how to answer the question because the concerns i have i don't think it -- they don't get resolved in one day. >> i know how to answer the question like when the. >> nothing will make you a believer. >> very simple when the rest of maga naks a new high and apple is on the way to do that about 10 bucks from the all-time i'd love google and amazon to participate. knows are three and a half trillion dollars of maga cap you mention the russell i'd like to see the russell break above the seven-month range and get people thinking about maybe small caps digested the bad news and ready to go. knows are areas i want to focus on i'm not interested in alcoaia ralliesing off the five-year lows >> too junky. >> yeah. >> okay karen. >> i love to buy when things trade down integerp by selling
fop jp morgan calls, i do own something like a united rental that has obviously participated to the downside hard and back to the upside hard. i still it's attractive. fedex that we talk about a lot, no news what so far has gone from 149 to the whatever, 171. i like it higher than 171. so even though that one is up a lot i'll hang on to things like that the vix coming in a lot. i want to own volatility because we are one tweet away from going back to the markets that seemed to fresh in my mind could be any second we could be in them again. >> tim you've been onboard the rotation since you pointed it out. sort of i don't want to say it's a believer but you acknowledge the presence here. >> i do. >> give us your -- you're a fellow georgetown alum yorp rangers come patriot tell
him what he missing. >> move from on the 10 yooer the move on that was way too excessive relative to the fundamentals in the u.s. economy. maybe not to the global economy. and i continue to think that some of this rate dynamic was a function of pulling down in a relative value trade i do think some small this is not full reconciliation in hong kong has been important to set the tone wore at least regionally there is more stability into october talks that's important i'm not sure what with he get out of it. we have reaffirming offer the u.s. skierm. the services ism really the back bone of our country not a manufacturing reading. and so while we know that pmis go down around the world injury that's been part of the story. the most important from a market perspective is i think we have had the rotations many times in many cycles throughout the last two years. it's easy to say the market has
done nothing but i think if you look at where retail is. retail underperformed the s&p bip 20% for a year until it suddenly it makes that back up recently if you look at transports and banks, but the thing about it is that the valuations to me do make some sense. and we sat around here and talked about food stocks talked about restaurant stocks and things that were tough to explain. and i think the market's rationalization is that those things can only go so high and recession is off the table for the next six months. that's with a central bank at your back, that's been the justification and it didn't happen three days ago. this happened three weeks ago when the rest of the world started rallying relative to our fkt market. >> thanks for jetting us but do you think that was bullish when you have the cht of the united states suggesting that the fed should go to lower zero or negative or possibly lower. >> or negative. >> that incandescent elicits a lot of confidence in the economy. >> you are talking about psychology 101 i'm in the ap
economics class online here where you have a case that the macrodata doesn't add up to a market falling off a cliff with the state patrol banks being what they are. >> you mentioned the last two years the market hasn't done much because you ac nonld that we have seen lots of rerae are rotation the thing is here we are at 3,000 in the s&p fiechd. we'll make a new high. do you think we're going to 3030 and then straight sign-up you know, five, seven, eight%? no not particularly likely if you look over the last two years when we made a new incremental high we have gone down a lot we have. >> i don't think most of our audience is making a call on the market out so and so i think people are investing in stocks they are themselves rotating in and out. the fact gnat semis which i think have been an easy target of volatility and the volatility in that space has been ee nornlz but semis are about to make another fresh high and they're up almost now -- they'll be up 9% from june of 2018 when everyone said that's it that's it for semis. i'll take 10% and take ten% at a
time when people don't believe in the. >> you think ten% thp they've had two 30% draw downs that's does make you feel good. >> most people are not -- >> no they're not. >> invested in individual names. >> let eye of what. >> again, i understand statistics and i understand standard deviations and we are split up but to tell me that people should not have been investing in things that overall fundamentally their business -- zblees that's not what i'm say zblag you say because they went up and down a lot they were uninvestable in this period. injury most aren't trading like that. >> what's the flipside to not bleaching in the rotation. >> what's the flipside. >> if you don't -- if you don't -- no, no if you don't believe the rotation is for real. >> right. >> what do the markets do? >> they have been trading opportunities. listen i'm the first it tell you i thought the markets were going down sometime. i don't hide from it but within the context that have we brought up trading opportunities as a matter of fact a couple weeks ago we power pitched a
