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tv   Fast Money  CNBC  September 18, 2019 5:00pm-6:00pm EDT

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economy. just the adjustment in rates to engineer a soft landing. some day the the next day after the meeting you never know if the response after the press conference was the the lasting one. >> but that's usually the negative reaction gets turned into a positive. >> often can you swap it either way you're right yes. >> thanks for watching that does it for "closing bell." >> "fast money" begins right now. live in the nasdaq market site overlook new york city times square this is "fast money. i'm melissa lee. traders are tim seymour guy adami. u.s. home building surging to 12-year high but with uncertainty gripping the markets and recession looming could the proverbial wolf blow the house down roku sliding 14% today we explain the plot twist, the screaming wars the fed cutting rates by a quarter point with the members divided on further action this year despite passionately opposing opinions internally and externally the markets ended mixed on the
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day. did chairman jay powell thread the needle. >> thread the needle let's put it this way. when he opened the door to another round of quantitative -- dsh another round of getting the balance sheet back up to where it was, to me that was the reason why the market, the dow went down 170 to base cheh unchanged on the day in that regard maybe he said what the market needed to hear in terms of myself, you know, sometimes you have to be -- you have to be confident in views. but there is a fine line between confident and dog mattic i've been bearish month and a half two months. but when you see price action like monday where i thought the market would be down at least 300 dow 35, 40 s&p handles down 10 you have to sat some point say the market seems to want to go higher >> grasso. >> the only concerning issue is what guy said, the balance sheet. that's concerning. and the but if you were in the camp where you wanted lower rates. you got it if you were in the camp you didn't want extended lower rates
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you got that too it was a little bit of everything for somebody. and i think the mechanic does move higher from here. >> yeah, rates even moved higher today, which is extraordinary. >> yeah, i mean from the perspective of the equity market i think the fed nailed it. he did -- he did everything he needed to do and you know as cautious as you want to be to guy's point, if the market wants to move higher in light of all the things you create as a bear case then the market moves higher. you look at stuff like the banks going higher you look the cyclical going higher all very positive signs for the market and i think it's really important the fed did say, listen if the data turns down we are going to be there with very strong response. and not only that, we understand the repo market was a mess we will increase the balance sheet if we need to. from the perspective of equities you got everything you wanted. >> isn't that exactly basicallically what he said at various other points, we'll be data dependent and do whatever
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it takes it's not any different what is the lens threw which we view the chair today. >> relative to market expectations good question. if you think in august s&p, sfiftly lower and a hawkish caught what did the market do in to do is a victory for a market getting another fed meeting out of the way i know it sounds insignificant aggregate is the 19.5 standard deechgss below where it should be when you have all kinds of measures of at least positioning that say we are overth bonds, the market was interesting for the houks it's tough because he didn't talk about the need to justify another cut. there wasn't a lot in here for people that's why i lean towards more hawkish even though the dahms with the money markets and what people can interpret you have a case where i actually think the fed is probably more divided than people also think i know that wasn't meaningful today. but i think getting into the december meetings, et cetera, i
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think that's important but make no mistake, and it's interesting because i hear on this desk people willing to throw applause towards the fed and that's not something we've been getting >> yeah, i think you have to with the reaction today. who knows what happens tomorrow. made maybe the trade war increasing but if you look at the market today, the markets prices in movement on trade war a federal reserve accommodating. >> i always ask this question, how do you short a market where you have trade war in the back pocket we talk about this a lot with don't fight the fed then you have the trade war and then you have a dull market so you don't want to short a dull market. you don't want to fight the fed. and you also have a trump card in trade war so it's almost impossible to the. >> haven't we rallied on trade show i got the sense -- i get the sense that actually the trade in your back pocket is something that probably three weeks ago we got a lot of that when they said we are get back to the table and not as divisive and ultimately none of us expect a formative
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material trade deal anyway. >> you just said it. you just said many of us don't expect anything formative or substantive. so. >> and i still. >> zproo can't be in the market yet. if we all are not expect sfwloog you have to be long no matter what. >> you have to be long until you get the trade deal then i think that's the top in the market because china will never be as good after the tradedeal because they are giving up something by the nature of a trade deal and the u.s. doesn't have it anymore as a variable or a tailwind so i think you have to short the market once that trade deal comes out. >> i have to argue with that it's hard to argue with it i know you talked about it last night i'm certain on but oh. >> where were you last night. >> i was stuck actually on the helix of the new jersey turn pick i put it on video with you which you're more than happy to view. >> i was concerned. >> friday night. >> i didn't know what was going on. >> ufrpt series of events. >> anyway. >> by the way, the roadway
