Development on a tiktok takeover Julia Boorstin has the latest. Sources confirming to me that bytedance is continuing to explore options with the committee on Foreign Investment in the u. S. About a restructuring of the company that would avoid a full sale of those u. S. Operations. Now, my sources tell me that long before President Trump set a deadline for tiktok to agree to sale of its u. S. Operations or have the threat of being shut down, bytedance was negotiating about various options. One option being discussed is a restrucking in which bytedance would maintain ownership stake but wouldnt have any control over u. S. Operations one u. S. Company could take a Minority Stake and be an operating partner, say, have microsoft or oracle be tiktoks cloud operator and manage the u. S. Data in a way that u. S. Regulators could feel comfortable with everything im hearing is still very much fluid and my sources say it is unclear what the president will approve certainly an area to watch sounds like a lot of options still on the table. A walmart r microsoft in the lead but it went from session highs to session lows immediately on this news we were talking for a long time about a rerating of walmart because of this. Guy, what do you make of these developments in the tiktok story . To me its bigger than walmart and microsoft. Id take this and look at sort of Bigger Picture stuff. I think it continues to speak to the u. S. china relations that continue to deteriorate. I think the market is starting to take seriously and maybe it will start to take more seriously as we move forward i dont think things are going to get better as the election gets closer. I think things are going to get worse and i think its going to escalate i do think the vix at 30 makes sense for a number of reasons. This is much Bigger Picture stuff and i think it speaks to the precarious nature this market seems to be on right now. Karen im thinking more granularly of microsoft and walmart i thought this is too bad for walmart because i really did like the idea of it for them i think it makes sense, but i think even before we had heard anything about their potential participation in the tiktok deal, i think walmart has a lot of momentum and i think walmart stock will gain traction i like what theyre doing. The stock isnt crazy expensive. And i think them being on offense, which they are, post pandemic where they got a lot of new customers and theyre doing what they can to get them to stay, i like walmart i wish they were a part of this deal im guessing thats lower likelihood, but i like it even without that the stock was 7 or 8 points higher from then when they announced it. Tiktok or not, the rerating is still on, tim so that was an interesting conversation we had. I, like karen, think you do not cross walmart off the rerating list just for this this was a continuation of that and we were talking about how some of that audience could be good for their advertising and help their walmart plus. But walmart plus is about sameday delivery, about competing. When you look at their Digital Sales and the growth not just because of covid but because theyre taking market share and obviously amazon is way, way ahead. The stock went from about 130 to 145 roughly on the tiktok news but i do think this was a reminder of all that they have done, whether its flip cart in india, whether the original acquisition of jet in 2016 that we thought was a little strange. But the acquisition and the acquiring of intellectual property and technology is something walmart will continue to do. Whos going to compete with amazon, especially with their ability to have those Fulfillment Centers effectively in the form of all those big warehouses around the country . I like walmart here. Even with this news, i still want to own it. The idea that walmart wanted to be part of a microsoft bid for tiktok maybe underscores that the retail giant is sort of rethinking how it approaches ecommerce its not just transactional. Its actually thinking about building some sort of ecosystem where you stay on walmart. Com or a property related to walmart and you are part of that community. Yeah. I get every reason why walmart wanted to be with tiktok and part of that with microsoft. But i would think that the rerating is put on hold. Youre not going to get any multiple expansion, i dont think, if this deal is off the table. Thats number one. Number two, in the last couple of days where weve seen the market have a little bit of weakness, its been value versus growth if thats going to continue, then walmart is not going to get that growth vig anymore. I think you should sell walmart, sell microsoft and take a look once the smoke clears on this deal, if it does. Guy, circling back to china and china u. S. Relations, there were doubts about the deal when china issued new restrictions on the export of technology and specifically for this deal, that would mean that the algorithm couldnt just simply go to the new buyer, that there would be some sort of arrangement where the algorithm might be given for a year and taken back or licensed, et cetera. So beijing didnt want to take this lying down, so to speak does this signal to you that china is in this for the fight of course they are. Ive never thought they werent. I think tim has spoken to that i know dan has mentioned that as well theres no question theyre in it for the fight and theyre going to continue to push back its interesting i think for the Broader Market it absolutely has implications id push back to steve although i understand exactly what hes saying i think what walmart has proven is theyre willing to go down a road historically they werent willing to go down that augers well, whether its dealing with tiktok in a joint venture with microsoft or partnering with somebody else. I think walmart has shown their hand to be sort of forward thinking in an era where thats being rewarded i happen to think regardless of whether or not the tiktok deal gets done, youre going to get that rerating. To answer your original question, the chinese u. S. Rhetoric is going to