bank at a time nobody liked banks. >> citi bank did you that. >> that was pretty much universally poopped you used that word not me by the audience that closed at 69 today. within the context of being a non-believer there are opportunities. my only point is that everything that got us down to where we were a month and a half two months ago have not gone away. it's gotten clearer. at 15 vix to karen karen's point it doesn't make sense with the back drop that's out there right now. >> all right well the next guest says the value rotation can continue and new highs are coming with it let's bring in mark klon vick .from jp morgan always great to see you. >> thank you. >> you have a bunch of concept iks on the rotation. to answer guy's original question what has changed to make you believe the value rotation is here. >> well, first positioning is extremely low. if you look at the hedge fund equity exposure it's zero%le
close to all time lows in 2008 aa, ii it's same level at 2008. so a lot of bad things priced in the market positioning is low generally there is upside that's pure mechanics not even economics 1010. >> ap economics. >> that's something we can hold onto a low positioning. and then the you had some positive developments been mentioned already. you have a services in u.s you have a little bit on the brexit, a little bit on italy, a little bit on hong kong sar. and then you had this october negotiations so if- dsh we have two to three weeks before october where we still have a buyback full force when the vicks decline from 22 to 14, 15, all the sort of system faults will relever and you have discretionary investor basically zero invested in the market that's which we think it can continue now why the value rotation
continue people add to market? the first thing that will close is the shorts. net positioning is zero percentile but gross exposure according to jp morgan prime is 99% you have a trade where people want long volume and short value. if they want to increase the net exposure i don't think they are triple quadruple and software sufficient like that they close on the energy aboil and gas. some of the em, banks and other value stocks we think it can continue in our view until october in october basically you have negotiations anything can happen, right >> so if the negotiations blow up, we go back if negotiations actually produce some results i think this can last a full year like into 2016 and 2010 when it lasted more than 18 months. >> very strategic trade. >> strategic is until october. >> right. >> and in october i think we need to reassess if there is progress towards the trail twrad deal this this can be new 2017-
sorry 2016 age 2 plus 2017 can last another 18 months if the if more of the same, you know, missouri no resolution back and forth tweeting stuff like that then we go back to where guy tinks we go. >> we you say we could go back if there are stumbling blocks in trade do we re-test the ten year yield lows. >> yeah on the 10 year we already said most of the 10-year move was purely technical. mortgage rehedging entrance liability hedging ct going up to 500% on the long bonds and stuff like that. a lot of it was technical, not necessarily, oh we are going to recession next we can or next month. and what tim said when the services came out even the jobs number we're not going next month. who knows if there is no trade we may as well go in recession next two weeks i don't think we go in rezblegs marco, tim mentioned 10-year treasury
almost cut in half we know where fed funds is above 2% let's assume the data does stabilize. conversation around trade is okay what does that mean? are we seeing rates go back up quickly. >> i hope so. >> what does that mean for equities because there was a time everyone is convinced rates can go up and stocks go up at the same time. >> and they did until 330 or ten years. >> i think from 140 to 170 i think is all positive. probably to 250 is all positive and three like last year in april. at some point if -- but we are not yet there. far from there, right? we are 170 so sort of let's kind of think when we get there and if he with get there. but i think yields going higher is good for value and stock at this point now bonds and equities trading risk on risk off fed is cutting it's not as if fed hikes and rates shoot op off and sell off. every central bank is cutting. there is monetary stim laws. comes with the lag
hits the equity market with a rag three, four, five six months if with he bridge october, november, december we start seeing actually the monetary stimulus feeding in equity market you also see credit from inputs from china lass five or six months you see that feeling i think we are vulnerable in october if we blow up like august 23rd with the tweet but if these through an orderly fashion ideally some progress being made i think we can 18 months, right that -- that's like 20% out. so very poor performance like in what you mention raies russell is flat since october 2017 maybe last two days break that two years within the move. all time highs we really didn't move 18 months or abouts. we could breck out again if we have some normal sort of political environment, central banks are easing and positioning is pretty much close to zero >> marco great to see you as
homs jp morgan. >> compelling argument. >> very. >> the bulls are in charge right now. he makes as did tim make a very compelling argument. my only pushback is again things might have gotten better on the margins. but the problems we were concerned and and i was concerned about really vbt gone away and to dan's point you have the president saying we should be at zero if if not lower in rates that's to me problematic. >> let's get to the story we are following in the after hours session. oracle shares are down reporting earnings a day early with ceo mushing hurd announcing a leave of absence for health-related reasons. the stock is down 2% had been down by as much as 2% it's recovered a bit. what do you make of this. >> i think it's obviously after market and investors don't like these surprises. we hope that mark hurd is just fine but i think the results probably look okay. that was probably a knee jerk reaction it's important to remember that last quarter, the q 4 they reported is was good
