Transcripts For CNBC Fast Money 20240714

Says this is one of the best looking charts in the entire market we will tell you what it is. First do you hear that whats that that is the countdown to the next round of tariffs. Come midnight sunday tariffs creased to 5 on some of the remaining goods from china many big businesses are warning the new round of tariffs will be a direct hit to consumers but today the market rallied on renewed hopes of a trade deal. Is the market putting too much stock a trade deal happening or is it the calm before the storm . Guy. We addressed it last night. Secita is with us. We were on squawk boxa coupl of weeks ago we did like nine hours one morning. I said dont short a dull market and it has proven me and i think it will be correct for the new few days into wednesday. I dont think anything has been resolved i think the problems that got us down 800 a couple of weeks ago are the same problems that exist today. Bonds continue to get negative yields all of these are huge problems the market i think cancontinue to rally though on the back of the fact that people will be optimistic on a weekend, who wants to be short into the weekend given what could happen . It is just one of those things where the market levitates into the long weekends. It is a long weekend though. How about 20 billion coming into equities . How about what the performance was this month so if you look at what did perform and what didnt perform, you will see that flipflop go into month end as far as pension fund thats 20 billion. Yes what did you make of the rally for the past couple of days, savita it has been bouncing around in the tight trading range i think we are trying to absorb what will be coming next when you listen to Companies Going to be hit by the tariffs, theyre talking about not actually being able to pass the price increase to the consumer so i guess theres good and bad because the consumer wont necessarily be whacked by this because the companies will eat the extra price hike but corporate profits potentially will take a hit from this thats the scary part of the tariff scenario. This will be a long, long story. I dont think it even gets resolved by the end of this year i think it moves into election year, and i think it is a continued overhang on the market. Savita, if thats the scenario we will look at the full 550 billion worth of china being tariffed at an even potentially higher rate than originally announced because of the most recent increases. What is the impact them . Most likely i think a lot of people are trying to figure out the effect on the economy they would love to see it in different tactics, love to see it behind the scenes, love to see it petered out in a way that is not moving World Markets around the way it is i think as far as the markets concerned, it is going back to july 31st, you have to go back to the rate cut we had the first in ten years the stock market, the s p 500 was trading above 3,000 then, right . So the next day it was august 1st where we got that tweet. Thats what im saying if it was done behind the scenes we wouldnt have had such a massive reaction, a violent reaction downward. To savitas point, we spent most of august trading in this range. Guy said, dont short a dull market fine, we can get back to 3,000 it could be a little high if the lies on twitter were a little better than they were, that sort of thing i think it is important to remember that the stock market since january 2018 here in the u. S. , it has been one step up and two or three back. The incremental highs, three highs we had since january 2018 have not been particularly impressive and theyve not been a place to buy a breakout by any means. The opportunities have been after the sell outs. But it is lining up for one or the other so were building sort of a more their row base, if you will. So weve been bouncing around back here, and the market hasnt broken down either so thats been a process what do you mean . Three times, steve, since january we had 10 selloff, 7 selloff, 20 selloff serious selloffs. You started from august im looking at the august number the lows have been slightly higher lows, which is constructive, and theyve thrown everything at this market that you would think would send it in a death spiral. What are you talking about, sending it dude, look at fed funds. Theyre pricing in at least a 25 basis point cut next month, some people are thinking 50 throwing that is that bullish though . Everything has been so completely negative for the marketplace. As far as trade is concerned thats true, but we had the back stop of the fed the fed always seems to come in. I dont know if we had a back stop i dont know if we had a back stop sounds like powell and trump have been fighting like cats and dogs. Hold on on july 31st, chairman powell said one of the reasons they did the mid quarter adjustment was to combat some of the issues that the trade stuff. So to me it seems balanced. Trade stuff and lack of inflation. But every time we think, okay, it is going to be 25, we sort of have to back away from that. So now we had to push it to the 50 basis points to get