get ramped up its going to get worse before it gets better and thats going to go on up until election day, in my opinion. I think the market cares i think thats what youve seen, again today notwithstanding, over the last week or so. Tim, does it get worse . Beijing is going to layout its rules so the u. S. Is willing to say were going to figure something out now. Are those rules that theyre going to be comfortable with again, its, to me, going to imply that anything that they buy still could have some ties back to china and therefore may not be a sale or an acquisition actually that would make a lot of sense no i think this is the next phase why would china stand by and let a Chinese Company be bullied over here, especially at a time when this has all been about control of technology and data and essentially the 21st search Internet Technology trade. This whole thing has been kind of bizarre in terms of the white house brokering a deal, taking effectively a banking fee. The parade of suitors coming up and all this with china remaining silent when, in fact, this is a Chinese Company, even though the company itself was saying we have no relationship with the Chinese Government. Whether you believe that or not, you cant expect china to sit back, especially with what has been going on with huawei over the last year. The dow adjusting nearly 10 points, the nasdaq gaining almost 3 , but the rally lost steam at the end of the day. Given todays market action, show of hands, panel, do you believe todays bounce oh, the crickets oh, karen does tims halfway up karen, why do you believe the bounce well, i mean, im not saying the market is going to go up tomorrow i dont really know, but i think that all of the conditions that were precedent there to have this market rally, meaning the fed being there, the hope of a vaccine. I think that news today of astrazeneca was a little bit better than we had feared. Reopening and mortality going down, all these things helping the market are still there yeah, when we went up parabolically like we did, its not surprising were going to come down hard i dont know that tesla is going back to 500 any time soon but theres a lot of other names to like im long im always long but im more comfortable being long after a selloff like this. Tim, your hand was half up. Why only half . So turn around tuesday on wednesday because of the holiday makes sense. Everything one would have said yesterday, they should be saying the same thing today thats just fast money, those are rules. Nothing really has changed day over day ill say the same thing i said yesterday. What happened in the market is a function of where we came from this is what karen has highlighted. To me, its a mini version of where we were back really in covid times in the advent. I think the fed is still on your side i do believe the buy the dip mentality is still in place until proven otherwise i think there are a handful of charts that still need to test lower. But the buy the dip mentality for the market is not over steve, why dont you buy the bounce you have to keep this thing equal. In my mind, when you look at a relative strength index and you look at overbought, we were in overbought status for the market and all those tech names overbought status is above 70. We were at 85 to 88 in some of these names, some higher than that when we sold off yesterday, we got down to low to mid 40s oversold is below 30 i need to have an equal move if im going to be overbought, i need to be oversold to the same magnitude. Were not there yet. Theres a lot more room left to fall. Guy i look at it broader in the sense that we can talk about how great in economy is. There are not a lot of great things happening right now i know were excited about a vaccine. Again, im not a doctor, im not in that world, but its not coming any time soon, not the rest of this year. As we get into the fall, i mean, i think were going to start to feel it in terms of the economy. Im hard pressed to believe its that simple to flip a switch and everything is going to go back to normal. The market clearly got higher than i thought it would go, but i dont think by any stretch the selloff has been enough to assuage my concern. Seasonally, september and october are not good months for the market and weve got the election and we still have the pandemic along with flu season. Does that give you any pause in that hand being raised up so high no. I mean, ive never traded around, you know, buy sell in may and any of that. The election is important, but i still think the fed and the hope of a reopened trade and a vaccine are more important so im staying long. Well start to see earnings pretty soon. Thats true, for third quarter. Maybe well get some guidance going into next year rob, what are you looking at . Theres a lot going on, obviously. I think the key point is what weve seen with the nasdaq or the qs is almost a textbook pullback, three sharp days down that came on tuesday then we get this rebound rsi is in that 4050 range naps a pretty typical range to see a bull market bounce from. I think we do get a bounce here. The question is, how much further does it go do we get a lot more upside or is this an oversold near term trading bounce, which is what my view is. September is going to be choppy. I think we still do a zig zag through the month. As we get through september, were probably going to see some sort of seasonal low development as we get to q4 the tech stocks linical traderst have to play the trade on the long side. When you step paback and look at the weekly charts, step away from those daily charts and see what the weekly looks like that rsi on the bottom panel on the righthand side, to me, looks like it needs to do more work im not a tech hater im not a tesla or apple hater i just think these stocks need to pause and consolidate and catch up with their longer term moving averages. What does an investor do with that well, if you look at some of the tech names like the video game stocks, a lot of the work from home names, a lot of those names started to peak out in august. You can see