the stock broke a all time high process you look like the value and the secular trends you probably like a oracle at $55. >> the team is pretty solid. katz is still ceo. >> coceo that's interesting rarely do you get sort of two, you know, a two of them are very seasoned obviously ellison as the founder. i think from that standpoint investors should feel okay about it i'm curious. i don't know what the duty of the board is, hoich information do they need to give you know this came up a lot when steve jobs was sick. i think the board handled it poorly, not good closure and then later more disclosure i don't know what the duty is. but this brings up a question. >> more detail around the related issues. >> right. >> and therefore let's not read too much into it is that the conclusion. >> i feel so. >> because they have to do in the overly compliant board
environment. >> where well i don't know what to playbook of it. i don't know the duty i don't know what they feel their duty is coming back to the orange point i do think you're in good hands with ellison and katz. >> we spent time talking about software failing and essentially the high growth stories that have been really the by-product of the selloff and rotation. occur sell not a high multiple stock. it's in the middle of the space i like it. >> guy, the. >> margin better than expected you can quibble over eps maybe a miss in revenue margining hang in fl the at 13 times the magnitude we saw at 20 minutes ago was over done. i think ellison and katz are more capable picking up the slack in the interim. >> they may manufacture eps growth but this is a low single digit sales groer and they need to make massive acquisitions every two years.
they are different buckets when we think about some of the software names that are -- a bit more exciting. >> coming up hospital stocks getting a boost but jefferiys has one chart spelling ill will for the group. plus apple getting a boost on the reveal of the iphones but there could be head winds facing the product that could signal the end. much more "fast money" right after this you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade,
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welcome back to "fast money. let's do a checkup on the hospital stocks. catching a bit in the past with shares much ten et health leading the group up nearly 26%'s the broader health care sector lagged this year up sus just 6%. look at the chart by jefferiys by the analyst what you see here is the blue line is the spread between biden and warren the spread between biden and warpen as that narrows or goes down, the health care sector xlv in the orange also goes down so as warren's cans look better health care stocks do worse. >> so now we are handy capping the potential democratic
nominee. i guess it makes zbleens it works. >> in terms of hospitals at a certain point this was a valuation story. we mentioned ten et health care before now you look at it in a significant downtrend back the last couple years. maybe it's time to take money off the table. then you go downstream along of the big cap farm iaaf names have been whacked nancy pelosi made comments recently i hear what you are saying if you are trying to handicap the election and overlay the stocks it's hard. i would say certain stocks are cheap. biogen is cheap. unh still too chief and the sell off in pfizer is overdone. >> if you look at ata, the chart even with the volatility is sideways on a slightly downward trajectory that guy is talking about. we have done this every political cycle. so you really have to look -- up -- second quarter numbers slight miss. people were more concerned about the credit dynamics within the sector some of those fears have been
alloyed. i don't think you have to rupp out and buy the stocks if you think the headlines are the koermgss those aren't going away. >> not only going away they're getting worse. i think that i don't know that you know -- they probably bought them before the resolution of who the next president is going to be. but i feel like we have time stween now and then i want to stay away for a while. >> it's a sector buffetted by the political winds let's say. >> yeah, it's funny, i think back to 2015, '16. dwas both sides a bit of both sides. seemed like -- it's a very popular bipartisan issue we can focus on the dem nominees that will may cause volatility or express suppress it. if you look at the xlv i'm looking at it four times over the last five years there's been at least -- four 10% plus peak to trough declines you get sole offs from high and you get the opportunities. a lot of these are cheap talking about value.
these are names you want to buy when you go the blow ups i know you were talking about pfizer and bristol some of those single names seem -- >> the debate where all the dems on stage tonight >> can only imagine. yoend -- you the blue line that represent the warren view and. >> the blue line was spread between warren and biden, the front runners. warren advances. >> my guess is those things crisscross every zbleebt could be. >> based upon the political winds and support there. >> for more on health care and the earthquakes head over to cnbc.com here is what else is coming up on the show. restoration hardware up 20%. time to redecorate your portfolio? plus in the aggressive move hong kong stock exchange makes a $37 billion bid for the london stock exchange we'll get a take from one of the largest competitors. with cme group chairman and ceo terry duffy.