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shakes when you stand on it it's quite actually -- it's sort of alarming. >> disturbing. >> i would think >> hear that. >> it's hard to argue with being long the market. >> listen u.s. steel down 8% federal express down to the side they've done it to themselves you can say. but that's squha of a barometer how it's doing and does the fed have our backs? maybe it's that simple i find it hard to believe that it works out well. tloeft for today it did. >> do you feel like we're getting the glimmers of how we set up for the fourth quarter of last year in terms of the earning warnings coming out so far. >> nothing changed i mean, in terms of warnings they are all -- again, earnings have been going in my opinion the wrong way. but you get the multiple expansion which maybe makes sense in the light of rates lower and the fed having our back. >> but there is the rotation that has gone on with the acquaint quake last we can from
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momentum into value, rotation into cyclicals >> acquaint quake. >> it's like -- similar in 2007 we had a acquaint quake. >> this is different though. this is kind of more of a rotation ou out of the moment name, the recession names. what i'm concerned about with utilities and into cyclicals let's think about what does that market say the market says even if we have a recession it will likely be shallow and the fed will be there. and that's what this rotation is telling you. whether you agree with it or not that's what the market is doing. >> that's what's difference about a year ago setting up into the fourth quarter. i don't think the market a year ago starting to get concerned on credit concerns had any idea the fed would pivot this low talking with the implied pe on market preponderates lower mean the pe multiple goes higherer the expectations for fourth quarter earnings are awful right now. we went from -- looking at 15 to 20% eps growth a year ago to
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2.5% where everybody knowing most is supported by buybacks and other things akreeft kreetive to eps. it's all about positions i would go to where equity investors were a year ago is a confident place. >> lower rates and lower expectations this time around prevent thatkind of selloff even if we hear the avalanche. >> i agree a fed that will be there and talked about risk in the context of the market, that's the thing that they talked with being there for. >> isn't that a good -- aren't those huge differences between last year? isn't that why we shouldn't be worried about fedex and u.s. steel. >> yes, that's why you shouldn't be worried but you should be worried. but at a certain point it should matter it shouldn't be as easy the market goes higher because the federal reserve has our back but maybe it is that simple. but at what point does that end? and at what sequence do does that come with i can't believe -- it can't be that easy. >> maybe the market didn't get
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exactly what wanted but yields if banks shot higher after the decision to cut rates by 25 basis points and that's exactly what our next guest said would happen when the biggest bubble ever finally bursts in the bond market. now what bta managing kwrt .julian emmanuel great to have you. >> great to be here. >> is this it? bonds it's over, the trade oh is over. >> reversed. >> we burst. we burst if you look back at august going from 20 li 2.0 a in the 10-year and 1.45 come in the day after labor day get the appropriate supply response with literally record corporate issuance, dwoft issuing debt to finance the ballooning deficit, and you know, essentially the realization if you look at these economic surprise indices they are sky rocketing in the u.s the data is better than everyone thinks it is
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from that perspective yes we think the bubble has burst and we think if you look at today that's probably one of the single biggest factors that essentially, a day which we didn't think the fed did as well as others might have today -- that stocks held their own and bonds held their own people own too many bonds. >> why do you think the fed didn't do as well as other people have said because, i mean, last fed meeting was a disaster i mean often times when he opens his mouth and goes off script. >> off script. >> um-hum. >> it's a recipe for a selloff we've seen that many times. >> well he held the script that was good. >> he actually was reading off paper for a lot of it. >> and that was good but the point is, you know, the dots have taken out any even sort of like risk management sort of one-cut expectation. you know, the market still believes there are going to be cuts you know, and you raised your
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economic forecast for 2019 and 2020 when everyone else is taking their numbers down, which is surprising. and then on this whole issue of the repo and the funding and the liquidity of the last few days it seemed a little too sort of trite to us to say, yeah, we recognize it's an issue but we'll be able to take care of it and oh, by the way, it doesn't really matter to monetary policy and to the economy and we would say, you know, tell that to friends of mine who know nothing about the financial markets and have gotten, you know, in their inboxes this thing about the repo the last couple days and calling me asking what the heck is this this matters with regards to confidence and confidence turns market down when it turns down. >> part of this money market problem that we had was because there was too much supply of debt out there, right? and so if the bond bubble has burst and the corporations are still issuing and the u.s.
