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tv   Fast Money  CNBC  November 13, 2019 5:00pm-6:00pm EST

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strength we'll see if any follow through. >> the market taking a stride no more rate hikes even in the i hadal of the day a little bit of a threat. >> when jay powell said let's leahy how low unemployment can go. >> no more rate cuts thankfully out of time that does it for "closing bell." >> and "fast money" begins right now. live from the nasdaq market site over looking new york city's times square. this is "fast money. i'm melissa leap our traders on the desk with pete najarian steve grasso chyron finerman and guy adami. tonight on fast. nike doubles down on direct to consumer how it can shake up the retail astray. cashing in on fintech. pete makes a fast pitch for american desk. will the desk buy? check out the mystery transport stock posting the worst day in more than a month, what it says about the healthy of industry. we start off with a touch of magic. shares of disney soaring more than 7% today after the company announced the new streaming
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service surpassed 10 million sign ups in one day. that news adding more than $18 billion in market cap to the entertainment giant today alone. and get this since disney announced pricing for disney plus in april it's gained $58 billion in value. do the magical math, $58 billion in market cap. 10 million subscribers makes each disney plus user worth about $6,000 is the magic too good to be true? guy, that's one way to do the math i think the market is saying is going to be it's far more than 10 million at a point. i guess the moep is at some point i want $60 if you do the math that's the ultimate hope with that said here is the stock that traded about six times normal volume, made an all-time high, up 50%ish since announcing legalized me andreaering to me that was the first life
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lines in the sec can you wrap your head around the valuation? karen and i spoke about it last night. spending money to make money i get it how long does it take and moug are you willing to wait? and how long should you stick around after 50% move over the last six or seven months say probably not a bad time to take profits in the name. >> we did this magical math because the exercise at this point for investors who have seen this ride up is how much is priced in for a business -- we don't know it's paying off it's a money hole right now. in hopes that in the future it will pay off. >> right it's a money hole. but they've got -- it's a money hole funded by someone with a lot of content and a ton of money, right. >> sure. >> if anyone can compete it will be disney. i think, you know, we said at the top of the show about how much is already priced in. a lot. this move today -- i mean, it was trading 137 before announcing the number. $11 in disney is an
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extraordinary move so it would be hard to say now is the moment you have to get in i feel like this is a buy the rumor sell the news. last night we got a little lucky because of the glitch and thought the launch didn't go smoothly that's a complete side show non-event. here that's a lot of good stuff mice li priced in. i think good for them for being aggressive get itting out there job with the launch. but that's a really enormous. >> this is a stock for a karen barometer when you have hufl it's overpriced are you getting a bigger multiple in disney. >> maybe you need a little more -- >> why. >> why a little more. >> why a little more they're in the game. they don't have to win streaming it there for them now. >> okay streaming is there for them the costs are there. look, i believe it's going to work but by your theory then you would pay any price. >> not any price a higher multiple than the
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existing multiple that's been put on disney. >> that i be fair enough. >> to 90 million by fiscal 2024 that's the goal. >> for me the market has to be calculated and technically has to hold the 130 mark we are way above that right now. i wouldn't be a buyer today. >> today would you be a buyer. >> not a buyer today because of the multiple because the move is so big you get a little reversion. >> we're not. >> i think it goes higher than where it is. >> you're not far apart. >> we feel stretched by the way. >> the valuation feels stretched. >> i'm -- that's what you are saying, right, karen. >> for the moment. >> $11 move in a single day. >> right. >> and this is a new -- i know what you're saying, the streaming. on the other thing is they do have content, to your point, karen. this is something they don't have to pay for the content like everybody else yes they have the original content but think of the content you've already got with marvel and pixar and the rerest and the bundle package with hulu
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and all that and there is reasons to be excited. and i understand the excitement. and it's a fomo deal with all the guys jumping in. suddenly the stock up $11 on this really this was a known this was something that we all had some perception how it would go most of these, many of these i would say the majority of these subscribers, the 10 million are free so. >> verizon subscribers >> that's something that's going to have to play out over time. do they stay when they have to pay? >> that's the real number. >> right, of course. but i mean i think embedded in the discussion is if netflix is valued at x should disney pick up some of the valuation of netflix because of the road it's on therefore when you say the valuation seemed stretched right now are we not allowing it to expand bus it should expand because it's in the streaming business >> you know, i think that's tar fair karen has a view on this netflix has a 7-year head start.