welcome back to "fast money. check out apple get agonize boost off the back of the big event yesterday. touching the trillion dollar market cap in the trade. they went in on the newest slate of products. no less than three brand-new phones but there are plenty of question base whether they are fill the gap until fiechgt. josh lipton in sflis with more. >> melissa apple announcing a trio of new iphones. faster processer longer lasting battery pb better camera did they offer enough for consumers with the new phones to keep the iphones franchise at least basically stable for the next few quarters until 5g hits,
as we expect next carrier. d.a. davidson says yes he projects low stijt revenue klinec decline one surprise was the price the iphone 11, the successor to the xr $50 less at $699. that was the right move forte argues because it's a mature market and it's a way to encourage people to upgrade. even as the iphone franchise faces challenges bulls like forte count on strong performance arbor from wearable. process apple announcing a new watch for the series nine and the series three costs 199 jim kramer saying today that price point will explode the watch. he thinks we are seeing more buyer. then the services gaming service, apple arcade costing $4.99. and apple tv plus cost the same. and apple is going to include one year of the streaming service with new hardware
purchases and a note to his client bernstein called the bundling strategy clever saying apple tv plus could reach 200 million apple customers in the first year melissa back to you. >> thank you, josh investors may not be totally sold on the new batch of iphones. but analysts love the 4.99 price tag on apple tv. should gain a initial audience and gives them a competitive advantage over other streaming services and bundled for a year with any iphone purchase with no 5g until next year is that the main incentive to buy one right now? dan? >> listen, i think we learned this from disney earlier the pricing of theirs. if you come in half the price of the average netflix subscription plan it works. so that's the sort of price point where you don't have to think much about it. and i think to the point that josh made, they're going to upload millions and minneapolis of users who just buy a phone in year, and get them on there.
that's the most important thing. it's a sticky product especially if you have apple. >> isn't that the power of the installed base. >> totally. >> this is the first time we've been able to say for a billion and a half you get it for free or maybe not the full installed base but that gets people on this it's not even that it works. what it does is it rerates the stock. whether people are actually excited about this or not. >> this rerates the stock. >> it is look at the move. >> the strategy. >> what was there in the last 24 hours out of the announcement that people didn't expect. >> i understand the stock has gone higher does it stay higher and merit the rerating it got. >> i think it's reminding people this is not -- they're not owning it as much for the hardware story it's for the bells and whistles and things slowly coming forward. again, this is the same momentum call analysts have been off sides on this. >> we got breaking news on smile direct it has priced ipo leslie picker on the phone with the details
leslie. >> hi, melissa according to a source familiar with the matter smile direct club pricing the ipo at $23 a share that's a dollar above the range. that we imply a 1.3 billion-dollar offering size and an 8.9 billion-dollar valuation. if they are able to trigger the green shoe and sell 15% more stock in the ipo -- which would take place if the stock rose, after that stock started trading, it would be the fourth largest ipo listed in the u.s. this year. so smile direct club pricing at $23 a share. a dollar above the range the stock will begin trading listed tomorrow on the nasdaq. back to you. >> all right, thank you. so again, smile direct above the range and it's priced $23 a share. i don't know why i want to go to you goo. >> you know i'm making fun a british jek and say maybe they should go to the address in the
the uk and they would be crush going but i'm not going to say that >> right. >> we have seen other names in the space with a rough go if the good for them for pricing above the expected price good for the nasdaq for getting the listed we'll see how it trades. >> this is a stock with not that much competition. >> no, they don't. it's also -- this stands out by the fact that this was a stock priced two weeks ago at 2050 in the midpoint at a billion and a half they're 10% over the level we haven't seen that in any ipo environment recently. >> there are some regulatory risks to this. apparently some orpgt do nottistis say not everybody is a suitable. >> could we have guy try this out and we'll. >> a taste test, right. >> yeah six months -- is it a six-month see when when i was kid we didn't have money and didn't get braces like the rich kids from scarsdale and stuff. this would be a new experience. >> they didn't have braces.