to 25, but i dont think anything is carved in stone. Thats what the market was telling you. Lets extrapolate that though if this, the next round of tariffs, two rounds, whatever it may be, hits corporate profits and we have to ratchet down expectations that is sure to hit the markets i would think. There has to be an adjustment. In the stocks to a certain extent, i mean what is interesting to me is if you look at the companies with the highest import exposure to china, theyve already massively derated. They derated almost three times as much as the market multiple has shrunk so i feel like some of this is actually in the stocks then, you know, when you look at the actual companies that will be impacted, i mean the good news is a lot of u. S. Corporates have been in the process for the last decade of sourcing outside of china so this isnt all hitting Corporate America by surprise. They always knew they had risk of china exposure. Sure. So now i think that what happens next is it is a little bit of a song and dance. I think what is interesting is we are moving into a president ial election year, so that also creates a little bit more drama around how much of an economic hit is trump willing to take in order to play nice with china. So you think theres a back stop of trump . Theres trump, the election year, and theres the fed. Right. Because i do think the fed has has been relatively accommodative and supportive of risk assets. The problem with trying to figure out the impact to corporate profits is that just taking a look at how many companies, you know, bring in how many goods from china, it has never given you the full impact, right . Take a look at what auto desk said or box said just this week. Sisco i think as well. Sisco who we thought changed dramatically it comes down to where is the confidence with cap ex i agree with savita and i have said it for a while. I think we will have a series of were going back to the table, were not at the table wu of b but with that, you said something, these tariffs will take case on a sunday night or monday night im not sure thats the case you could see something where President Trump said, president xi and i had a beautiful conversation, were going to pull the tariffs he is so focused on the market i could see Something Like that happening. With that said, you are at a point of diminishing margin returns where the market now seems to more and more discount his comments i think next week is a positive week i think we set up for really dicey midseptember. All right you caught the show yesterday, you will remember we showed you this chart of the s p 500 forming what brian kelly called a megaphone pattern. Some are saying it is setting us up for a major drop. The next guest is in that camp svenn joins us from london we didnt have a technician to interpret the chart for us, but what did you see here . Hi, melissa it is a broadening pattern we have been watching for quite a few months and it was interesting watching the leadup to july. In july we had the anticipation with the fed rate cut, and the markets have been running in 2019 really from fed meeting to fed meeting, from fed speech to fed speech when the rate cut came, we tagged the bottom evenly for three weeks in a row and then we reversed, regarding as was said the trump tweet. We have a validation of the upper trend line obviously the question is can bulls get above that trend line. It is not necessarily a bearish pattern because if you can get above the trend line and rally on you can argue a massive rally coming the problem is and i am looking for validation here of some sort. Is besides the megaphone pattern we actually build what is called a rising wedge in 2019 what i am impressed about by all of these problems is that it has been technically clean we go from the noisy headlines where markets could move up or down on any given day for any reason, and yet the patterns are being clean so far but what happened in august is that rising wedge actually broke to the down side kind of your classic warning sign so markets will have to repair that or face risk of further down side to come. So can you bottom line that for us, sven as i understand it, you are still seeing a buyable dip sometime in the next couple of months, but after that who knows . Well, absolutely. Actually, what were looking at here short term is there is a possibility if the vix goes up to 2830, currently a pattern on the vix that suggests it is a distinct possibility, we may have a buyable look, these megaphone patterns, this is a longterm structural chart it is not going to play out in a Straight Line or in a few weeks necessarily. This could go on for months. I think generally people need to be aware it is out there, as long as it is not invalidated and it is clearly not invalidated. Thats take risk for bulls, and it needs to be moved higher and that means above that trend line otherwise, with the break of 2,700, you are starting to risk that this pattern goes active. Sven, you know im a target. You open up a target, it is 2100. I think you do extraordinarily thoughtful work, bullish and bearish. Is it just about