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and airport you look at it a pretty sticky user base. i don't know how sticky in the years to come. but until now it's been good and you have the international growth i think disney would love to be a netflix at some point but the runway is not next week it's more like five to seven years from now in terms of the valuation it doesn't happen overnight at 25 times where it's trading now that's historically extraordinary expensive, understanding that they have the new revenue. >> it's got to happen. but you know what else has to happen apple has to. >> back up, back up. why do you say it's going to happen. >> i understand tfld. >> which does it got to happen. >> i'm not saying it has to get a netflix mums but it has to get a larger multiple than disney's core business has been given all the history of disney trade going has to get a higher multiple than that. no one argues that, right? >> so the projections by disney is 60 to 90 million subscribers
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by fiscal 2024, approximately four years from now. how many netflix subscribers are there in the united states right now? 60 million subscribers >> right. >> so in that many years should disney have the netflix valuation? >> well, i don't know is the short answer but i think -- the streaming business is changing, right. i think that -- i think they could end up with more than that but i think it's also an issue of cost as well. it's not just how many subscribers. it's the cost. and what other costs of disney -- you know, disney owns abc tv that's not where you want to be right now. >> right. >> on the flipside though, disney doesn't need a netflix multiple and netflix multiple might need to come down a lot. >> netflix is the pure play. so netflix has one which of earning income disney has multiple ways of earning income i'm not saying -- i'm not saying a doubling of the multiple process. but there has to be some increase if you say there is not an
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increase in multiple deserved, i think you're not being being honest. >> you can see that there should be ha downgrade of multiple in a stock like netflix. >> 100%. >> it's meeting in the middle somewhere. >> yes. >> let's get reaction to the disney plus number joining sus tom rogers executive chairman of wynn view. cable tv president, a "fast money" friends you name it. he is it. >> he is also a stud, say that all the time too i was going to say. >> up to you. >> i'm saying it. >> after i'm done. i'll say it after. >> now i can only disappoint. >> the pressure so high. >> i'm a disney plus subscriber. >> one of the 10 million. >> i'm a verizon subscriber so i got it free and i took it. >> do you look at the 10 million and think, o, yeah that $10 pop in the stock was justified. >> you got to give them their due. i mean that was a hell of a launch and that's a very big number i think that they put a lot of pieces together here to get to,
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you know they did fox they bought hulu, took control from comcast, put together a bundled and the verizon deal and launched with 10 million but you got to remember disney plus is one piece of this game and they are losing satellite and cable subnas have a very big per subnumber attached to them that's, $15, $16 per subscribers. that cord cutting begins to hurt and you don't make it up with $6.99 disney subsen forget about the froh or disney plus subs you don't make it with $13 bundle subs either the question really is how fast does that legacy business going down now, you got -- disney is better positioned than any other traditional media company to get it right and the momentum is now with them and injury they continue to enjoy the momentum until
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something happens on the legacy side of the business right now the legacy numbers are disguised because you have advertising continuing to go up somewhat with pricing and long-term affiliate agreements with cable and satellite which disguys the cord cutting going on there but at some point we have a day going the other way when the legacy issues show themselves. and that disintegration of the bunding could happen faster than what people look at as the growth rate of the new business. they established themselves, they're there, deserve credit for what they've done. but don't take your eye off the ball it's the question of the rate of decline of the legacy business versus how fast the new stuff grows. >> even though disney has a deep library of content and the money to spend on new content, do you think a pure play streaming play is actually in a better position because it doesn't deal with the drag from the atrophying legacy