>> only perfect pearly white. >> they just came out like this. >> can we go back to apple. >> you want to button up apple. >> i think apple deserves a conversation got your antennae up a bit because the stock is rerated by the streaming service. i guess the point i would make is it's moving you closer towards apple prime, right and so this whole bundling of all the services and some services we can't put a number on apple pay but it's useful keeps new the ecosystem. the more things they can do that aren't costing a ton of money the way it costs netflix to create original content, i get what you say 100%. >> coming up, the chairman and ceo of cme group joins us next, weigh in on the global exchange grab and what that signals for markets everywhere and whether or not the cme is interested in making a bid itself. much more fast right after this.
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welcome back to "fast money. the hong kong stock exchange making a $37 billion bid for the london exchange. hong kong execs say it would be a connecting trade between the east and west. joining us to weigh in is someone knowing a great deal about exchanges because he runs. let's bring in terry duffy
chairman of the cme group. >> i'm a big fan of your show and your hosts here thank you for having me. >> thank you for being a loyal viewer what a do you make of the deal and the cme group is it tempted to enter the waters? >> well, first of all, it's a very full provides as we say in the business you got to realize that the price gnat hong kong exchange came out with is 22% on ton of the deal announced that would maki it a 42% to lse's originally price when it came out. a very, very rich offer by hong kong on this transaction you know, for cme i've been fortunate to put many pieces of the puzzle in place which others are now trying to compete with on that playing field whp. when i did the board of trade in '07. new york merkel tile in '8 i'm focused on the growth the business and completing the next transaction, and the nex in
london in november we're integrating. i tell people i'm forecasted on interrogate basing that business and growing our. interest from cme perspective we are pleased with what we have today. >> correct me if i'm wrong about tu but it sounds like you wouldn't make a competing offer. >> we don't comment on that to be honest. i feel about the business, i buy things that are compelling for my clients that are users of the marketplace. and that's why the next transaction -- nex transaction was compelling for the userers because you have the first time cash treasuries alongside the largest futures exchange treasury platform in the world largest ebs alongside of cme's dpchlt fx flafrmt you don't see that in any other exchange that is kpemg i have to ask you what would be compelling about lse when you look at what they have today they have the lch, the london clearinghouse which i assume regulators would have a big issue with me trying to i choir
that looking at other businesses they had the frank russell business which is a good business but i signed a 10-year deal to exclusively trade with the product. you have to say the cash exchange business is left. as we nope we are very much not involved in the cash trading of the products so you never say never to anything but i think i clearly outlined baier our business plan is. >> in terms of the blueprint for what a cme acquisition could be, how should we think about that what areas are there geographicy was technologies we should think about. >> you got to look at your client how can you make your client more efficient going forward and if you can make your client more efficient you should make that acquisition because that's that pays the shareholders i tell my shareholders you a the time you last person you want to see is me you want me with clients. i'm focused on working with the clients, checking needs. i i had twraded for 23 years in the marketplace i have a good understanding of the market. i know what clients need and i want to make sure i can provide that where others can't.
that's wherible the scale works. you have to look around spurms and technologies and others. >> terry going to cme specifically coming off the best august average daily volume up 53% year offer carrier understanding this august was different than last what do you attribute the growth to can it sustain it's disbelieve it's hard to predict the future volumes but it's not only the biggest august we have had, the second biggest in the history of cme. august is traditionally slower pch because europe goes to sleep. that's long gone what you can attribute it to when you look at we've been talking about rates. you talk about rates all the time people are trying to understand what the rate market means. and just because rates are coming next to zero does not mean you will not have interest rate exposure. you could take rates negative as long as they move in the negative you have some rate suppose yur because different prices on different things unless credit cards went nchgt i don't believe that's the case.
