Transcripts For CNBC Fast Money 20240712

Earnings, and we will bring you the trade. First, we start off with the amazing chase. The s p 500 and nasdaq starting at new alltime highs and the record move is forcing wall street analysts to play a game of catchup. And as Morgan Stanley is up on the price tag of apple for a street high of 1. 20 a share, and it is where apple past the beginning of the month. And with tesla, the stock is 1247 and the stock is now trading above 2,000 a share. So what is this giant game of catchup saying about the stock market that we are in. Guy adami . Well, first of all, welcome back mel back, mels, and i love that you are on every show since your return, the and so have you watched any baseball since you were gone . Yes, i did. No doubt you saw mike trout play, and to bring that up because of the absurdity of everything, a mike trout signed rookie card sold at action for 4 million and i dont point it out to be glib, but point it out because everything is chasing everything right now, andpel is one of the things they are and apple is one of the things they are chasing. Now, katy huber is not one of the things that is chasing, but she is ahead of the curve analysts over at Morgan Stanley. I think it is important to point out that apple traded nearly 90 million shares which is three times the normal volume on a huge move to the upside and the technici technicians are going to be watching the next couple of days closely for potential reversal in the name. The name speaks volumes in apple. Kim it is the evolution of valuation. I think that we find creative ways and not necessarily we, but the Analyst Community and maybe we do, too, because we have to explain it. To take former comps and find new comps, and apple is a greatm example of that, because it was a hardware company, and then the blended multiple and now katy huber huberty, she is talking about comparing it to other Technology Platforms and talking about where apple trades at a slight premium or brands or consumer platform. So we have come up with the entirely new way to value apple, and maybe that is fair with 555 million subscriberbased businesses and all ancillary, and wed have seen and dissected it over and over again, but that is what is happening, the evolution of the valuation, and katy huberty in january had a 368 in the stock, and well out in front and we talk about it all of the time in a complimentary way, because she is clearly one of the most thoughtful analysts on apple, but in july she went from 330 to 430 effectively when the stock had run after she had downgraded it, so i mean, it is like, at some point you have to find different ways to value the stocks. We mentioned tesla at obviously, that is a name that people spend a lot of time to creative ways to value, but apple, that is what the upgrade is about in my view. At what point does getting creative, karen, sound the alarm for you in terms of justifying a valuation on a stock that wall street may want to remain overweight on, but cant remain 100 under the current trade in terms of the price target . Right. I mean, i find this game very difficult in that, you know, so, reading it was interesting that it is not a hardware company, and the hardware is more like peloton is one of the comps, and then the services business, and then lets look at cash flow, and what is the cash flow, and the Free Cash Flow number versus the rest of the market, and sort of, you know, turning themselves into a pretzel to find new ways of justifying a higher multiple, but kind of embedded in that is that this market is going to continue to retain this multiple or perhaps a higher multiple if we see more stimulus, if we see the fed do more. So, i mean, im long apple. I hate that it went up however much friday over the stock split and today, because obviously, we all know that is not creating any real value. I hate that kind of thing, but i come back to this again and again, i dont have a better alternative, because i dont want to be in cash, because i am afraid of the inflation, and therefore cash being worth less, so i guess fundamentally, i am buying into the fact that this market deserves a higher multiple because of that macro. You want to be in Great Companies and you back into how do i come up into a higher multiple. On the street, i saw 27 buys and 12 holds and maybe a few sells. But everyone is sort of falling over themselves to be the highest on the street. I hate that kind of, i mean, i like to see them come out with big earnings, and that is the most important data to me. And they had big Earnings Report the last one, dan, but it still does not get you to finding creative ways to finding valuation or does it is it that there is no alternative and therefore you do find the creative ways to stay in these sorts of stocks, because it is not just apple that we mentioned, but tesla, and any of the stocks particularly the big tech stocks that people dont want to abandon yet, because this is where the gains are . Well, they are clearly where the gains are, and clearly winning the pandemic economy and a lot of the investors have said that nothing is going to change from here on out for the companies, so the valuation thing is a