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business. >> well not all pure play streaming play but if netflix is what we're talking about. >> yes. >> no doubt better position. because it has a huge head start. it has a $15 billion programming budget, over half of which is original programming compared to about a 2 billion original programming disney budget. disney i think is going to have to really invest much more significantly in hulu with original programming than what they've shone yet, particularly for the international piece of that business. remember, hulu is going to lose the comcast nbc content. fox is not really producing original content of in ilk anymore. and they did a smart thing saying that fx programming was going to be highly associated with hulu. but they have a lot more to go tishlly in international budget if they are getting into the netflix game when it comes to original programming, the mandalorian was the wig release in terms of the launch
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and you got to give them due there too. that got great reviews user and media critic review li reviews you want the first original forra to get that. because at the end of the day library reduce product is important because i don't think it defines what keeps these things from churning which is more good original programming. >> the bottom line, the streaming launch was successful but you're a skeptic on the yoefl business model disney's got. >> more positive on it for disney than any other traditional media company but very aware that the traditional side of the business is in for steep decline. and i think it's an unknown which happens at a more rapid rate. >> tom, great to see you thank you so much for coming by. >> thank you for having me. >> tom rogers. does this change your mind. >> no, i'm not inviting tom back into the conversation. everyone knows there is no which he can be gone just yet. i think that we've had the days where we we have seen disney sell off because of espn, because of the core business
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i think now this is disney's which of fighting with espn plus and with streaming so we have already seen the negative now it's about changing a little bit of the perception to be more positive and i think that's the stage we're in. >> guy. >> we said it for a while the stock is set up to push to all-time highs that's effectively what happened in four or five hours. here at six times normal volume. to buy here in my opinion you bet the market goes high her and there is the new flood of capital into the name. i think that's a big bet to make i'm more inclined to take profits and look for the bullback to 130 which we were at yesterday as it turns out. >> karen. >> i did a p. trade. >> nice. >> calendar, january, 150 call november calendar seemed like a bit of a frenzy to leg into that cardium. -- i have some exposure there backup but it seems like people are getting superexcited maybe a
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little too much. >> and mel to that point when tom brings up a great point which is the traditional side and the money they'll lose from that and replacing with this but it's not really 10 million that number will be a different number when that actually turns into paying subs so that's the difference plus they lose that money. and it might not happen at the same speed he doesn't know which goes faster and it's there we all know. the traditional side, that's slowly crumbling then all of a sudden how well can they do on this new side, the streaming. >> remember digital dimes and analog dollars >> i still have them like subway tokens and garden state parkway. >> i do remember the tokens. to that point, you're switching a legacy ones which are more money. >> right. >> for the digital subscribers which are less. >> but good for them for recognizing our business is -- is a structural tech tonic plate move and we have to address it. >> fed chair powell testifying on the hill today. what he had to say and what it
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means. nike kicks amazon to the curb and wal-mart gets ready to report mi have the retail round up cong live from times square in new york city. much more "fast money" right after thisr farm this is our >> announcer: this cnbc program sponsored by ibm sponsored by ibm let's put smart to work. blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. it's used by some of the biggest retailers everywhere. a nice wedge. so more food ends up on your table, is that daddy's lettuce? yeah. and less food goes to waste. ♪ ♪ and less foo♪ goes to waste. ♪ ♪ ♪
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welcome back to "fast money. another historic day for stocks hitting all-time intraday high while the s&p 500 saw the 20th closing record of the year as jay powell told lawmakers he is optimistic about the economy and for now rates are on hold. >> i think the new normal now is lower interest rates, lower inflation, probably lower growth and you're seeing that all over the world, not just the united states you see it to a greater extent in many parts of the world than we see here. >> let's bring in mark abana, merle lynch's head of u.s. straepg. he toned down the forecast for the year mark great to see. >> you thank you. >> you were at 2% for the year. >> correct. >> year end 2019 on the 10-year yield. in powell's speech it sounded like he was worried about