mortgages in dmarng went nchgt for one person there is rate exposure out there. and we saw positioning in the marketplace to do that you get the efficiencies of the swaps, the dollar dmated swaps coming in the interest rate poefrmt. you create the extra $3 billion in majoritien very attractive proposal and you saw that movement coming through the month of august. >> would you say that the month of august being such a stellar month was because of the rate volatility and if that dies down then do you not repeat that. >> i think it's hard to say because we trade multiple asset classes that's the beauty of the cme model. people talk about the vix. i heard my friend karen talking about earlier about exposure to the vicks for volatility reasons. the vix you all talk about is the basically the equity volatility you are referring to. the vix in and of itself you look at volatility in other asset classes whether foreign exchange ob energy, we trade all the products so that's what's attractive about cme. you have to understand volume at this time today is measured
completely different and when ifers grew up in the business knowing my friend guy adami over here. the sell tolerance for volatility is different. when you have movements like in matejplace people dismiss them they won't in certain things but right now they are dismissing the volatilities. i think they are pricing a bit different than historically and they're pricing in equities only not taking the rest of the spectrum into consideration. >> you must have heard of jp morgan volfefa index. >> i i haven't. >> it tracks trumps tweets. >> i did hear of that. >> could there a be aed product tide to that zboo not at cme. >> just was going to ask. >> terry great to see. >> you thank you very much appreciate. >> come back any time. >> terry tough duffy. >> he makes a fascinating point. because we focused most of the show on equity when you think about the volatility in all the other asset claeyss and the futures of
the asset classes are trading and that's why the stock has been a rocketship three straight years. what have we seen in 16 and 17 fixed volatility currenty volatility. >> we spend time talking about that volatility. >> what i hate orp as a long investor it's delightful for you, right, yeah, so we'd be decently hedged i guess. it's been an amazing story sold off the last couple of two, three sessions but what a great run excellent job. >> yes. >> simply derivative on the derivative markets that they trade. these guys there is a battleground over data within the exchange community too s in incredibly valuable asset i think is becoming some way people look at the valuations of the companies. >> it's amazing how often we get the email from terry mid-show. >> it's incredible. >> something. >> i say it you will a the time. you'd be shocked who watches. >> i never get one guy you get them all. >> full disclosure i've known terry for a rung time we were in the same world for a lot of
years that doesn't mean he is not a great ceo in the united states doesn't mean the stock doesn't go higher just because i like him. >> there is a mutual love fess the quickly on cme yes expensive sold off 8% the last couple trading sessions you got to buy the stock again. >> coming up a number of software stocks slammed today. dan nathan says this could be the start of more pain for the space. he will explain check out shares of aurora cannabis burning out off the earnings release breaking down the results and what it means for the cannabis craze. much morp "fast money" right after this dlifrpg alpha, the most important investor summit nine years running. strategy from leading althat generates. direct access to policy makers and government leaders on september 19th, who who calls the shots now. go to delivering alpha.com to attend this year's blockbuster event. >> you will come away with ideas that you can put to work
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welcome back to "fast money. time for buzz kill software as a service stock. sass and dan says cracks are appearing in a few more names. sass cracks. >> you like that this is interesting. z scale we spend a lot of time talking about the ipos come to market now np talking about the lack of the profitability. talking about the growth and the multiples investor are willing to pay but here is one for last year. down 20% on the disappointing outlook. now down about 40 some percent from the all-time highs made a couple of months ago i think these are names you want to keep an eye on because they speak to investor sentiment in a which. there are some others. we saw the slack ticker work, that listed through a direct listing back in june. that's also down 40% below its highs right after that listing broke price earlier, you know once they break price it's hard
to get back. not that it was a traditional ipo. but there is other names out there. i think it's important to look at these for sentiment i'll take a step further look at service now. look at workday down 23% big market cap companies, the companies that have do profitability marginally on an adjusted basis on the gap basis they do not but these stocks are selling off. :keep an eye on the names. the last is the big ka hewna ogsass salesforce, right, karen? this one. >> the og. >> the og. >> what's the og. >> original gang sister. >> the original gangster. >> you know that buy. >> of course he does. >> he also knows the goat. >> greatest of all time. >> the goat. that one is not gotten above its post earnings pop from last month. this is a group you should focus on watch the price action here it could be a leading indicator of other names. >> in goes back for the retation we are talking about in terms of out of high valuation stocks. >> you got to workday quarter and i think it was september 3rd