the trade war or is it about and you tweeted to Say Something we talked about, u. S. Debt to gdp 105 give or take. 30 of sovereign bonds have negative yields. Currency crisis or currency war. Theres so many things other than u. S. china going on that seem to be potentially negative for the market yes obviously if we get a china deal we can have a massive relief rally for that reason, but im looking at it from a larger cycle per expectisspective what has happened in the last year and a half with Central Banks across the globe has been insightful look, originally the emergency measures would be temporary, and then they morphed into a permanent aspect of the Market Structure and Central Banks always intervene when markets got into any sort of trouble to the credit of the u. S. Fed, and im highly critical of them, they at least try to raise rates and tried to reduce their Balance Sheet but it failed miserably last year as the tenyear got to 3. 2 the question was almost, you know, this big debt construct weve created over the last ten years is not sustainable with higher rates we got that answer last year when we hit the 3. 2 on the tenyear and weve completely collapsed since then so what is the central bank efficacy game here Going Forward . The fed actually is cutting rates here with the financial conditions being the loosest in 25 years it is unfathomable when you have loose financial conditions, typically Central Banks raise rates. What are they trying to accomplish here by going even looser than what weve seen before i mean look at the housing data you are getting with mortgage apps, with yield collapsing, the 30year making alltime lows we dont really see any growth here in the Housing Market so what is the end game here in terms of efficacy . I worry that obviously we are reaching a point where Central Banks can only do so much. Right. Going back to the structural view of the market, sven, you think without a china trade dale and with, as you mentioned, Central Banks seeming to lose control of what is going on here, the 2,100 on the s p 500 could be in the sights of Market Participants yes, i mean, look, it sounds dramatic but it really isnt if you go back to the 2009 lows actually, theres a technical level at 382 it brings us back to the 2015 highs. It is from that perspective not dramatic ironically thats what the bond market has been signaling, right. The tenyear is already back to the levels of the u. S. Election in 2016. So, again, you have nine Major Economies around the globe already either in recession or at the verge of a recession, and this china trade deal, the longer it has been dragging on and dragging on, it keeps everybody here on the side playing with fire here, and i think this is why weve seen the violent reactions now to every single news headline i think the market is getting impatient. The market wants this resolved to the extent this gets pushed into next year perhaps, i think markets will lose patience as we see europe, for example, overtly flirting here with recession at this point sven, thanks. Good to see you. Sven henrich what did you make of it . When i saw in the charts 2350, it was a big drop and we touched it when you say 2100, i never discount any of this all of this is always possible you always rip through theres lack of support when people start to see blood in the street so is it possible . Yes. Is it probable no coming up, it is the bestlooking chart in the entire market according to one of our traders. Need a hint . It is a big tech name. We will tell you what it is and why it is looking so good. Things are looking ugly for ulta beauty after reporting results we will tell you what went wrong. Live from new york citys times square, much more fast money right after this from the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Welcome back to fast money big news from apple today. The Company Announcing it will hold its next iphone event on september 10th, but apple may experience some product pain heading into next month. Starting this sunday, where will devices including the apple watch and air pods, but get hit with a 15 tariff. Josh lipton in San Francisco with more on all of this hey, josh. Reporter melissa, we talk about tim cooks skills as an executive, as a supply chain editor and as a diplomat he has kept the lines of communication open with this white house. How well will that now serve cook as apple navigates the trade tensions and tariff threats . A test is coming up. Apple could face 15 tear ifs beginning september 1st. Apple has sold an estimated 80 million watches and 50 millionaire pods they could decide to absorb it at a cost of 500 Million Dollars or it could pass along price increases to consumers analysts are more concerned about potential levies imposed on the iphone possibly coming on december 15 it if apple is hit with the potential tariffs, evercore estimates it could take a hit of at least 5 billion. There is another possibility, that Company Earns exemption for the tariffs. The president said he thought cook made a good case when it comes to the levies. Tim was talking to me about tariffs. One of the things, he