hard one. Amazon, you know, it is one of the best performing stocks in the last 25 years and not an analyst on earth who could give a reason of why it should change at that valuation until it started to grow in the valuation, and still stretched compared to the mega cap. So unless we get creative with the valuation stories in the middle of the stock market or the risk asset mania, and that is where we are here, and who knows when that is going to end one way or another. I will mention this though, and i was remarking, you know, apple went up 3 after closing 5 on friday and do the math on 2 trillion market cap, and that is absolutely remarkable, but then it sold off hard. Amazon sold off hard. Tesla sold off hard and closed well off of the highs, but you know what started to rip value. We saw boeing straight up. Jpmorgan went straight up, and sol of t some of the beatn up retailers and even that piece of junk g. E. Rallied straight up, so with the gap up above the prior high here, the investors are looking to broaden out the rally, and come out of the highteches, and then into the beaten up stuff, and they are seeing the path to the end of the tunnel at the health crisis, but i amt in s nt seeing what they see through plasma, but it is new highs and a dash for trash. Breaking news on delta, and we go to phil lebeau for that. Phil we have been talking about delta needing to cut a number of jobs come october 1st f theret, is not a c. A. R. E. S. Act ii. Today they have sent a letter saying how many pilots will have to be furloughed and it comes tout 1,941. There a big caveat, they are in the process of negotiating with thepilots the say, we can spread out the flying and maybe we dont have to furlough so much, but delta is saying that we need 9,400 for all of the flights we plan over the next 12 to 18 months, so as you are looking at the airline index, and keep in mind that delta along with the other airlines are supporting the unions who are really, it is the unions who are pushing hard for the c. A. R. E. S. Act ii and 25 billion new financing by congress to lock in the airline jobs through the end of march. So if that happens, this may all be a moot point, but at this point, nobody is counting on a c. A. R. E. S. Act ii before september 30th. One last note looking at the shares is of delta and keep in mind that the coo gil west is retiring at the end september. So a couple of headlines worth keeping in mind with delta and this pilot thing, melissa, with the furloughfurloughs, and thisa negotiation with all of the unions and the airlines. The airlines say, we have to have lower staffing and a reality october 1st, if there is not a c. A. R. E. S. Act 2. Thank you, phil lebeau in chicago. The airlines are taking flight in the back seat of some headlines. Astrazenica is considering fasttracking experimental vaccine use ahead of results. They say they will not have trial results until later in the use. And in separate news, the fda has authorized those to be allowed to use plasma within three days of the covid19 dy g diagnos diagnosis. Taking a look there, it is travel stocks, and airlines and more. Tim seymour, it is all about the vaccine for this group, and if it gets some more aid from the government, does that not smooth sailing, but it paves the way for a few more months of this these stocks well, for the airlines specifically, the c. A. R. E. S. Act is stimulus, and fiscal, and here, pay the workers, and this is where the airlines have issues, and this is where some of the healthier Balance Sheets are really a little bit of the standoff, because it is not about equity delusioilution, bus flying in the face of it. All travel stocks are not created equal, and Something Like a bookings has fared relatively well, so it is flat sit down 5 to the s p 500 before covid19, and they have cut the costs dramatically and and seeing the bookings to the second half of the year where mortality for a tech Company Effectively and even though it is and Online Travel company is not seen as high and therefore more defensive as people are saying, i can value this at 2022 multiple, and that is interesting that investors have to make. Would you go Online Travel, dan, instead of the travel stocks i think so. I think that not much is going to change when we get back on the other side of this virus about how people book. It may change how they travel, and obviously last week we talked about air bnb coming public in this year or the next few monthssh and there is a company that is really changing how people travel. So s i like the solutions that are scaleable, and expedia and booking was with a massive hold, and no visibility to other side of it. I suspect to get the consumers traveling the way they were, it is going to take a lot longer than people think. I think that this hope around therapies and vaccines and that it is going to be any time in the next few months or talking about election is nonsense. The fact that you are ripping the stock market on those sorts of headlines makes absolutely no sense to me. Well, the stocks are trucking the new record highs and your next guest says that playing defense is the best strategy. We go to mark, head of capital management. Thank