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deflation coming from around the world. i'm wondering how big of a concern that is and how you factor that in. >> i think that what we're hearing from the fed and see they are hoping that they can keep rates on hold for now but still worried. and that struck me today in powell's comments. he talked a bit about now he was worried about downside risks for the outlook and in particular emen eighting from the abrewed and he said that rates are loweren and on hold now. but they hope they don't have to lower them again in the future they're worried about low inflation, trade uncertainties, global data and data out of china, which it sounds like today chair powell is sbaking he doesn't trust. in that context you still have a fed very cautious, patient and is going to be in no hurry whatsoever to raise interest rates any time soon. >> how quickly do you think the fed would react if we found out that the december 15th tariffs were going into effect i mean if they are that worried
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right now about the potential impacts, if if he if we soo this hit because it doesn't seem the two sides can agree on whether or not there will be any tariff rollbacks at this point, do you think they'll act right away. >> i don't think we're going to see them lower rates in december. >> the fed meaning -- i guess we might know. >> i don't think there is any indication that they would to that or preemptive move is likely i also don't think at the next fed meeting that would be enough to tip into lower ritz what they need to see is a sustained impact on the economy, a hit to confidence, a hit to employment potentially and need to see the risks to low inflation increase before they would respond. i think the fed really hopes to stay on hold but in all likelihood if they lower rates again it's going to be because they're worried about recession and maybe worried they need to cut to zero. we don't think likely in the near term. certainly you've seen data stabilize. central banks around the world
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sound more neutral, less dovish. you've seen trade tensions despite the headline ping-pong have ratcheted back. and assuming that's what with he see in the early part of next year the fed won't need to do much but if the data deteriorates and it seems recession risks rise they're not waiting too long to respond. >> equity volatility nas has a 13 handle on we don't talk about it that much because the 13 is not interesting. treasury realized. 150er yields over 3 and.25 1.90 1.50 1.90 bond volatility at historic levels and magnitude is big are than equities. is that in and of itself concerning >> yeah be it is concerning. i think it reflects a market having a hard time discerning the economic outlook because it's largely roud clouded which uncertainty. and a particular trade uncertainty. that's why you see the mechanic that's chasing headlines, up and
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down and all over. to go from 3.25 to 1.50ish level. you did see the meaningful deacceleration of activity you saw the payroll slow and the fed commit to lower rates. keeping rates low for quite a time but a lot of the day to day magi rations in the bond market it's driven by the headline news. and that's a market struggling to determine is the economy going to recover and stabilize and grow faster like the administration hopes or is uncertainty going to push the economy more towards recession? i think that's which we see all this volatility. >> mark, thank you for coming by. >> thanks for having me. >> bank of america, merrill lynch. >> stabilization of equities that's a good thing. >> it's hard to fight the fed, the old saying what are they doing with the balance sheet? all of this is going to be easing even if' they're not cutting rates anymore. the interest rate forecast for the market was at 30% for a cut in december. now down to 7%
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the market is okay with where rates are. and bit, powell just gone onboard. lower interest ratesen within lower growth and inflation you could have said the same thing in december, could you not, of 2018 yes you could have i'll answer that question. >> you're playing with yourself. okay >> it's a rhetorical game. >> it is the markets in my opinion went higher once he got with the program and once he started cutting rates. and at this point he is onboard. and if he is not cutting rates he is going to do something easing with the balance sheet. i think it's still easy markets for the equity market. >> read about the fed share testimony on the website we have much more on fast here is what's coming up. >> nike doesn't need amazon. but will the apparel move cause others to follow suit? the chip sector on a tare this year will the n individuallyia earnings add to the gains?