made a good case, is that samsung is their number one competitor and samsung is not paying tariffs because theyre based in south korea. It is tough for apple to pay tariffs if theyre competing with a very good company. Reporter now, i checked in with gene munster at Loup Ventures he bets apple wont be hit with tariffs on finished products and the company will earn these exemptions munster says the company wont want to penalize such popular products from an iconic american company. You must think that apple will absorb the cost, when you say 5 billion for all of it, that is for what time frame . That was actually that was with evercore. Thats really if all of the tariffs go through with his math he think they would have to take a 5 billion hit there. Of course, theres a bunch of levers cook could try to pull here you know, you could absorb the tariffs. You could try to pass along some price increases. You could do a combination of the two. Some people think if push came to shove he could move more manufacturing out of china, maybe to other places like vietnam. I would add that when i talked to cook the last time they reported earnings, at that point he said he had made no significant changes to his supply chain a fourth option could be you could lean on your suppliers to make price concessions to offset the tariff impact. We will see, melissa. Josh, thank you josh lipton in San Francisco dan nathan, what do you think it does . Here is the thing with the tariffs related to apple and getting an exam shon apple owns the high market in u. S. And samsung sells to a lower price point. To me with double the asp apple has over samsung, i dont think it is a great case it is a good place if you want to play politics and you want a favor, but i dont know how the president can favor apples products over whirlpools products or Something Like that. It gets into a tricky spot i do not think apple gets exempt. Lets say apple doesnt get the exemption, they pay the tariff, lets say apple doesnt pass it on to the consumer, squeeze it out of the supply chain. It is all of these companies, a rupp will effe Ripple Effect on the supply chain that pays the tariffs and numbers are squeezed what happens on Companies Like apple, it is big, but for the overall s p 500 even if you put through all of the tariffs on the table right now, the hit to corporate earnings was only about a percentage point of growth the direct impact arguably is less important, but the indirect impact is that folks cease all operations, stop spending on new projects, theres supply Chain Disruption this mucks things up at a more indirect level i think the costs are relatively manageable for the overall market. I think the stock has been performing well as of late, and when you look at what is really going to be taxed, im worry about the iphone the iphone is the biggest seller, the biggest percentage of the revenues. Were not looking at that until december so we have a bunch of other stuff thats very small. So when you add that big number together, it sounds cataclysmic. But when you look at what you are really the wearables and the desktops, it doesnt amount to a whole lot of their revenues even though it is significant, it is not the iphone the iphone comes on in december. Thats what i would be concerned about. Lets stick with technology we mentioned the bestlooking chart in the entire market unbelievably, this best looking chart is courtesy of dan nathan. I hope he doesnt have to do one tomorrow. What is interesting about this, it is microsoft. It is the largest market cap on the planet at over a trillion dollars. It is interesting to me because you guys know im a microsoft, apple, google and amazon guy microsoft stands out not because of the size of it, but look at the consolidation it has made above 130 since the beginning of june it held the up trend since december and feels it wants to break out. We talk about trade all the time this stock is telling you a substantive trade deal, a trade deal that affects it theft and not just trade imbalance, but it Shows Optimism amazon did down 12 . Amazon is below the up trend from december. It looks like a broken chart and then you have Google Google and apple have not retaken the gap highs they had after strong q2 earnings that isa signal of relative weakness, whereas microsoft is showing lots of signs of relative strength. Can i ask a question . Yes. You raised your hand. I thought i would be nice since he brought an optimistic chart to the table for a change. Why cant the chart be, microsoft looks great, its business is more insulated from china than some of the other ones it is fine, as opposed to it is a statement on whether or not a china trade deal is im not saying it is a statement. I am saying theres a lot of things wrapped up in there according to what auto desk had to say, it is a much, much smaller company. There are risks here it is used as a piggy bank if for some reason everything goes south because theres a lot of concentration in the name. That stock is up 36 on the year but it is constructive. I think microsoft, to savitas point is getting repriced in terms of