you, melissa. Before we dive in, i wanted to channel a little eminem from 8mile, and say, i know the bad stuff and get it out of the way at the first of the year, i used the bear market word and i am happy to report that things were not as negative as we thought. The great news on the other end of that is the Long Short Fund up 3x and the market is up 15 instead of 5. And the second thing when we were together a few months ago, i did talk to about how all of the economic pain that i thought that was still ahead of us, and the market does not seem to care. So now that we have that out of the way, fire away. So, you still think that there is a reckoning, and even though market does not seem to care about it all, you are still sticking to your guns . Yeah, look. I feel like the risk reward really has not changed much since we started this conversation two years ago in october of 2018, and we were at record valuations then, and back to the record valuations again, and in fact, worse, because the earnings have declined. I mean, you are looking at since march 23rd, where the p. E. Was down to as low as 17, and we are up to 29. 2 for the overall market, and in certain stocks that you were talking about apple, and apples p. E. From 15 to 33, and that is sillyville. So we think that the risk reward is tough here. One thing that we talked the about last time in june was how the nominal value of stocks is up a little bit. It is actually up 5 for the year. But looking in real terms and denominate in gold instead of dollars, we are actually down 20 , and over again, the last 19, 20 months that we have been talking, we are down almost 44 , because of this devaluation of the currency that is going on. So a lot better places to put the capital today is gold, gold miner, and silver and silver minder miners and my favorite bitcoin. That is where you are citing the outperformance and what is your big gainers that you are still in yeah, thank you. If we think about the long short model, right. You have to be long certain things, and we have been long technology, particularly outside of the u. S. , and particularly in china, and that is our best winning trade, and what we call the top 20 which is the 20 concentrated longs from that long short portfolio, and we run that as a separate account as well, a and th well, and that is almost up 50, and Like Sea Limited and ten cent, and so chinese tech is doing better in the phangs. And the short side finally, the separation is occurring, and you have seen the companies overlevered and struggling like the retailers going down, and im with the traders on this, the euphoria over the vaccine, and the vaccine is like last years trade deal headline. There was no trade deal, and no vaccine, so you cant make a vaccine for the coronavirus as far as i know. Mark, i dont know this eminem guy, but i like this slim shady person, but not sure about the eminem and i would not say anything negative. I admire your work. Thank you, guy. And you said that october, because it is coinciding with Jerome Powell coming in saying that the Balance Sheet is on autopilot, and then the market went down 20 1 2, and so backtracked since. I thought that the market rallied because of the news alert that Jerome Powell would make a profoundly consequential speech of how the fed measures inflation which is folly, and neither here nor there, and that simple that the fed is there, and they are going to continue to be there and continue to move the goalposts . I think that you are dead spoton. I mean, that is exactly it. Interest rates are down 62 . Now, it does not mean that we went from 63 to 1, but we went from over 2 10year to 60 basis points. And let that sink in. And the direction of the Interest Rate is in a death spiral, and all going negative, and every Interest Rate is negative. No way out, right. If you have a lot of debt, you can pay it back, and no way to pay it back, and restructure it, and no ebb is going to take that, and default it, but then you are kicked eed out of offic deevaluate it. So you have made more money in the new ffang, and anglo, and newmonti, and those guys are up since march, and the nasdaq is up, and they are up twice as much. It is devaluation of the empire because it has too much debt. Thank you, mark. That is new faang is new to the market. Well, to quote a little Marshall Mathers and he makes a good point saying that the market is one thing, and the economy is another thing, and so we saw some decent data last week on the economy, and that kind of flowed through into this week, but who knows howthis thing goes without expanded unemployment benefits. When you are thinking about where we are as far as the market is concerned and the economy, we have the front end loaded fiscal and monetary stimulus, and it seems to be waning a little bit and that is the one reason i would say that the market can take a breather now that we are back to the prior highs of the s p 500 especially not to get the fiscal stimulus to the levels we had a couple of months ago. And mark, the chinese internet picks well, i think that ten cent and ali baba are my biggest positions. And if you are used to buying the garbage banks in that etf, the top leading percent is