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government is still issuing when does that become a problem for stocks right now it seems okay. but i imagine at some point you can't absorb all in debt and it becomes a problem for stocks. >> well, again if you go back to the last couple years it doesn't necessarily become a problem for stocks until you get substantially higher in terms of yields the stresses that we have seen were sort of really much closer to 3% than, you know, 1.75% on the 10-year yield where we are now. i think it's much more of a function of you know the market is expecting a deal of some sort the market is expecting some sort of reasonably neat resolution to brexit iran, we have already sort of shrugged it off the last couple days looking at the energy market sometimes those things don't turn out perfectly we would say locking into the election year, politicians, incumbent weather whether the house or anywhere else are ensuring there isn't a
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recession. >> a bursting of the bond bubble is not a problem for stocks. it's not a problem in terms of yields going higher until we're more like 3% which we are far off from right now. >> right. >> what does it mean for the view on equities. >> our view is if you look at 2019 it's been very interesting in that the underperformance of small caps relative to large caps have literally followed 10-year yields tick for tick essentially small caps being sort of less liquid on on balance and the place people fear recession, small caps lead the equity market higher in the fourth quarter any also tend to seasonally as well look, our price target is where it is basically 3,000. so from our point of view the trading range hasn't broken either way we don't necessarily think it's going to in the immediate term but small caps have been underowned, underloved just like financials, just like energy and any will eventually lead the
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broader indices high sfwleer so julian you touched on it in the beginnind snuck up on everybody when we had quantitative tight inning and they didn't realize it was raising at every meeting now another qe round or using that balance sheet, and see just throwing in the white flag, that it's all over and we are 17% of gdp on that balance sheet? >> well, look, the rules have been rewritten over the last several years. and you know, like it or not, central banks are, you know, perhaps an kmurchl player in the financial markets. but we haven't had an accident yet. and the assumption is is that we will continue to potentially not have an accident that's certainly what the market is saying. and the way we look at it if anything the last several weeks have been good because the ecb and now the fed are telling you that there need to be other ways of keeping the economy moving forward, whether fiscal stimulus from germany ors rchlg the trade
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war. the message today was fix the trade war in our view. >> julian thank you so much. julian emmanuel of btig. quickly on small caps? >> iwm we talked about the line in the sand being 145. it held spot on and rallied now i think it's 156 closed lower today not a big deal pl. i think small caps have led. the fact they haven't made ha new high, despite the s&p is effectively there is can concerning but again i've tried to bring up the bear case on dozens of different ways and none of them seem to hold water. >> if you look at what rallied above where it was before the fed i think the most impressive are semis. and banks. banks responded as we talked about that, the cyclicality in here i think is very important semis which people have been trying to push down and say they can't make new highs i think that's probably the most extraordinary move today. >> i love the call on the small caps for two reasons one because they have regional banks which do better when you get a steeper
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yield curve which looks like maybe we get something like that and secondarily they're undercovered and underloved because of a lot of things that have been going on with research on wall street you get in kind of whip saw effect and so i like that a lot. >> coming up, home builders looking sturdy over the last month with the rate cut what does the outlook look like plus jp morgan ptac strategist says brace yourselves because more rates cuts coming we're live from times square in new york city. much more z ghafr isfmrit teth
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welcome back to "fast money. at&t shares rising in the after hours session. julia boorstin has the latest on the develop story. julia. >> dow jones reporting that at&t is exploring parting with the direct tv unit, considering options including a potential spinoff or combination with dish now you see at&t shares up about 1.3% after hours we reached out to at&t gichg us the no comment but it's worth note nag elliott management demand nad at&t sell direct tv. at&t ceo randall stephenson speaking at the council on foreign relations saying the letter from elliott management