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had what options markets expect from the semi game all that and more when "fast money" returns
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pacificaaaaa! welcome back to "fast money. nike giving amazon the boot today. announcing it will no longer sell products through the e-commerce giant all part of nike's focus on direct to skurm. still up 22% will the big bet on direct to consumer pay off we've been wonders as direct to consumer has been strong in the last few earnings reports. >> it was interesting to me. good for nike if you feel you have a brand this strong you can do this. i feel i'm long foot locker. it's positive for outlooke
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>> a few of the outlets can you get something. >> however it show he shows the focus on direct to consumer. thaeps not the best for foot locker at this point, they still need each other a lot but good for them. obegs the question will we ee esee other brands that feel they can do this. >> can you think of a brand that could do it at this point direct to consumer without a middle man? well zappa's is powerful i don't know you had should have an answer for that but i don't. >> we see it all the time in terms of people -- brands pulling from macy's. you soo he it in other ways maybe not necessarily amazen >> what is it -- let's talk about amazon, though what it means to them. obviously not a good thing necessarily. there are people needing amazon. but you look at it the stock traded okay since earnings but now doing the turn again the dau they reported the stock traded 16.50 everybody hate to do en oh the show that night we said before you go running out
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of the name this is the 50% retracement of the december low and the recent high of 2020. if you sale it here you trade it wrong. that turned out to be right. i got to tell you something on the market that only goes higher the last week or so has not been strong for amazon. maybe in a weird way this is the opening salvo that has many chapters left. >> and does somebody else jump in and start the competition levels that are not necessarily amazon direct bits themselves. the direct -- the dtc has for t individual companies when you look at somebody like nike that's been growth. >> underarmor's problem wasn't it they relied a lot on a tj maxx. >> tj maxx. >> you would get the 30% off. >> and all there that's what was on the shelves i totally agree. the only thing i look at nike, the reaction was positive preponderate but look at the pe kwsh karen this is a name we talk about on the desk talk about stretched if we look
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at disney saying stretched i'd say nike feels stretched starbucks. there are names out there that people try to pile into but is it late to be piling in? wait for the pullback? to amazon, guy, i agree, this is going in the wrong direction i would not be bullish on amazon. >> speaking of retail we could see the test of the consumer when one of the world's largest retail resist reports tomorrow out with earnings before the bell shares up 29% this year sitting a stone's throw from the all-time high. will wal-mart tell us the true story of the health of consumer, grasso. >> wal-mart was the only one that people thought could actually compete aggressively against amazon they've been doing everything right. so is this the true test of the consumer or true test of how well wal-mart has done to compete against amazon i think it's the latter versus the former but i still think you're okay sticking with a wal-mart or sticking with a target to pete's point about maybe getting in too late. >> valuation >> valuation i think is a little bit stretched to get to pete's
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point that he just talked about. they have been doing everything right. the last quarter was fantastic the u.s. same store sales growth that was really strong the grocery business doing really well. so all that having been said i like target which i also think will be a survivor in competing against amazon but the valuation isn't nearly as stretched i think the valuation is maybe tovi cheap. >> that was a power pitch of yours. >> it was yb jae. >> i love. >> i'll hold for me and i continue to hold pld it's a 60% on the year trading at 17 times year earlier in the year tradint at pe or in that range. spending $20 billion on e-commerce which they needed to do to compete. how about brian coronell and the guys at target imagine the value now underneath target. >> one thing, we would be remiss even though you roll your eyes we would be remiss if we didn't
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offer costco up helm almost 50% talk about a name that just continuing to defy all laws of dsh zsh. >> i roll my eyes at you no often than not it's not remarkable guy. >> that's usually my domain. >> speaking of guy. >> i know for a fact i will tell you that one carter braxton worth who appears on "options action" at 5:30. >> today is not thursday oh, man my whole week is screwed up he'll be on friday he mentioned costco if you go back to spring when the market was floundering costco holding in there i'm telling you cbw good for him and quickly if wal-mart deserves a 24 pe which i think is a little ridiculous. target shouldn't be at 16.5. shouldn't be 24 but closer to 19 you can do the math on the back of that. >> coming up peloton peddling higher we tell what you had the stock soaring in the last minutes of trading. plus pete stepping up to cash in
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peddl welcome back to "fast money. the fintech space on a tare this year and pete cashes in on a name in particular he is at the plasma with the fast pitch take it away. >> and we're throwing out american express i like the name and own the name here's why when you look at the c suite it's been a solid thing for the company for a long period of time as a matter of fact, the ceo who was named the ceo in 2018 sounds like he is young, a couple years in let me tell you something, the guy has been there since 1985. this is a company that has a great c suite. it's why i think they function as well as they do when you look at that and then you start looking down at the fundamental story. trades at a great pe they have a dividend yield it's not as high as i'd like but close to 1.5%. but these guys are buying back stock like you wouldn't believe. in the last five years 5%. so 25% of the stock is now off they bought it back. that's huge. that's a really big move and they're not just doing it for engineering purposes they're buying back the stock for the right reasons.