valuation now at 24 times, maybe it is not as expensive as you might have thought it was five or six years ago. All right we are just Getting Started here on fast money. Here is what is coming up next oil alert. Rb ouch. Welcome back to fast money. Stocks are out be nice, guy no hitting on the desk stocks rallying on wall street on renewed hopes of a trade deal oil benefitting from tensions between the u. S. And china that got us thinking what would happen to crude if we struck a trade deal tomorrow or on the flip side what would happen if talks were completely to collapse. Lets bring in helene croft to weigh in helena, great to speak with you. I guess we are trying to figure out what the range for oil could be in the best case and worst Case Scenario. Lets start off with best Case Scenario how high could we go if there was a deal tomorrow . I mean best Case Scenario, deal tomorrow, we think oil, wti is probably going back up to 60. You probably would get some producer hedging at that point which would cast the immediate upside the physical market is looking better we have had inventory draws. We still have a lot of geopolitical tension in the middle east, still a lot of issues around iran so if we get the trade war off ramp, we think the geopolitical stories become more important as well as improving physical market stories so the question is at that point could you potentially get back to 66, the highs of earlier this year. I think we would need to have more geopolitical noise, we would have to have opec coming out in a couple of weeks time and saying they could potentially go deeper. Thats the type of situation to get you back to the highs we saw earlier this year. 66 would not be an issue even though so many economies around the world are close to or in contraction . Well, again, we think going to 60 is where we make the first move up to the question about getting to sort of the highs of earlier this year is do we continue to see inventory draws, do we continue to have opec out there saying, whatever it takes. Because if you look at the opec producers, they certainly want Prices Higher than even, you know, 60. They are looking more to get to like 70. So the question is how constructive are they going to be, and then the issue of iran i mean we do have still a lot of tension involving iran we have a shadow war going on with israeli strike on targets in places like syria and iraq that has potential to cause a greater conflict in the middle east those are the type of things that could come together to bring oil to the highs of earlier this year. Lets go to the down side, the worst Case Scenario. What would that be in your view . I mean the things fall apart scenario, if we have talks break off tomorrow, we think we certainly would be retesting the 52 mark and potentially going down to about 50. Thats on trade war alone. There is even a more bearish scenario, and that would be if the Iranian Nuclear talks actually produced some type of breakthrough and then we start thinking about 2 Million Barrels of Iranian Oil Coming back on to the market that i think would be the worst Case Scenario for oil because it would be a big hit to the physical market, and the question is there anything opec could do in that type of scenario to put a floor under prices i think iran is really important to watch, both from a bull case and a bear case. Helena, great to see you. Helena croft, rbc. Great to see you is this in a good way or a bad way . Right now it looks like a value trap but i think oil is a pivot. What i worry about with oil and crude is just the dollar i mean weve had so much kind of consternation about currencies, especially about a stronger dollar, and thats anathema to oil. Thats what we want to think about. Theres supply, theres iran, theres geo ppolitics but the everpresent risk of a stronger dollar scenario. Oil has been in decline you go back to 2018 it has been in a series of not really lower lows there is a day of reckoning. Helena mentioned what the down side would be. You see a lot of headwinds for oil. We are still in over supply mode in oil you couldnt have scripted a better scenario for a bullish outcome in crude and we havent gotten that. So i think lower prices. I just would make one point on the geopolitical standpoint the likelihood of anything happening with iran right now is not great. If you think about they have the israelis have an election coming up soon, we have an election coming up very soon it is one of the weird situations i think that came out of the g7. I wouldnt think about any optimism about that. Then you could extrapolate it to the excitement about some sort of deal with north korea over the last two years nothing is happening any time soon so anything built into the price of oil is not too good. It is interesting we go to the smart board and do power pitch. I tried to power pitch and that didnt work all that well. But i tell you, you look at a name for example, look at schlumberger this stock is trading at 32 it is lower than it was in 200809. You remember how bad things were then so as much as you want to say cheap value, and she is right, it is extraordinarily difficult to get your arms around i think to steves point you have to wait these out coming up, the mouse that roared how disneys streaming service could be bigger than everyone thinks we will explain. Also workday on the move after hours. We will give you highlights from the earnings calls more fast money straight ahead. To managing website inventory. And network bandwidth. Giving you a nice bir your competition. Thats the power of edgetoedge intelligence. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back to fast money. Check out this dollar darling. Dollar general surging double digits after crushing earnings estimates and raising full year guidance as other parts of the retail trade struggled with earnings, luxury brand tiffany plunged before recouping losses. Williamssonoma down on the back of the report. Guy, what was your call on Dollar General we talked about that dollar gen a couple of weeks ago. Said it was pricey, probably going to backfire on me. But i said dollar gen in earnings looks pretty good dan, totally what is the word eviscerated me thank you, mel this was a power pitch as well you know what . It is still not expensive at 21 times sold earnings. Although the stock has been on fire and seemingly impervious to the tape, i think you have to stay with this name. I think todays price action in in and walmart, you know, over the last couple of weeks is telling you something interesting. When you look at williamssonoma, you mentioned tiffany, tapestry, capri, theres a bifurcation in retail. It is not just the names we know the kohls, macys, all of that stuff is separate it is a structural issue what i would think about going into the Holiday Season, back to school and then the Holiday Season, how much of the trade war will impact the ability of retailers to discount during the Holiday Season it has been a huge factor in retail sales in q4 i dont think it sets up as bullish. I dont look at Dollar General making new highs and blowing out like this and saying you want to buy Retail Stocks in gq4 i dont see it. I think you want to buy discount retailers here is the thing. If you look at oil prices and discount versus luxury, it is the same chart lower prices give retailers a huge boost because it is a regressive tax, right . I think what is interesting right now, the chart that we saw earlier on jobless claims, thats what you want to watch. Because the u. S. Especially the lower end, weve seen huge increases in minimum wage, low oil and gas prices it has been great for lower income consumers but now as things start to change on either level, thats where you want to watch out. I think, you know, a lot of the names dan talked about kohls and macys, but i look at kohls going into christmas hand they have the jv with amazon theres been so much bad news. Just for a contrarian play i would like to think about kohls going into christmas because i think so much of the negativity really . It is not my Favorite Retail name one of my favorites is costco, still even with the latest pop but kohls as a contrarian bet i think is very attractive for people who want to play in that segment. Lets switch gears here the mouse is in the house. A lot of houses actually according to a ubs survey a whop 3 of households plan to subscribe to new streaming service. Among people who intend to subscribe, nearly 60 said they would cancel at least one current streaming service. That could mean more bad news for netflix, which is down 22 since midjuly and just entered the proverbial death cross. Oh, no. Is everyone understanding the power of disney plus dan, you are one of the people that will subscribe . I love it listen, i think it is interesting 43 of the responses i think it will go higher this will be just for disney plus, you know, a star wars series that only will be there they are pulling off all of the marvel stuff it is not about netflix in my opinion but about disney in 2015 disney topped out at 120 and it spent years, and it broke out when they introduce it disney plus in april above 120 and it went to 130 it has held 130. It traded as high as 147 i think you trade this thing all day long you buy it you would love to see a gap fill back towards below 130 because you want to buy it in front of the numbers when they start issuing them in the fall. You had a quizzical look because dan opened his mouth. It sounded like to me, mandelorean . I knew you were going to ask that a descend ant from we all know what that is. The main point is they are making content for this lucas universe, the marvel will be there. Theres a glow in your eye i have never seen. He is the biggest star wars fan. Guy has not seen a single i have not seen a single. Theres no shock im not going to see him though he am sure he is a good character. They will make 6 this year, 6 next year, maybe they roll into the valuation. But it is still you are making a bit of a guy, you just said in the last block about microsoft, moving the recurring revenue scene. You could make the sake argument. They did it already. Disney is launching a new product and we dont know the up tick. We have seen netflix go from zero streaming subscribers to 150 million globally in seven years. We know how it is going to go. We know when they announced the deal with hugh low, we will see a lot of streaming, and this is the play for the next ten years. My question, is disney added to maga . I dont know we will have to move the letters around i dont know. Magad im not sure first of all, how many people was the poll with . 