not a bad quarter. margins were better. beat on revenue, beat on eps but people said wait it's trading 80 times forward earning in this vitamin unsustainable. which is why the stock came off significantly. i think it has further room to the down zblood just in this rotation, i mean, value was so undervalued and then growth at any price literally any price like a mongo, twilio, roku, your whole list of them, the sass crack list, i like that very much i think even if the market -- if the market goes down or up succeeded see that rotation trade happening because it haddy verged so much. >> cannabis feeling the heat in the after hours session after reporting earnings so it was a 9% move last check tim what do you make of it. >> trying to go through the numberings on the revenue line it looks like a report in canadian dollars if you get the report in canadian dlarps you they got it at 100 to 107 in the middle of the august which would
have been strong numbers that was at the time considered optimistic look, the bottom line for the entire sector is although the top line is good it's about the profitability and we need to see gross margins for this company which if you look at some of the u.s. names that have announced the last two to three weeks. gross margins between 40 and 55, the ebit iaaf loss was slightly better than expected based upon the top line revenue miss which frankly if they can't guide correctly three weeks earlier and they're this far off the map that's also a concern. right now going through the numbers, the key is that aurora is one of the two biggest players in the biggest legal federal market in the world, whether you believe that's the place you should be investing or not. and the valueses are inflated relative to the size of in re market, really what these guys have been doing. that's why you get the reactions when the stocks miss. >> speaking of earnings heard broadcom gearing up to report offer after the bell tomorrow. the they bet the semi stock surges on the results. we bring you "options action"
next jim breaking down the big moves in tech today. more on that at the top of the hour on mad money. live at the nasdaq market site re saresque. mo "fast money" the right after this insurance, so you only pay for what you need. i wish i could shake your hand. granted. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ - [spokesman] if you've tried colleg(group cheering)shed, snhu lets you transfer up to 90 credits toward you bachelor's degree. - [woman] it doesn't matter how old you are, you can do it, you can finish. - [spokesman] finish your degree at snhu.edu as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree,
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. welcome back to "fast money. chip maker broadcom gearing up to report earning tomorrow options trader betting it could surge higher on the results. dan breaks union the action. what are you looking at. >> interestingly the implied move in the options market about 5% for broadcom that is in line with the move over the last four quarters i wanted to break this down quickly. two times average daily volume today. we talk all about implied movement and i think here is a good example how we figure it out. you would take the weekly at the money straddle pl what is that in barack obama com here in take the weekly at the money 2.97 and a half call. officered at $7 today. 2.97 that's $14 that's the straddle if you bought the implied move between now ant friday close you would need a $14 rally to the upside or decline to the down side that's a wide range if you think about it but in line with how it moved the last four quarters let's go
to the kmart quickly obvious willy it's been in an uptrend since the lows this year up 17% on the year but interestingly, massively underperform the sm plachlt abthe etf tracking the semi conductor group up 37% there is the overlay of those two. tim said earlier the smh loolkts it's about to break out. broad kochl mass a way to go one of the reasons for the underperformance any brought semantics enterprise busines here they've been aquis i have the last few years that's maybe keeping wraps on the multiple for now. >> the levels dan points out 3.18 was the previous all time high in april. given the parameters make it runs at those levels and tops there. i think there's a good chance we make a run given the environment we see but pull the rip the order at 318 idr pgs ohs action tune in fray 5:30 at 5:30 eastern time up next, the final trades.
i don't know what's going on. >> announcer: "options action" spopserred by think or swim by td ameritrade. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪
liberty mutual customizes your car insurance, hmm. exactly. so you only pay for what you need. nice. but, uh... what's up with your... partner? not again. limu that's your reflection. only pay for what you need. ♪ liberty, liberty, liberty, liberty ♪ time for the final trade let's go around the horn tim. >> hi. talk about verizon talking about
teleco i think despite a at&t had the rally some spills to verizon. the core business is a live but the media business has more value than people hink. >> hi this is going in the best of tim reel. final trade, oracle. injury it's down tomorrow but if it's down a lot more down i think that nan $2 now it's an opportunity especially if it's down on the mark hurd news i think it's a great company not expensive. >> dan. >> yes, the apple plus pricing not only hit netflix but disney yesterday. that's one as we get into the fall you see momentum about that story. to me i think you can by that here and i think you want to use a 130 top is to the downside near term. >> guy adami. >> aren't you a terry fan one of the great "fast money" guests. >> a loyal view sfleer a loyal viewer >> great day to have him on. >> great day lyft i understand some of the headlines have been negative but you are getting decent news out of california. the quarter was good, back three
or four weeks. lyft. >> that does for us we'll see you back here tomorrow at 5:00 jim cramer begins in a few moments. before we go we'd be reremiss process we didn't mention those lost 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 help you make some money. my job is not just to entertain but educate, teach and put these games in context call me or tweet me gently after a good day tech finally seems like any of this out