taiwan semi which we have talked about all of the time and another way to get the exposure with the yuan and the exposure and that trade has done well, and taiwan semi, and looking at that and what they will do for the qualcomm outsourcing, and so i think that with the intel news, it is going higher. We are in the gulf of mexico tracking not one but two major storms and how they could impact the energy markets. And litter, technical difficulties and what happened to zoom today which is a big stor bte fack to school. We have the details when fast money returns. Change the plan or stay the course . Thats why Northern Trust is here. With specialized expertise. A history of success through every economic climate. And proven strategies rooted in data and analytics. Giving you more control. Clarity. And confidence. For now and whatevers next Northern Trust wealth management. You say that customers make thelets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g, everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad. Your wireless. Your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch and save up to 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. We have a news alert. Asauna is filing for a report. And deidre has the latest. Hey, debo. Hey, melissa, this is the Company Founded by facebook cofounder just filing for an ipo on the new york stock exchange. Last valued 1. 5 billion in november of 2018, and notable early investors include familiar names in silicon valley, peter thiel, and mark zuckerman, and a bloomberg report citing the sources saying that asana has been trading for roughly 5 billion market cap on the secondary market. Melissa, i am dealing through the s1 and the Company Nearly doubled the revenue in 2019 from the year before, but the net losses nearly doubled to 21 million from 51 million in 2018, and melissa, this is the sixth Software Company to file an ipo today. The others are unity, sumo logic, and snowflake, and just as i was coming to air, i saw anwell moments ago. So it is an ipo software ipo palooza. Than yk you, deidre bosa. We are following two storms headed to the gulf of mexico. And we have chris polllonpollons in st. Charles. Yes, you can see that marco is here is kept with the precipitation in the Florida Panhandle and into alabama as a high wind shear is knocking this Tropical Storm down, but however, that is not what people here in lafayette, louisiana, they are worried about that. I are watching laura near cuba at this point expected to enter the gulf of mexico soon and could be striking here Late Wednesday into thursday and possibly as a category 2 or category 3 hurricane. That could be anywhere from this area all of the way over into texas, and perhaps in the houston or the Corpus Christi area, and we are continuing to watch the forecast. As you mentioned it earlier, this storm, these two storms are having an effect on the world production here in the united states. There are more than 600 drilling rigs and facilities out in the gulf, and more than 100 of them have been shutdown and evacuated as of yesterday. That had shut down 58 of the gulfs oil production, melissa. Thank you, chris pollone. And lets check it out, guy, with phillips, and exxonmobil and valero. And at one time we would have seen more of a reaction to the oil stocks. At one time, yes, but they have retrofitted so many of the businesses and the off shore rigs and stuff to the point where the storms are not that major in terms of what they can do to the places. With that said, you saw a big move in valero today. If you are looking at technically, valero has been level and supported at 54, but tim probably agrees with halliburton, because Goldman Sachs added it to the conviction buy list, and this stock has a slow steady climb over the last couple of weeks, and that a name that could continue to rally and not necessarily on this news, but in the environment that we are in. Tim, you are long halliburton . I am long schlumberger of the two that is the underperformer, but looking at coming out of the earning cycle, both of the guys cut dibs in the Balance Sheet and rationalize mode, and Free Cash Flow is part of the story. So it is a slow rerating, and as we are following the brent prices, too, jammed between 42 and 43 in the last few weeks and this is a spark to take you above what is a technical consolidation, but i agree with everybody here, supply disruption has not been the trade here, and certainly not a trade to buy in the energy space in a bear market. It was in katrina, because i was trading in 2005 and that put people out of business, but it is a different market and well flagged. Like the oil service guys with the best Balance Sheets in the u. S. For long term. Karen, value in the sector or just value traps i dont know. I mean, there is value, and there is Balance Sheet risks, and so i agree with tim, you go with the best, and the best Balance Sheets and my mind is going to jump to multiple storms of the home depot, and what destruction they are on, and what type of the rebuilding is going to get done. But it is interesting how the oil, itself, the commodity, it did not react to this at all, the refineries didnt. And we have breaking