1,000 people, whatever the number was. A sample. Insignificant sample to me. But i have always been on record saying i think people will do this streaming where you will own a bunch of them. I dont think it is necessarily going to take away from one or the other. Netflix has its own individual problems, up 10 yeartodate. Still in a trending down cycle, so that needs to be rescued. Disney, to dans point, has held these levels pretty unbelievably to me. I thought 130 was going to be the death knell for that i thought it would retrace it hasnt so far i think theres still tail winds. Parks, 24 billion theres a lot of things to get excited about disney im not going to rush out and buy it at this level i will wait for it to hold coming up, ultas ugly quarter. One trader just made a Million Dollar bet that the bottom wocol be in for one big bank one more fast money after this more fast money after th. Did you know that americans that bought gold in 2005 quadrupled their money by 2012 . And even now many experts predict the next gold rush is just beginning. So dont wait another day. Physical coins are easy to buy and sell and one of the best ways to protect your life savings from the next financial meltdown. [narrator] today, the u. S. Money reserve announces the Immediate Release of u. S. Governmentissued solid gold coins for the incredible price on your screen. 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Gold is now on sale at prices unseen in years and this year could be one of the greatest goldbuying opportunities of all time call now while vault inventory remains. As one of the largest u. S. Gold coin distributors in the country, the u. S. Money reserve has proudly served hundreds of thousands of clients worldwide. Dont wait another minute, call now to purchase your American Eagle coins at cost for the amazing price on your screen. Welcome back to fast. An earnings alert on ulta. The stock tanking, down 21 . Back to headquarters with the details, eric chemi. Reporter ulta is down 20 on the quarter report, missing on the top and bottom lines it came with a significant miss on samestore sales, another negative in a huge fullyear guidance cut, dropping from about 13 a share down to sb 1 share. Loup capital analyst anthony chucumba weighed in saying it was the first guidance cut in his memory and he noted the outlook revision was sizable given how good the companys first half was moments ago when the call ceo mary dylan cited softness in the u. S. Cosmetics market, she said growth has been slowing and recently turned negative in the category despite that, the stock positive yeartodate but barely. Ulta has benefited by being the home of Kylie Jenners cosmetics line clearly it is not enough now back to you. Thank you i thought there was a lipstick, women would always buy things like lipstick when times were tough because it is a small luxury. Talk to the lady over here. I thought you wanted to comment on new york cio, i will tell yo. I have two teenage daughters and this is a discretionary spend. If you are a woman in the workplace, i can see it. My kids have spent a lot of money at ulta and that would be a place where when things get tight i want to make another market when things get hit near highs, you have to look for it over the next couple of months. No doubt about it, it was a darling over the last few years. So many people were in this and they had traffic and sales when the malls were not getting traffic and sales, they were able to pull it out of behind, out of left field. A lot of it was the social aspect of it, where they were paying a lot of social media people that were just lifting up their brand. They giveaway half of today, i think it is about positioning, half a years performance. It is about positioning. The darlings that you have, people will look elsewhere they were enamored by the growth, by sales all of a sudden now if you cant put it up, you get the Investment Community to say, well, you know what . What have you done for me lately. Yes. You know what the weirdest trade that has worked beautifully this year, is if you shorted the ten most crowded stocks and bought the ten most underweighted stocks in u. S. Mutual fund, you would have made 16 Percentage Points so far this year. Like way better than any other hedge fund out there i mean it is a pretty insane level that you are getting just from positioning i think you are completely right. I thought the most crowded trades were the big tech stocks . No, not necessarily. Like netflix has gone from 380 to 300 tesla has i mean theres a lot of these scenarios. What did we mention last night . Remember i said you had the beautiful pashmina yes, five below. Five below. Did you notice when you drive around, you see