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lighthouse and recommendation that seemed supportive of the current strategy and they made good points and that at&t plans to engage with elliott on their recommendations. so this would fit into the sense of a dialogue with elliott on what they're interested in them pursuing one note also that dish shares are up on the report melissa back to you. >> julia thank you very much julia boorts bartzin in los angeles. at&t shares up 1.3% you're a holder right. >> long at&t i'm excited to have elliott around i think the issue was yes some of the parts is clearly one way to value the company it's also the fact that it's been boys town on the inside the acknowledgement alone of elliott paid dividends i think there is more to come. >> is this acknowledgement that that squings was a failed -- >> i don't think -- sorry, i don't think there is any question about that. i don't think that was a good move. >> bit off more than they can chew that's okay. you make mistakes. and i think the market gives them a pass. i also think -- and randall stephenson -- great ceo.
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but i think his time -- within the last six months of the ten your as ceo which could be. >> which could be a catalyst. >> that could be a positive. tim has been on in since the 29 and a half, 30, the concern with at&t was the balance sheet are problem, debt problems those concerns seem to be going away looking at face value it's a cheap stock. >> plus 5% yield in a world with rates going lower that is attractive obviously the activist is there. but think about t-mobile and sprimt of a duff they'll attractive you don't get the yield that's why people run here. >> elliott's point was that if you compare to verizon, for instance, it has been underperform versen in the field focused world we live in would you rather. >> oh. >> love how she did that. >> snuck that in. >> verizon which would be more of a pure play telecom or at&t which is now a hybrid? i mean, i don't know how you compare that. >> that's a great question it's not apples to apples in in case i'll tell you, this is what i would say, is i would actually
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sell at&t on this news. >> oh. >> up 29%% for the year. this is probably the move that you were looking for elliott is in there agitating. something is getting done. you probably sell this. >> you didn't say buy verizon. >> he didn't play the game. >> what do you mean i didn't play i gave an answer. i gave an answer. >> i'm in. >> how did i not play the game. >> i'm going to let that go. >> i will let that go. >> we're doing graphics if there were graphics i'd play the game. >> i didn't need graskts. >> i need graphics when you say something to somebody and they say i doept disagree with you it's var to what bb.k. >> he is not embracing this. >> to opheim tim he is's point knows. >> calling a pivot or spin. >> we're pivoting away microsoft shares up about 1.3% in the extended extended session. boosting the quarterly dividend, a buyback wow, guy.
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>> there are concerns. they have moved to the right businesses the valuation is changing with it it's a growth story, believe it or not but at a certain point valuation matters. and $40 billion on a surface is a monster number but when you are a trillion dollar market cap it's not as big as it looks when you see the headline it's good but let's not get carried away 40 billion to microsoft is a lot different than to beyond meat. >> the stock performed well up until this point i think it's going to perform here to forward rather well. and you have the cloud income. $40 billion in cloud that's going to be growing you have to look at 150. this has been a problem. i own the stock. this is a problem area for the name 140 to 143 has to breck out in order for this to be buyable here. >> you know, microsoft is rehate rated. i have a tough time see going rerate further i think there is enormous pressure in the cloud. i would say google and microsoft are the multicloud platforms that really are the ones leading right now. but pricing across the board is
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going to be an issue even though the enterprise and the combination of them being able to hold people within the network has been proven to be strong it's an annuity business well priced. >> or is this more of a defensive play and so. >> i think there is a risk. >> time again. >> there is a risk that this is that kind of play. >> try him again. >> i would rather verizon. i'm just -- on this i think what you have to do is wait for this to prove it to you the problem you have is it's performed so well already. so you're not lewis and clark. not discovering a new country here you have to wait for a breakout. this might be the catalyst but show me. >> lewis and clark. >> good for him. >> was sacajawea with lewis and clark. >> davy crockett from tennessee or daniel boone. >> yep. >> we digress. >> for housing stocks, home buildingers kb homes toll brothers.
