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tv   Fast Money  CNBC  September 24, 2009 5:00pm-6:00pm EDT

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smartphonemakers, react in sort sympathy to what rim is reporting. you've got wonder if rim started to lose some market share because of those exceptionally strong numbers we've got from palm last week and you also wonder if people are switching from the blackberry and going over to iphone. and whether this might actually be veiled good news for thecon competitors in the marketplace and not bad nurtz marketplace overall. >> hey, jimmy, it's joe. in the third quarter revenue guidance going forward inlution some of that revenue, is it all about the story that rim is chasing the other smartphonemakers and the production costs to do sort of, roll out new products. that's where they're actually losing some revenue here. >> you wonder about that, but you also see that the company is able to maintain those margins and you think that rim is actually doing just fine on production cost, marketing costs and the like. because the gross margein on this current quarter was a little better than expected and i think that that took a lot of people by surprise. that's good news, but when you look at overall market, let's not forget that the smartphone market, we talk about an awful lot, but it is just beginning
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and can easily support multiple success stories. we've said it before and just because rim has seen weakness like this it doesn't mean that rim is out of the running. it just means that maybe these other companies are now beginning to gain some market share points. >> okay, the conference call is getting under way right now. so, jim, thanks for that. we'll check in with you a little bit later on. again, research in motion sliding in the after-hours session. disappointments on many fronts in terms of its earning picture. apple, palm, also failing but take a look at the qs and see how the nasdaq, overall trade is being impacted on this after-hours session. i would bet a bit soft. look at qs. >> you go back to june 11th the stock made a high of 86. said bad things. sold off. people jumped in too quick. remember we talked about it. we said, listen, this will overshoot to the downside, it did. traded down to 65 by july 11th. the other day, yesterday, i believe, it made a high of 88. closed around 86. guess what, folks, i think history will repeat itself here. now you will talk to -- hear people talking about double
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tops. people will start to buy in this dip and they'll be too early. i think that you could easily see rim trade with another 60 handle, especially if the tape's about to sell-off like i think it will. >> not as a surprise here, debbie, downer. take this thing down another ten points but yi think that this stock was set up to fail based upon the price action. in other words, this thing had had to be and it had to beat nicely and despite the fact that the margetains we talked about yesterday and the analysts even said here, thought that was the biggest part of this story. they seem to be fine there but it was a revenue miss and it was stock set up to fail. and look out, nasdaq. i think there's a lot more to kind of follow here even if i don't take as bearish of a call as guy might. i do think this is terrible trading. >> in fact let's pull a chart about how rim reacts in the wake of its earnings because historically on on the next day when it does post a miss it is down boo, on average, 7.6%. one week later, it is still down 5.7%. in this context of today, though, rim has been almost a double in terms of stock performance in the past six months.
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so certainly way to the upside prior to this earnings release, should a disappointment again, and we could see a sharp sell-off in tomorrow's session. we are seeing that and also if we could while continue discussing this pull up charts for celestica and jebbel. those are the guys who split foorts research in motion. they could also see a hit. they were also highly recommended by our analysts yesterday on the show as being sort of play, derivittive plays. >> and rim the dramatic decline right now the after-hours, if there is a spillover affect, if the high-beta names tomorrow across the board, if they come in and there is significant selling pressure and those names based on what you're see ago. >> which ones are you watching? >> you could look at names. the names like goldman sachs. the names like apple. >> so outside of technology even -- >> across the board. >> into the broader market it is. >> spillover affect and to guy's point, in the s&ps you wonder to
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take it down to the 1010, 1015 level. >> you're a prior hedge fund manager. high-bate stocks -- well, you're not into too many of the high beta. but does it make you think twice about this market? >> i try to have a little bit longer perspective and i wonder, what's topped nasdaq in this last year, in the last couple of months? it's an extraordinary move to the upside and so to give back a little bit, 5%, 10% wouldn't that be a big deal. the nasdaq over the year is up 3 33%. that's an extraordinary move. i would think that everything will sell-off tomorrow. i don't think that people will make the leap that other losing share to apple. i think it's the pie, everybody in the pie moves up and down together. >> right. >> it would make sense to me that all of those guys are down tomorrow and that's okay they only suffer from the bar being too high like timmy said. >> exactly. exactly. look at hewlett-packard, after-hours again, the other story developing after-hours. essentially reaffirming its guidance. 420 to 430 is the guidance that they're coming out.