a five below, you know what is next door to it a lot of times ulta beauty you might want to fact check that why do i bring it up five below and ulta didnt people clearly are not going with that said, 245 was the low i think back on december 24th. That is your line in the sand because as lousy as this quarter was, i think it actually looks like value around the 250 level. Up next, the big bet on a big bank why one options trader thinks the pain could be over for one of the big financials. Live from the nasdaq in times square, much more fast money still ahead. At fidelity, we believe your money should always be working harder. Thats why, your cash automatically goes into a Money Market Fund when you open a new account. Just another reminder of the value youll find at fidelity. Open an account today. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. We believe in education built for all people. , [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Welcome back to fast money the financials flying higher today, positive over the last week the Options Market thinks one bank is signaling the bottom is in dan is at the plasma with options action lets talk about morgan stanley, one of the big investment banks here. Put volume was three times that of calls today, but it didnt look particularly bearish. It looked like an opening seller of 20,000 of the december 36 puts when the stock was trieding if you are a seller of puts, that is a bullish trade. So taking in 60 cents for 20,000, that would be 1. 2 Million Dollars in premium the stock would take in. The worst Case Scenario, the trader would be put 2 million shares of stock at 36, but 35 40 plus the premium they took in. An interesting trade on a day where financials were kind of rocking and rolling. Interesting because last night around the same time guy adami sauntered to the smart board and made a bullish power pitch, shortterm trade on city group it sounded like guy is leading the pack with bullish trading activity on morgan stanley, the stock is up 4 of the year, under performing its pieer Goldman Sachs up 20 look at this it looked like a textbook, head and shoulders. One of the interestings things about the 36 strike, was the low in december here does this stock have a little room to run . If you look at the down side, yeah, maybe possibly up to the mid 40s here in the near term. That may be what that trader is betting against by selling the down side puts in november expiration lets look at the chart here going back five years. This was the ramp after the november 2016 election, and this was the level the stock was trading the day after the election thats 36 bucks here so it appears to me this trader is picking a very interesting level that would be basically a round trip to the december lows and the november 16 breakout session here so, you know, interesting. Under performing here. Not a particularly bullish bet because the worst Case Scenario nor the trade is the stock is down 15 on the november expiration. Do you love financials, is a sheet a savita i love it it is not super cheap, it is real value i think it was the third best sector this earnings season in terms of the number of beats it is paying a real dividend a little known fact about financials, it has the highest shareholder year of any sector in the s p 500 if you add up buy backs and dividend yields because it is so cheap, i mean it is a beautiful story in an environment where Interest Rates are super low the problem is nobody will trade it against anything except for the yield curve and rates. Right. So it is kind of mistakenly assumed to be a rate play but i think it is so much more it is quality, it is dividends, it is cash returns it is delevered. A lot going on with the sector different than in 2007. You should have put shareholder yield in your power pitch. Yours wasnt a beautiful story last night it sounded like a beautiful store. For more options action, check out the few show tomorrow at 5 30 p. M. Eastern time. Next up, final trade wick i want to know what im 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 its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. Final trade time steve grasso. Tse was my final trade last night, final trade again in the last three days up 15 . It was clobbered and now starting to see money coming back into the space. Tse. Savita . I will stick with u. S. Financials it has the highest shareholder yield. It is inexpensive. It is positive earnings growth, and it is the most hated sector in the s p 500 it is a real contrarian bet. Dan. Microsoft calls. Cvs, sister. See you tomorrow at 5 00. My mission is simple to make you money. Im here to level the Playing Field for all investors. Theres always a bull market somewhere and i promise to help you find it. Mad money starts now hey, im cramer. Welcome to mad money. Welcome to cramerica other peoplewant to make friends. Im just trying to make you some money. My job is not just to entertain you, but to educate you so call me at 1800743cnbc or tweet me at jim cramer. Im constantly telling you the discipline always trumps conviction i say it over and over and over agai