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driechgt 8% in the itb etf usually interest rates good for builders grasso you're in which one. >> i'm in lennar still. >> right. >> these things have performed lennar up 68% year to date so this isn't a new stage we see. these guys have performed year to date. i think ner going to continue to perform. this is the kmas of lower interest rates but when you start to see that multifamily just increasing by exponential percentages, i think that you could you could see this trade last a bit longer. >> well, mr. julian emmanuel is right, if he is right, and the biggest bubble has burst then what. >> if you want to overlay charts, the overlay the rate chart against the homemade builders, the sensitivity interest if you play rates and home builders i should say the housing sector i would rather play home depot, the home improvement space. we have seen those stocks outperform.
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>> that was a self-would you rather by the way. >> thanks. $40 was the high in toll brothers back in april bounced up against it. now the stock from 34.40 overnight. maybe that's got are gotten ahead of itself. in terms of toll they could take profits to pull back down to 35. >> i do agree with guy and i think you got to take profits on this to me this is a rates play if you think that rates are going higher then why would you be in this you have made money on this. move to something else move to cyclical. >> if they go higher for the right reasons. >> but i'm saying this is the win/win trade as well. because they are going lower near-term process. that's a tailwind if they go mier because the economy doing. >> win one tradeened makes me nervous. >> limeants tennessee. >> we're on the air still. you realize you're having the conversation. >> davy crockett. >> i'm melissa lee you're watching "fast money" on cnbc here is what else is coming
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>> announcer: the fed decision and your money from delivering alpha special guests weigh in on best opportunities for investors now. squawk box tomorrow, 6:00 a.m. eastern. >> the fed may only be halfway through the 2019 round of cuts jp morgan asset management predicts two more. bob michael a head of global fixed income at the firm this according to what the fed said it sounded like it would be one more rate cut in year. but you're thinking more what prompts them to do more. >> i think there are a couple of things one any didn't close the door to anything they've been cutting rates
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twice. the economy looks okay optically. but they've always talked about the spillover from the trade war maybe from manufacturing into services we haven't seen any reversal of anything on the trade front. if anything you are seeing an escalation starting to pass through. so we think they have to come back in october and into december and cut rates another 25 basis points each time. >> each time so do you think that we're headed for recession at this point even the though the fed was very -- preted measured and rosy about the outlook for the economy? >> well the yield curve's inverted which tells you that they're following the curve. and when you listen to the fed appear powell and they talk about the data dependent, sure we can look at the data. tells us what happened last month, last quarter. it doesn't tell you where we're headed over the next quarter and the next year. and i think until you see something on the fiscal side, either some form of stimulus or you see a rollback on the
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tariffs and some deescalation of trade, we're definitely on in road to recession. >> and bob, look, you are dead right. if you look at the trend going over four decades it's working toward your trade here if you listen to the fed today, the one thing sounding dovish was he refers to the 12-month rate of inflation and the fed obviously is at times leaned on inflation to push their hawk -- excuse me the dovish argument when in fact the last four months on inflation have been quite hot. do you think inflation is in place for the fed to hide out and give more easing than the market expects. >> i think it's a mistake. i think there is a one-time surge here from energy prices. but if you look at core inflation and you look at the trend, it's definitely coming down i don't think that theed threat of an inflation surge is their concern. that shouldn't be holding them off on cutting rates their concern should be a recession could be coming fast
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unless something happens on the fiscal side. >> i know you're aches iffed income guy i've been trying to make a bear case we have been talking about fedex, u.s. steel all the thiks going op at the point where you are 30,000 feet where does it affect the equity market. >> we see it in credit rb right. by our calculations credit spreads look pretty good beyond yields have fallen across the board, particularly government bond yields and everyone wants to say that's because the market thinks recession is around the corner yet you are not see going in kit spreads. that's telling you that until you see recession and until earnings start to go down, until you start to see dividend cuts and default rates go up, people are going to scramble to pick up yield and greed will replace fear i think that's what we are seeing currently >> all right bob great to see you thank you so much. >> thank you. >> bob michael, j.p morguen. >> i think it's interesting