that the relative performance in the bottom panel is below the 50Day Moving Average. Theres quite a few stocks doing that applied materials, klac are good examples there are a lot of other stocks. I think the market is broadening out from that secular growth, you know, work from home to return to work and an improvement in the economy some of the cyclicals are improving. Weve been fans of cyclicals in general, adding that to your barbell. Names like uber for example look a lot like the airlines and the cruise lines these are the stocks that havent done anything since june 8th. I want to take money out of the growth names on the bounce and add it to some of these cyclical names. I think the longer term market cycle is still bullish for stocks into 2021. This sounds like a post pandemic portfolio it might be uber and cruise lines and all these cyclicals. Here we are. Thats what rob says to buy. Its interesting. I hear what robs saying i tend to buy this pullback in Electronic Arts for a number of different reasons, not least of which weve seen moves like this before i do think these stocks are reasonable i dont want to be all dour here, but i dont know when post pandemic is. Nobody does, quite frankly if they tell you that, theyre lying, from politicians on down. So id just as soon stay with things that have been working. That includes Electronic Arts and take two. Steve, youve been positioned for post pandemic, whatever that looks like, for a while. Yeah. You have to ask yours where elf is the next 3050 going to come from its not going to be technical its going to be the chemical names, the industrial names, the material names you could play the most pandemic for me, it doesnt even matter if you recover as quick as you thought you were going to recover or not its wheres the best value for your money right now and it happens to be in value so going to the value investor, karen, youre in a lot of the tech names, apple, microsoft, et cetera, which robs says could be in a grind for some time. How do you justify the valuation of these names after such a run . Well, i do have traditional value as well. I have both. I like these i do think theyre a little rich for sure i mean, i just have no place in my ability to sell and know when to get back in and talked about paying taxes and having that still, could i get out of the right time, in at the right time and make enough on the spread to pay taxes, or do you believe enough in the company in the longterm im hanging on for the longterm. But i do have those value kind the one that has proved to be the most value, meaning it sucked, it hasnt worked, is the financials those are among the cheapest and i clearly have exposure there. I think if we do one day get to the other side, we will see those. Tim i cant believe karen just cursed on national tv. Its not a curse. Were not going to get a fine. Theres no bleep its fine. All right first of all, to try to put my tech hat on, i kind of agree with a lot that robs saying what i said yesterday was, go back to the end of june, collect 200 and pass go, or whatever that expression is, and start again with a lot of these starts if you look at the qs, thats somewhere around 245, which im not saying we have to go to tomorrow but that is the pullback i think the housing trade which has a lot of industrial to it, some of that materials and components, i think is alive and well copper above 3 through all of this is a very good sign for materials names. Were following t inin inin hours action of rh the companys Conference Call is now underway well bring you the highlights when fast money returns. Come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. If i could, baby id w how can i, when youg a wawont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Welcome back to fast money. Diamonds are a girls best friend, but its more like faux when it comes to lvmh and tiffany. Robert there is a reason lvmh saying a letter from the french government prevents them from moving forward on its pricey deal to acquire tiffany the french government asked the company to delay the deal until january. Since that is after the original contract deadline, lvmh says it is not able to complete the transaction. Oh well. Tiffany responding with an immediate lawsuit in delaware saying lvmh has unclean hands. What happens to tiffany . The pandemic has absolutely crushed the jewelry business, which is why lvmh wanted to renegotiate this deal for months tiffany sales were down 45 in the Second Quarter lvmh saying in a Conference Call it is not happy with the way tiffany has been managed in the past few months. Tiffany saying the fundamental strength of our business is clear and that Fourth Quarter earnings will actually be up over 2019. Now, Industry Experts say the end run here could be that lvmh comes back to the table at a lower price or maybe that Delaware Court could rule in favor of tiffany, in which case they would have to acquire this company at the 135 per share let me get this straight. The French Foreign minister sent a letter, which nobody has seen, is that correct, saying you shouldnt do this deal until january . Yeah. So as you can imagine, lots of intrigue and Conspiracy Theory on how this letter came to be. This is a letter that lvmh has seen but has not given the french letter or a full translation to tiffany tiffanys lawyers are asking for that clearly if and when this goes to court, this will be exhibit a. But lots of questions from reporters today on whether lvmh had a hand in generating this letter, what the letter actually says or if it requires them to stop the deal or postpone it hence, maybe unclean hands. Robert, thank you. Karen, you think this letter would be easy to find, easy to hand over, at least to tiffany yeah, you would think actually by the merger agreement, lvmh must hand it over and they havent. This is clearly a case of buyers remorse. Lets go back to the merger agreement. Thats where tiffany has all the power in this. You might remember frank aquilla, he was the lawyer they had a very tight merger agreement, meaning theres not a lot