news here, additions to the Dow Jones Industrial average. Sales force. Com, and amgen and honeywell is set to join the Dow Jones Industrial averages, and salesforce is to replace exxonmobil, and amgen to replace pfizer, and honeywell is going to replace raytheon technologies, and this is a Major Overhaul of the dow, and so we have these three stocks entering the dow all at once, and revamping of the dow to reflect where the economy is better at this point in time. Dan, your thoughts on these moves . Yes, crm, and salesforce is interesting and you hear bk say that data is the new oil, and thinking about this company, and it is 187 billion Market Cap Company with 120 billion in sales, and they are Touching Every major industry, and every major geographic on the planet, and talk about the company that is truly industrial, and they deserve to be in there and to the last conversation, i mean, look at exxon talking about it in energy, and getting out its own way, and to make a two or three month low before the two storms came in, and like the addition of sales force. Yes, it is fascinating. You go back to look, and we have been talk about amgen, and the best of breed in biotech. And it had a double top and blue through it recently and in trader parlance we had a back and fill to that level, and now with this news, the stock is probably around 2. 40, and the risk reward is going to set up well for amgen. If you say that gee, you never had a chance in ge, well, g. E. And honeywell were Similar Companies and looking at the performance over 10year period. Honeywell did everything nice, and this is not to cast dispersions, but g. E. Didnt, and honeywell is being rewarded. And now, in the dow, the exposure is going to be reduced in favor of a Software Company, and biotech over big pharma, and honeywell over raytheon, and karen, i know that the dow is not the index that we typically follow, but america follows this index, and this is maybe saying a lot about what the economy is today. Right. I am surprised it does not have alternative energy, and the pfizer and the amgen switch, i get it, but to go from the exxon, and i would think exxon to maybe a tesla or electric beagle or Something Like that. I think that, yeah, the dow has had its day. I wanted to make one comment for guy, g. E. Tried to buy honeywell about 15 years agoed and they were denied which is unfortunate for g. E. Given the path the two companies have taken. What is also worth noting is that with the stock split of apple this evening, apple is going to have less of the impact on the dow in terms of the move than these three new additions, tim, so this is a change of how the index going to trade on a daily basis. Well, if you are thinking of it, where salesforce is going to supplement some of the lost mojo from apple, it is right. This is extraordinary and though we dont talk about the dow and focused on the s p 500, and rightly so, but as you point out, the dow is important for a lot of folks, and these changes, and exxon is an American Icon and getting kicked out of the dow is an extraordinary moment in history and also points out where the index does need to compete with the triple qs and the s p 500, and there is no surprise with the honeywell, but to ther mo the other moves are massive. Yes, and there are etfs that are indexed to the dow, and so this is interesting to watch, and the major revamp coming as apple is set to split the stock. We have a lot more coming up on fast money. Tiktok takes on trump. The social Media Company is suing the u. S. Government. The latest on the brewing battle straight ahead. And later, putting the pedal to the metal and we will tell you what sent shares of gm into overdrive today. Fast money is back right after this quick break. vo weve got your back, road warriors. Because we know you want to get back to going your speed. Steering life at 10 and 2. Youre prepared for this. And so are we. Soon youll get back to skipping the counter without missing a beat. Back to choosing any car in the aisle. Back to being the boss of you. Go national. Go like a pro. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. I see a new kitchen with a grill and ask, why not . I really need to start adding less to cart and more to savings. Sitting on this couch so long made me want to make some changes. Starting with this couch. Yeah, i need a house with a different view. And this is the bank that will help you do it all. Because at u. S. Bank, our people are dedicated to turning your new inspiration into your next pursuit. Welcome back to fast money. Tiktok is taking a stand firing back at President Trump with the ban to operate in the u. S. We go to Julia Boorstin with the latest. Today, they took to the blog to say they are suing the u. S. To ban the service in the u. S. Saying that it does not take suing the government lightly, but with the executive order to threaten to bringing the ban to the operations eliminating 10,000 american jobs and irreparably harming millions of americans who turn to this for entertainment, and livelihoods, that in light of the pandemic, we have no choice. They say that the Trump Administration has ignored any mitigation to address their concerns, and tiktok