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when you look at the strong fundamentals i'm focused on revenues and earning looking at revenue growth over the last five years. 39% that's a monster number. you look at earnings growth as well over the last five years. it's doubled so there is a lot of reasons i think when you look at the company right now you say, it is really clicking. and i think because of the pe multiple right now it's too cheap. i think there is plenty of upside from here. >> karen has a question. >> yeah. >> okay. >> where do you think the pe should be? hue do you think of the valuation for this company >> i look at right now karen, trading around a 13. put the s&p type pe on the can if you put something coasters 15, 17 puts the stock above where the price targets are right now. i think that would be closer to fair and i also like the fact that they are more exposed to the u.s. consumer than when you look at like visa and master card and some of the rest 75% of the revenue is in the u.s. that's where the strong consumer is and i think will continue over the next couple years. >> anybody else have questions
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otherwise well just vote. >> i think we should vote. >> all right. >> look at karen's little. >> i can't wait to see it. are you buying or selling who pete ace pitch on american express. >> grasso. >> i love pete, i sell the pitch. >> i think visa and master card. have outperformed for a reason i think american express just doesn't seem to execute the proper way and given what pete just said where he left off with europe, being not as strong as the united states, i think europe has troughed and i think you'll see that start to bounce. for those reasons i would rather be a bier of visa or master card. >> karen what do you say. >> i say buy okay i'm not -- this is an american express card. did that used to be the -- the icon logo. >> pretty sure. >> the guy with the mohawk. >> been a buy since 2016 where it bottomed. >> and see a mohawk. >> it's a punk american express i'm a about buy.
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>>reporter: mcguy. >> so pete ended with too cheap. i put this on my board prior to. too cheap. karen said what should the multiple be? obviously american express takes credit civic risks should be cheaper. i think we all yes but should be half the valuation of visa and master card should it be pete pete says no shouldn't be half. >> should be closer. >> closer with market market i'm with pedro delinquency rates aren't going up which is good buy axp. >> they voted are you at home voting on pete's pitch on american express buying or selling. cast your vote later we will reveal the results later in the show up nt exfed up with fedex we find out what sent shares find out what sent shares sharply lower today. ♪
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high protein. low sugar. tastes great! high protein. low sugar. so good! high protein. low sugar. mmmm, birthday cake! pure protein. the best combination for every fitness routine. welcome back to "fast money. peloton racing higher on reports that the exercise bike maker is splo exploring apps for amaze. fire tv and the apple watch. the company reportedly planning a cheaper treadmill and rowing machine set to hit the market nextier. the stock at 10% below the ipo price. anybody believe this could help it >> well i don't think it hurts it
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but again, the pathway to profitability. this is an expensive bike and treadmill. god only know what is the rowing machine costs it is it hardware company or software company? they are trying to figure that out. i love the product i i'm i love the bike i'm on that. >> you took a high it us my back was bothering me. >> if they're going to be cheaper you opened up the segment saying cheaper treadmill. >> they can get the volume. >> so i'm with it. and the ipo price was $29. so it's honing in that you start to trend higher. once you get past the resistance of the ipo price this thing could be like a coiled spring. i would say buy it into that ipo price of 29. >> all right switching gears here check out shares of fedex selling out down more than 3% after the impressive run the stock up more than 13% since october when bernstein said that both thesis for fedex has been shredded today's weakness in
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fedness is it something the beginning of something bigge >> i think it is the trend lower now the last two years. look at where it topped out on the trajectory since you have had moves of the magnitude to upside six times in the last 18 months the day bernstein said in, we said thanks for nothing you're late to the party. we also said you're winding up being right but the timing it miserable. that's what's going to happen. fedex is sort of losing the mojo and lose going now the last two or so years on a tape that's been extraordinary and an environment where they should be crushing it. they're not. i think today told you a lot the next big move is downsflood what do you think pete. >> for a long time everybody wants to buy fedex on the full back you want to buy i think they mismanaged things too long they haven't gone the right direction. look at ups, the different between two companies we put in the same category. and ups is performing far better i continue to own that stock
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sell calls against it all the time but a lot of that has to do with, mel whenever i do the pitch stock it's start with the management i think that's the starting point for these two. look at ups management and how they executed and then at fedex and how they execute. >> karen. >> i'm long fedex and upsp fedex has been a personial disappointment subpoena management is one. and succession planning didn't seem to go as plans. fred smith back there again. they did an ill-timed and poorly executed integration in europe and then you have amazon switching to single day and every day delivery that's a lot of spend for them so, you know, it hasn't worked at all however i feel the valuation is really discounting a lot of really bad news. but i have one bad -- one bad news left and then i'm out and that will be the bottom. >> that's capitulation.