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press release today. 425 is the estimate. 117$117, $117, $11 billion on t revenue side. >> still becomes a valuation play and i will say it again, 11 times forward earnings or basically telling you what you are going to make i think that the hewlett-packard is very reasonable and cheaply priced. so hpq is the name i think that you can own. now, if i say the market's going down, will hewlett-packard go down? no doubt about it. it will go down, i don't think it will go down as fast. i think that hpq is a name slow and steady moves up and a name that you can seen in the stock is down a bit and i think on a different tape, the stock what they told us today. >> a reaffirmation. >> reaffirmation. but naz crack as some like to call it is having a huge move and coming back to earth. a the love guys suddenly remembered it's still the calendar month of september. still a fair amount of news that people, suddenly the doom and gloom that people were expecting is still out there. i think if you look at the numbers on the housing side, again to kind of bring it all around in the market today, those numbers actually weren't
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terrible. >> right. >> they indicated, at least on a lot of levels that we've seen, this continued to move off of the bottom, but people's reaction was such and it was all -- it was very much a day where you can tell the s&ps want to head down to 1025. break that and thenim worried. >> timmy did it but let's officially move to the markets in general. guy, you're talking on the phone calls that we have normally during the day. >> you and i, yeah we chat there. >> we chit chat. we change some e-mails, some high coos, you're saying today we might look at that and it might be the watershed day. >> i wasn't here yesterday 'i know that you guys talk about it but everything reversed yesterday. reversed on the fed day and news day and that's not good and no carryover, no positive bounce today. the markets sold off pretty much immediately. stayed down. not a good day like yesterday. people will poo poo it. and buying dips is the thing to do and without question it's been the right thing do. i think that you will look back six weeks today and say
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yesterday is the market showed its hand and i think that the s&ps will be trading significantly lower. >> clearly a lot different tape than we had 29 hours ago in the marketplace and right now the premise that's being challenged by the market is risky assets, which had been supported by the fed all along this year. okay, we're going to take the training bheels off. and now you have to ride the bike on your own. the question becomes and the market's clearly challenging that, can we -- the economy, go on its own without the help of the federal reserve? if you look at market, i think this correction's a healthy thing. i do think by the end of the year we revisit the highs and we get above the highs from yesterday at some point. but correction right now, and clearly the market is on the defensive. >> right. in terms of the existing home sales, karen, and the jobless claims, yesterday you said you were watching the jobless claims very close only. that became a secondary story as the existing home sales came out. how do you parse this out. >> i don't know why it became a secondary story, actually. to me that's relative data. i think that we want to continue to see improvement. we did. that's a good thing. i agree with joey. and i think by the end of the
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year we'll be higher why we are now. >> and also talk on the after-hours story that we're following and that is mcdonald's. dow component raising its dividend by about 10%. that's certainly, i would imagine, would be perceived in the market as good news. if it's now, just overwhelmed by the fact of technology. >> timmy and i had a conversation about mcdonald's a couple of weeks ago when they reported their comps. i reported that middle east and africa was disappointed and he made the point that they're economicach of extremely good comps last year. great point. my point is if you're seeing a slowdown in that region it's going to be very hard for mcdonald's to maintain current stock price. i love what jim skin ers doing. done a great job but if you see continued negative comps in that area in the next time they report i would be a little concerned. >> but when raising their dividend 10%, yeah, you're suddenly earning about 40, 50 bapsz points and dividend income come from mcdonald's that's consistent growth. you could argue this is the first positive sfrien corporate america because dividends have not been getting paid. let alone -- >> have been getting cut.
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and so maybe, perhaps, this will open the door to other dividend increases or reinstatements of dividends because companies have taken them back recently. talk about something that really moved sharply today, an oil slaughter day today. falling another 4% to under 65 bucks a barrel. joe, on the halftime report today, we were talking adams armstrong. he said today really feels different today and yesterday. >> i think that the last few days oil has felt a lot different. oim has been underperforming relative to performance of the rest of the market as we move higher. i think we've got a chart that will show. there we go. we actually have cracked the 100-day moving average in oil. something we have not done since q1 earlier this year. now, i am not throwing out there, go short oil. i know that some people think that's the trade. it's probably the right trade right now. but in the face of what's coming in october, which is the conversation we're going to have with the iranian, and i did watch a couple of those u.n. speeches and i don't think that we're going to put arms around each other and hug and resolve that issue.
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you have ahead of us in october a serious situation going on right now in iran so i think the trade in energy right now is, forget about oil, don't play it from the long/short side. forget that really the trade right now is naturalga, that's play. the best bank for your buck is oil. i think it is natural gas. it looks like that commodity has stabilized and you could own some of those natural gas equity names. >> natural gas up 10.6% in the last three sessions. karen, chesapeake continues to be on your radar? apache upgrade from morgan stanley and a real bright spot in today's session. >> yeah, i like natural gas. i think long term it's an interesting place to be. it's hard to parse how much has been noise about the u.n. "g" and whether they've had to liquidate and joe likes to point out can tango. >> if you're an investor, perhaps that's not way to go because you're paying for it.