lacked a sense of due process. The Trump Administration no comment on the lawsuit. As for the reports that Mark Zuckerberg warned of the rising threat including tiktok which prompted the National Security review of tiktok, today, trump adviser Peter Navarro is saying that zuckerberg had no impact on the white house decision. Back to you. Thank you, julia. For more on the tiktok move, lets bring in our analyst jerry. So what is your interpretation of this news. One train of thought that tiktok is trying to buy some time to get the bids higher here, and that it ultimately is going to sell itself. For sure. From the tiktok perspective, no downside, because they are really backed into the corner here. If you are taking a step back to put things in the context, the Trump Administration issued two executive ordered in the time span of two weeks, first august 6th, and then 14th, and both of them going to dismantle the tiktok operation here in the united states. So Parent Company bike dance based in china was ordered by the u. S. Government to shutdown operations within a 90day window, and as per the second executive order, and so from tiktok, not much to lose, and to your point, it is going to buy some time, and obviously a bunch of bidders who have been circulated who could own the asset from microsoft, to oracle to twitter, and to prevent a fire sale, and buy some more time, there is no downside. Also, i would add that while im not an attorney, but when you are thinking of the ability or the willingness of a federal court to overturn something on the National Security, the odds are low. So no downside, but it is making sense from the Strategic Perspective. So, hey, jared, does this, obviously, microsoft would love to have tiktok, and others who would love to have it, but does this lawsuit now make it unlikely to have any sort of agreed upon deal between now and lets say midseptember or will they really get the time they need in trying to wait it out . Yeah, great question. I dont think that it impacts the sale process whatsoever. If you are thinking of the decisionmaking tree, no downside from the tiktok perspective to go ahead to go down this path, and at the same time it preserves the optionality to go ahead to get a better price on the other side when you are thinking of the bidders that have emerged. Microsoft indicated they would have a decision by september 15th. And as per the press reports microsoft seems they are in the lead now. And we talked about it before, that it is a lot of sense from the Strategic Perspective to have the ability to marry in tiktok of the gaming perspective with back end of the zorr and a number of synergys, but i dont think that this is going to jeopardize the process, but it is more of the very smart legal strategy with the limited downside. And so, drew, it is karen, and the highest bidder would end up being the winner, but this is such an unusual process, do you see the Trump Administration favoring oracle over maybe not microsoft, but maybe other bidders . It is certainly a bizarre process, and to your point, i have a lot of incoming questions when the oracle, and when oracle was announced as a potential bidder when there is no synergy with the base business, except that or ra acle suite is close o the Trump Administration. So, not only is there natural synergy, but thinking about the culture of the organization, it makes more sense of tiktok and microsoft perspective, but a with everything in the administration, there are a lot of question marks, and i think that with the oracle angle, it is interesting in light of the political alignment. And last quick question, jared, has the success of facebooks reels so far make tiktok more or less valuable it is a really good question. Facebook has had such so much success from the copycat perspective and one of the reasons why all of the regulators have been down on their backs, but it is speaking to the Market Opportunity more than anything else. Tiktok has been so successful in terms of implementing the algorithms and they know what their users want, and downloaded 180 million times in the u. S. Alone before the user wants it, so while you cannot dismiss faceback as a threat, the Value Proposition is real in terms of what tiktok offers. Jared, great to speak with you. Thank you. Thank you, again. Guy, you on the talk and also on reels. Yeah, it is amazing that i can be on both platforms at the same time and able to buy them both at the Application Store recently over the weekend when i had some time. What find the most of all of the most absurd things in the world the fact that now somehow the u. S. Government is acting as the Investment Bank to take the chops out of whatever deal is happening, it is fascinating. I say it in jest, but moving forward that is a dangerous present, and maybe not, and maybe they should get a 4 banking fee, and maybe i am off base, and i am the okay boomer that dan seems to think i am, but the government picking and choosing who is in a bidding deal is dangerous ramifications despite what Peter Navarro thinks. And coming up, Home Builders and will the sector keep up with the red hot name. And also, palo alto is up big after the earnings we will break it down. And more on the big changes of the three new names added to the Dow Jones Industrial ara. Vege we have more reaction when fast money returns. Welcome back to fast money and earnings on palo alto, and josh lipton has the latest. Hey, josh. So, melissa, i checked in with Andrew Nowinski and he would say this is a fantastic quarter, and the beat on the billings, and one of the biggest beats for the company. And product and subscription segments exceeding expectations, and he se noting the upside in the q 4 billings and that clocked in at 1. 