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>> that's capitulation there. >> the bottomia. >> it popped in off the 22%. the seasonality for fedex in november the best month of the year for he had ex, usually up 5% a lot of this stuff has been prerallied but the worst month of the year is december. to karen's point i would lock in profits right now because december doesn't look pretty. >> coming up shares of cisco in the red after results. the company's conference call wrapping up. we break down the highlights one soaring semi stock set to report tomorrow, and options trader bet on bigger gains when it reports uave at the nasdaq in times sqre much more "fast money" still ahead. only one thing's more exciting than getting a lexus...
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it is time for a wealth tax in america i've heard that there are some billionaires who don't support this plan. >> the vilfy indication of billionaires makes no sense to me it's bull. >> that is part of democratic presidential hopeful elizabeth warren new ad campaign in it she blasts several billionaires not just leon kupperman. a aide tell brian schwartz the
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new ad airs later this week. you can read details on the website. by the way we hear from leon kupperman on the "halftime report." he's already given cnbc a statement filled with colorful words as you can imagine some of the other billionaires criticized in this ad former ceo of td mere trade lloyd blanken fine and peter thiel. somebody for everybody here. >> you know it's amazing when you have seen wall street they've been forced to give to both sides of the aisle for every presidential election. they have to donate money to democrats and republicans. we have heard from some of the banks saying they are sitting this one out i wonder as this ratchets up closer to the election how many of them really sit on their hands, because how do you invest in that if you're a capitalist i'm not really sure how you go about doing that and everyone knows i'm as unbiased as you can get. >> today was interesting that
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senator ted cruz tried to press jerome powell towards the end of the tomorrow testimony to comment on the wealth tax. >> jerome powell would not assess or score any campaign proposals. that's not my job or the fed job that's the job of the cboe and voters you can decide for yourself. he got out of that you got to wonder what the impact would have -- you're saying it may not be just be billionaires i want easy to go afte billionairers but other people who are aspirational who want to be billionaires. >> exactly right i think that's part of -- we'll see how it plays out clearly you are going for the masses making in kind of a statement. how do the masses really react that's going to be something i think pretty interesting because i don't know it's as big of a layup as people think going in. >> let's get to cisco with the earnings alert the stock down after hours frank holland at headquarter was the details. >> weak guidance for the second
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quarter leading to a fip in shares even after the solid beat on top and bottom line the company giving what you have to call a dire forecast for q 2 seeing leasing revenues falling three to for a 5% versus estimates of 2.6% growth ceo chuck robins saying macroissues such as u.s. china trade war brexit and u.s. political tour moil are leading to lower business confidence and kbakingis co on the call robins offered insight into the busy factors leading to the weak guidance >> so public sector continued to be strong. but the rest we're, you know, in enterprise commercial did weaken, you know, service provider and emerging markets which were stressed last quarter were about the same. we had shown, you know, the ability to offset that with commercial strength and enterprise sector when these
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weaken that quarter that impacted our ability to offset them. >> we got a quick take from arlgs hernandez raising the stock as a hold adding in reference to the guidance perhaps a shock to investors that i have thought this was a more stable growth business and weakness looks to be from cisco's cloud customers and service providers. service providers includes at&t and verizon. we're going to continue this conversation aboutis cisco you go during an exclusive interview at 9:00 a.m. on squawk on the street tomorrow. >> frank holland back at headquarters whap whap what do you make of the second quarter in a row where cisco blames u.s./china. >> it used cisco announcing, that would br now corporate america or make worldwide is doing i wonder if that's the case now. if it's not specific to them but more of a broader concern, so i don't know actually i'm surprised that the