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because bob has a front row seat to this. we had somebody on saying the bond bubble burst and bob says wait a second we're not necessarily seeing that. the things you have to look for are what bob said was the fiscal stim russ. coming into an election year is there going to be fiscal stimulus to me that's kind of the game changing element in this here. but in the meantime you can still have a stock market that rallies to new highs and people get it wrong. people get q 4 earnings wrong, people think they'll dismiss them you can get and tipping of a lake soim blow off top that wouldn't price surprise me. >> we also often say on the show ha that the bond market is smarter. certainly the credit markets are the greatest read and guy asked the impact on what you think it mens for equities. when you look at the s&p dividend yield minus the triple beat credit spread at wised much 60 years we haven't been this wide for a rung too many it's equity
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positive telling a tale where rates are lower and earnings yields are higher go buy equities. >> the other reach for yield has been in the chemical space, packaging space where everyone throws those out but names have done well and sectors doing well are utilities. up over 20% year to date continuously perform and staples. everyone is talking about valuation. no one cares with about valuation hunting for yield. no one cares about valuation when you look for defense and both things have proven that. >> coming up, recession fears gripping companies and investors alike but our traders have stocks that they say could be recession proof. they give us the names shares of fedex tanking the worst day in ten years. one options trader tells you how to manage the trade. much more "fast money" right after that 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,
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take a look at shares of u.s. steel under pressure after hours. the company issuing a warning on third quarter earning processes. deteriorating market case conditions in europe result in significant margin compression guy, you cite this should we be more concerned overall about the signal its sending. >> i think so absolutely but then you look and say wait a second fedex topped out made the all-time high two years ago
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going from basically 275 to current levels the s&p doesn't care the market doesn't think 80s barometer for anything what they are saying it's a fedex specific amazon is going away has no bearing on broader economies. maybe the market is right. i don't know i don't think that's the case but in terms of how to trade it i think we've been is it steadfast i think this is headed back to lows we saw in 2016 or so business give or take 128 and then we can talk about it on valuation. >> tomorrow are we walking in and see any sort of spillover effect or is this have you had off specific story. >> i think the market looks through it look at it very similar to fed pick. this is a trade war casualty stock if we get movement don't worry about signal. >> shrimp i think u.s. steel mass a levered balance sheet sensitive to steel prices when they talk about the slowed in europe it's a big issue this is a company down 70%
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roughly since the trade wart starte >> there is a stock down 31 peppers year to date but popped in the last month 36%. you talk about the lower levels where it doesn't have to be a heck of a lot to go right to have it rip higher granted the news are headwinds to b.k.'s point nobody understands the trade war stuff. nobody understands what the outcome looks like no one understands what the true ramifications. i put this in the bucket of brexit breks imt o it everyone cared and then no one cared. because no one understands the particular ohs are the specifics will be. that's what's happening with every trade war stock every metal stock mining stock all of the names are susceptible to a huge pop on not so great news >> let's move on here. the market ending mix after the rate cut but it doesn't mean fierce of recession have been erased bob pisani at the nyse with more bob. >> melissa, despite the recent spate of stronger economic data in the u.s. pessimism is still high and it appears to be growing
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the latest quarterly duke university of cfo shows out of 225 cfos 53% bleach mts will be in recession next year and 67% say recession by the end of next year, the the fourth quarter and glum outlook from the global fund manager outlook on tuesday that survey more than 100 global fund managers found roughly 40% expect a recession next year as well the highest since august of 2019 fund managers continue to expect low growth and low rates and central bank stimulus will be needed why all the pessimism? blame it on extreme global growth uncertainty but trade wars are only part of equation cfos are worried about germany one of the largest economy he is in the world having flat or negative growth. plus fears of broader slowdown in china they seem to see a strong u.s.