4 billion didnt flow through into this october guidance, and that is going to explain andy saying that some of the disappointment in the afternoon hours. And to catch aurora on the after hours call, they said they have adapted and posted Great Results and noted that some companies are more cash conscious, and the macro environment is still uncertain. And speaking of the trends in 2021, the work from home will challenge his hardwarend it is h quarter ahead, but that should be supplemented with more software solutions. And that was also with the q4 certainty, they said uncertainty, and they needed to be prudent. They talked about the 265 million acquisition of the cryptus group. And for more on the print, tune into mad money because jim cramer is going to be sitting down with nick to talk about this more. Where do you with palo alto it is a great quarter and they guided high foreor the First Quarter and the only thing not to like about it is the valuation, and think did not beat by enough. Historically, this is a name that seems to sell off every time they report. 248 is the high in february and faded from, and that is where you buy it, and ill say that it is amazing in our San Francisco bureau, you have debow knows which dan nathan coined but it is a great nickname, and the josh lipton who is smarter and better looking every single time he is on the television. It is remarkable. I feel sort of uncomfortable with all of the compliments coming out of you, guy. But anyway, we have a great bureau, and kate rogers is out there, now, fyi. There you go. And coming up, big changes coming to the benchmark index. We will bring you the details. Home builders hitting another high, but is this built on a Sturdy Foundation . We will weigh in with the trader when fast money returns. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Welcome back to fast money. The housing trade has been red hot, and the housing builder has been hitting a new high, and double from the march low. So it is time to close the door on the winning trade tim, what do you say no, it is not. Look, rates are at zero and moving into houses wherever they can, and building out. If you are looking at the hxb, it is not just builders, but it is train and carrier for example in terms of the hvac and masco, and whirlpool is the biggest weighted stock there, and these are trends that are not going away. And if you have replaced a hvac and other appliances since covid happened, they have you where they wantt it. The rates are zero, and borrowing against the houses, and buying new houses, and as long as the rates where they are, then tit will stay where i is. One of your dogs doesnt like it, guy. No, they do. And then, karen, the retailer side or the buyer side or seller side well, home depot and lowes, and i like the builders, too, because they came in without a big oversupply, and giant shift in demand, and finally the millennials who said they did not want a home to rush out there to buy a home, and we have not worked through all of that. I agree with tim, the i the i t i agree with tim, the i im, i d that you abandon the trade, and the rates here. The only part that is not setting up perfectly well is potential unemployment which is obviously peaking a ton, but for the white collar workers or for those who have jobs, we will continue to see great Home Building numbers. One of the builders reports earnings after the close, and some are saying that it could break out to highest levels of the year, and mike khouw has the action. Yes, talking about Toll Brothers who is going to be reporting earnings at more than four times the average daily call volume, and right now, it is implying 7. 8 , and at the end of the week that is more than 6. 1 it has averaged over the last eight quarters and the september calls about 40 of those traded for a quarter of the calls who are betting the earnings news, and following that everything in the september news expiration, and the stocks will be higher in the next four weeks or so. Thank you, mikement for more on that action, tune into the full show. If you are just joining us, we have big breaking news on the Dow Jones Industrial average and it is getting a makeover, and salesforce, and honeywell and amgen looking to be added to the dow jones and exxonmobil and the other two out. Well, they have taken the dow down to 23, and that is a significant decline. So using that as an additional item in making adjustments and by adding the sales force, you come back to 23. 