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futures aren't down a bit on this because i think it's kind of a big deal. >> the q 2 sales, by the way, that's a billion dollars, billion-dollar short fall. >> the revenue -- it's a big miss you go back to the middle of the july, end of july. $57 stock. two weeks later trading 46 on commentary basically like we hear now i think we go become and revisit that august low. i think it was 46. regardless of what you think about valuation clarity going forward, u.s.-china. i think the stock is destined to trade that low and we'll see what happens when we get there but to karen's point i'm surprised it's not having -- this should be bigger nan cisco is my sense. >> what i would love to know and maybe you can only figure out by reading the transcript at this point is qualitatively where did they see -- was this a consistent hang back in terms of spend throughout the quarter or was it more recent as the china traed headlines got more tense. >> i think the whole quarter was
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bad. >> the interesting think about cisco on a fiscal calendar reporting later you might get more clarity in terms of what's happening recently in time. >>en a the pressure -- they process ut it out once before and now again. to guy's point the 46 number, 58 to 46 and here we are back again. but the problem i see going forward is we need to see them actually put us back in place with a quarter and they can't keep doing this because if the rest of the market isn't quite as negative, unless that changes in the next quarter then cisco was right but otherwise is this more of a cisco issue right now. >> you think so. >> it could be the competition has gotten fierce. >> yes. >> and we know there is not one, two but two ob three, four competitors with cisco they're still the big one. but they have competition. >> so earnings are lagging and guidance is leading. this is the second time to your point that we have heard about lowering guidance. i don't think it's so much as a
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macrocall anymore. it's a cisco specific call. >> let's get to the chip stocks ripping through the the last month as the semi surge heats. equal come check out nvidia no slouch it's up more than 12 peppers in the last month a whopping 56% on the year the company reporting tomorrow after the bill options traders bet that the semi stock can surge higher. mike is in san francisco with all the action hey, mike. >> hi, there the calls outtraded puts by two to one in themation ohs markets implying a move of 6.8%. in line with the 6.19% is averaged offer the last eight quarters most active were the november $2.20 trading just over $2 a the buyer making a bet it rises above the $2 they paid i'd also point out you can see also not just buy what they are doing but what they aren't if you bought the 2.10s that's
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breaking even at that's probably the bet they are expecting to make here low probability bet options market thinks there is a 20% chance to get that high. >> thanks for that mike. for more "options action" tune in to the full show. that's on friday which is not tomorrow y.'s frida 5:30 p.m. eastern time up next. final trades ions. >> announcer: "options action" is sponsored by think or swim by is sponsored by think or swim by td 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 weveryone, looknk isn'tat your phones.
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time to reveal whether you at home buy pete's pitch on american express it was close but no cigar america is not buying pete's pitch on amex but at least we get to play tony braxton noinl this for you, pete final trades go ahead. >> the wrong about american express but disney flying to the upside sell the december 50 calls. >> steve grasso sfoo sticking with west rock wrk must hold $40. >> chair wom. >> wal-mart reporting tomorrow i like target better. >> you know i like.
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>> a version. >> i like jim braxton. >> love jim bracket ton. >> i don't know who that is. >> jw. remember talking about tickets at the -- jwn. >> that does it for us see you tomorrow at five for more fast. misdemeanor with "mad money" with jim cramer starts now. >> my mission is simple to make you money. i'm here to level the playing field for all investors. there is 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 cy america. i'm not trying to make you makeo some money my job is not just to entertain but educate and teach. call me at 1-800-743-cnbc or tweet me @jim cramer whenever you buy a stock you need to exercise a certain amount of skepticism, investing in a company involves multiple leap of


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