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by itself may not be enough to save the day it's not clear what part of the world economy is strong enough to pull the rest of the world along with it, even the u.s. fedex bit, echoed concerns after missing on earnings and cutting guidance the rest of the year. any cited u.s. mctrade tensions pb o, policy uncertainty and overall slowdown in the global economy. back to you, melissa. >> all right, thank you, bob so are there any stocks that could be recession proof if that's what you think is going to come? guy i'll start with you because maybe you are the closest to that thinking on the devgt. >> closest in terms of bear market recession i think the stock market itself is crossto recession np in terms of recession proof i think there are. if you look at mcdonald's in good times and bad times, mcdonald's wins to that. especially now they're more technologically savvy than a decade ago i think if you are look for a recession name mcd. >> has it been that long since
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you had a quarter pounder. >> does terrible things to me, yes. >> what do you think of that tim. >> we talked about at&t i won't echo i'll state that one and talk about coca-cola and even constellation brands certainly the core businesses are recession proof. both companies on a margin upswing. coca-cola refranchise ds taking care of bottling businesses moving to higher margin drinks and away from the carbon eighted drink world. in the recession these are the stocks that outperform >> in a recession do we care about valuation. >> in a recession everything goes down. but i think the recession trade is over for now. the recession trade has been the last six or eight months and what you have seen over the last week or so is people rotating out of the recession trades into the cyclical trades. so i think you have to be very careful with these names because that trade is done. >> but for the purpose of our game, this is a recession proof stock. i'm going with utilities. >> b.k. is doing well at games.
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>> when everybody is on one side of the boat b.k. goes to the other side i know how to play the game. >> the compliance has been awful on the show but the compliance hawks have been everywhere we've all been lost each other. >> gold hasn't been mentioned gdx gave up 10% of the year to date performance up 33% year to date i think you see gold rally gold miner outperform process 3 to one the actual metal and stick with xlu, the utility sector etf as well. >> i'm surprised you didn't say gold or even like the dollar. >> yeah, but i think those could do well without recession too. >> he doesn't disagree i don't agree. i would rather rather buy the dollar. >> that's called kwlau you are a say something bullish you're saying recession stocks are toast. bear suit is not stipg up in the back anymore. >> let me be clear let me be clear i'm readsing the market whether or not it's my internal opinion, i want sfob as bearish as anybody
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but if the market is going to rotate out of the recession names which have done extraordinarily over the last six months, again, i'm not lewis and clark, not discovering a recession around the corner and i'm the first guy there, right now all of a sudden the market tells me get into cyclical so i listen. >> columbus put a bow on it. >> davy crockett. >> steve mentioned utilities makes sense sense. if there was recession you think the rates go lower lower interest rate environment, conedison made all-time high today. people say values is stretched yeah market doesn't care i think steve is onto something specific with utilities. specifically ed. >> coming up, check out shares of fedex having the worst day of the year after the company failed to deliver on earnings report this week options traders betting the fallout getting start pd roku shares rocked today as competition in the streaming space heats up we'll break down the headlines don't go anywhere. much more "fast money" right after this.
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welcome back to "fast money. it's been a horrible no-god -- very bad foy for fedex down near inspect peppers after failing to deliver the earnings report. then the downfwrad stiefle key bank all bailing offer fedex after the poor report op amazon a foreign trade and businesses and options market sounded off on the stock mike khouw in san francisco with the action, mike. >> it wasn't just a bad day for federal express obviously a bad day for people with positions at fedex. i was one of those we saw well over 10 times the average daily options volume
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today, the most active options were the september 150 puts. expire this coming friday. by early morning about 10,000 of those traded for about 2.25. buyers of the puts were betting the stock would decline below the 150 strike price by the end of the week by the 2.25 they paid it dereked below the 150 strike price later this morning as it got down to 148.5 low as before disclosing at 152.5 i think. i think i took 80% of my fedex options position off today i had the 160, 180 and 2000 strikes on it's advisable for most people with positions in this to reevaluate it. you were saying this is the worst trading day of the year. i think it was the worst one had day earning singles the credit crisis december 2008 when then did the second quarter 2009 results we saw something like this but haven't seen anything like it since then this was definitely out of left field from the options market perspective. but people are lining up for
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more volatility ahead. >> tim, quickly are you a holder. >> "i." >> what do you do. >> i tell what you i think it's more cyclical than structural and they're they've been guiding lower the last four quarters based on upon supply versus demand of air freight. >> thanks for that mike. for "options action" tune in to the live show friday 5:30 p.m. eastern time. >> look at the cramer cam. jim weighs on the fed decision at the top of the hour on "mad mu mne chore "fast money" still ahead. what do you look for when you trade? i want free access to research. >> announcer: "options action" sponsored by think or swim by td ameritrade i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price.