1 of the dow being in technologies. The other changes also reflected more what the market is doing. Especially the United Technologies when they did the spinoff between raytheon, and the adding of honeywell is more in this field and of course, amgen as compared to pfizer which is more current at this point in time. How much money, if you know this, howard, how much money is indexed to the Dow Jones Industrial average, and the abs and 500 is the big one, but there are etfs that are indexed to dow. I do not have the current one, but this is going to cause an amount of change that they will have to do. They will be selling, and some of the adds and the deletes and the apple. So it is going to be a little bit of a crush on them, and a drag on the performance because of that. What is remarkable though, howard, if you are thinking of thou dow is going to change once the inclusions are made, apple, the Biggest Company in the world is now a much lesser impact on the dow than even a salesforce. Yes. Apple will have the performance based on a nice 2. 99 , and just under 3 , and they are right now before this split, 12. 2. But salesforce will have almost 5, and amgen 5. 6, and honey well with 3. 8, and all of the additions will have more of a weight than apple will. So to some degree, the reweig reweighting of apple is because of the split, and you have locked in 3 4 of the shares, but reallocated to the next. So it is a different index on this going forward. You have been in the space for quite some time, howard and i remember calling you up when i was a cub reporter in terms of the amount of changes that will happen today and over the next 24 hours or so or however long it takes to have the inclusions, and is this an unusual thing it is extremely unusual. Yeah. The amount of changes, and we have had three or four Software Changes in the dow, but this is a massive amount especially adding in the apples which is going to reweight it significantly and expect to see a lot of action on it, and buying and selling and definitely well have a lot of performers out there showing the new and old makeup of that. Again, Technology Still is going down from 27. 6 to 23. 1. That is a significant change in the health care also picking frup from 14. 2 to 18. 6, so there is variance in there compared to what the prior dow makeup was. Howard, great to speak with you and get your analysis of this breaking news. Appreciate it. Howard silverblatt of s p 500, and it is significant to look at the overaull weighting of the dow, tim. Yes, scrambling to be more representative of where the market is. And it is look, we have at times are critical of the priceweighted index for moments like this. And or should salesforce be be a bigger force, who knows, but you have to be representative, and we talked about how the european indices, and how the dax is going to underperform, because they will, because they have no mega technology, or cap space, so the dow is very aware of this, and there are dynamics at work, and i think that exxon out of the dow is a historic day, and it is really going to tell you and punctuates how it happens in the energy sector, but exxon is one of the great proud members of this index, and clearly this is a sad day. It is amazing to think, guy, that exxon goes out. It is like when g. E. Went out, and there are certain iconic u. S. Companies that go out, and you are like, wow. Yeah. No, and listen, we have talked about the existential risk to exxon, and think of the head win winds they were facing and then esg with the whirlwind and that is not going away, and now a huge existential use, and it is compelling to own exxonmobil the stock, but i dont know writ going to trade tomorrow, but the lows back in march are within the crosshairs for sure, and probably unfortunately rightly so. Dan, salesforce reports tomorrow, and this is interesting news for salesforce ahead of the earnings. It does not help at the stocks trading at new alltime highs, and listen, people have to buy them for index purposes, but just like palo alto had a good quarter, the stock could sell off, and consolidate some of the recent gains. And moves across the board for the new dow components. So time for the final trade. And lets go around the horn with karen finerman. I like home depot. Im bull ib on t bullish on t housing. Tim seymour alibaba, stay there and stay long. And you are so succinct, and you can expound on the thoughts, dan well, i can talk forever. Good to have you back, mel. Thank you. Dan, a trade . This tiktok thing is very interesting here, and for years people thought that nobody could buy twit oreter or snap chat ort type of thing, and if somebody can buy tiktok, i think that somebody can buy twitter or snap chat which is a better flat f m forform form platform. And are your dogs happen which that well, i know that you have googled mike trout, because you have no idea. But i think that amgen is going to hold that level of support, and that is what my mission is simple to make you money. Im 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, im cramer. Welcome to mad money. Welcome to cramerica other people want to make friends, im trying to make you money. My job is to train, educate and teach you. Call me or tweet me jimcramer id say we need to talk about the elephant in the room but its more like a circus of elephants, two biggest being tesla an