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click, call or visit a store today. welcome back to "fast money. streaming wars heating up again. but this time it's all about the hardware just check out shares of roku getting rocked after our parent company comcast announced subscribers of the internet only plan announced a pree xfinity streaming box. usually $5 a month this as facebook sberps the streaming space. nouns announcing a portal device with micron and cameras. allowing them to stream from many players is there any clear winner the streaming space? or are there too many cooks in
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the kitchen. >> are there clear winners looks like disney pains me to say it but kinz held in there well since the stock meider at 120 forever. and it hasn't given much back since the move to the upside maybe disney is emerging as the winner i'll say this about roku i thought when i it was 140, set at 200 close now you have to ask is it a broken story i'll say in it was a $25 stock this time last year. traded up to 175 the logical place to trade down and hold as it turns out is $100 but to answer the original question disney emerges as vikt sfleer when roku went public the knock on this was it was a distributor, a platform and that it would get disintermediateiated it took this long but is this the moment. >> illustrate clear the valuation is difficult to justify if you look at the chart. looks like it can go to 100 no problem. i think the more important thing is netflix netflix upon a day like this
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with these announcements had another bad day. trying though hold the 285 to 295 level. if you look at the chart but more more importantly where people value, disney's multiple certainly coming up to meet a netflix. when you think about pure content, a diversified business. disney makes more sense. i think the knock on netflix is not that they're executing . the knock is that they don't think the multiple makes sense anymore opinion that makes sense. >> you know what nobody thought about was apple. when you think about apple, apple has -- there is no one thinks about apple as a streaming player or valid streaming player maybe that's not the case now. >> last week with the announcement everybody did >> i don't know if they really gave it any type of credibility where they are saying it's another lever. >> >> it was discussed in that it's loaded on to a billion and a half phones and the install base in other words taking out roku if anybody a piece of hardware even with software i think that helped apple. >> that's the one i play against
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that roku up over 300%. that one has targets all over the name. >> seems if you are a content producer that's the winner look at netflix with seinfeld. if i had to buy anything i would buy vintage porsches because jerry is in the mechanic that's the play. everybody is paying so much money for content you're better off being a ntt coenproducer. >> up next, final trades oh, wow. you two are going to have such a great trip. yeah, have fun! thanks to you, we will. aw, stop.
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welcome back quick programming note kobe bryant joins squawk on the stret for exclusive interview on latest investment ventures. tomorrow 9 578 eastern all right time for the final trades tim seymour. >> with or without discussions back to at&t, whether recession proof, were some of the active wsh active vision i the yield i like to a. >> b.k. >> i tell what you if you think we're having the retation in the cyclical you want to buy the rails in the redding short line but noefrl southern. >> those are monopoly rails. >> ulta beauty demolished down 35% i bought it on the dip finding a base in here do not let it get below 224 has to hold the level. and many i'm playing it for 15% move up.
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>> there is a kilili in the air. you know what that means hockey season is here. the raernls playing down the street, tim as you know. >> world's most famtz arena. >> jet blue, jblu. >> what does that have to do. >> nothing. >> tomorrow jim cramer starts right now my mission is simple -- to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain you but educate and teach you so call me at 1-800-743-cnbc. or tweet me @jimcramer. last night i warned you even if the fed gave us what we wanted the market might sell off in

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