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>> real quick if you look at the shape of the board in natural gas, the ung's not the play. is the cost of carry. the october contract right now trades about $3.90. the nov contract, the next contract, that's trading five bucks. so to stay in the game, you've got to pay that cost of carry. names like apache, names like eog, xto, those are plays in natural gas. >> which is why the product that jeffrey's just launched a couple of days ago becomes impelling for different investors. >> what's that. >> i think that art hogan is coming next week. >> oh mr. hogan. >> that's a tease. art hogan on set. take a look at that new jeffrey's production. it's very interesting. >> do you know if that product actually holds those contrasts? because that's the problem with the ung. >> i don't believe that they do. >> oh okay. >> which makes it interesting. >> that does make it interesting so we will listen to mr. hogan to come. let's continue on this commodity discussion, talk about materials and other commodities. slammed today alcoa and freeport-mcmoran. you're probably on the subway
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over here, but richard from freeport-mcmoran was on "the closing bell" with maria saying yes, the china story is intax and seeing the demand for copper right. >> you and yes, i do ride the subway too. >> oh, you in your -- >> inventories in copper in shanghai have increased. you look at freeport and the momentum behind that stock, that's not surprised it's sold off three bucks today, almost 4%. that stock is now resting on its 20-day moving average. an average that i think actually matters and if we break that, we probably go down to the 50 which is around 63. i think copper is not a trade that's dead. but i do think people are concerned about the china growth. i know we're going to talk about this a little later in the show. i don't think it's dead but i do think that copper is not the strategic metal they're buying. i think that they're buying other things here. if i look at the move in copper earn in the space, i will come back to the dollar. the dollar, the dixie stage, the 1.3% rebound off of its lows intraday, that's really what this is about. this is a risk trade that people are taking off of the table in
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the short term. i think if you break 73 -- excuse me, 77.50 on the dixie which -- on the dxyish think that the day may have put on a short-term bye higher here. i don't change my view on the long-term dollar. this is a dollar trade if following these resources. >> if the dollar can 10% in a week and a half you can easily see that. tonight for me is a fascinating night for me in terms of the price of gold. . all people talking about double tops. did it hold? i'm up gold sales. if i'm long gold now which i'll never be, i'd be terrified. >> two trades to watch sorry. two trades to watch. comback, on a pullback, you want to buy those names. both of those. alcoa, october 7th, earnings comes out. be careful with alcoa. when you talk about commodities you talk about oversupply, aluminum, that probably is the one commodity right now where
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the excess supply is so tremendous, that's a name you want to avoid. >> i'm very interesting like ian gold. it's such a crowded space. so much retail interest in it now and that 10,000 level i would think is psychologically very important so to see people break -- to see that it broke that $1,000 level -- >> are you worried about more downside because of the retail investor's going to flee this trade? >> absolutely. >> are. >> it's popular. >> yeah. >> and so the door's small getting out. >> absolutely. it's always harder to get out than get in. >> joe talks ball oil and talked to us on the way down here. look at move. everything these guys are saying. i'd be scared to death on gold here. gold has lagged this move down and will trade more violently when it starts to catch up. >> okay, let's move on. time now for street fight. talk more about china in fact for the past two months the shanghai compositezr has underperformed the u.s. markets. shanghai losing 15% as the s&p 500 gained 7%. could this mean that china is no longer leading the world wide economic recovery? our next guest steve cortez of
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vera cruz says yes, of course the ambassador will take the other side. el capitan, welcome to you. first -- >> thank you. >> -- this whole thesies is predicated on the belief, or the assumption, that the shanghai composite is a good measure of actual economic activity in china. >> well, not necessarily, melissa. i'm actually more focus the on the fxi. i'm focused on what we can actually trade rather than the shanghai composite which is really a huntir's game of almost a casino stock, if it were for the shanghai domestic market but xxi is just as important to watch here and everyone is fo s focused on the u.s. market which has had a very bad day and a half. well fxi's had a poor seven weeks. >> stop you for just a second. i thought that the fxi traced the shanghai composite. benchmarked it too. how is it different. >> that's part of it and also more hong kong focussed. >> okay. >> so a blend. >> it's the red chips as they call them. >> okay. go ahead, sorry to interrupt. >> steve all right, me jump in, because i think that part of
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your premise here is that the banking sector in china is not as healthy as people say it is and that would be very found -- sound foundation for having problems, but if i look at chinese banking sectoir see mpls around 1.8, 1.9%. expected to stay below 5% if the next three years. tremendous bank lending. i know that you will call that as something not sustainable. please tell me why it's bad. >> tim, that's if you believe those statistics about non-performing loans, do you? >> i do. and i tell you what it's not coming necessarily from the government oorktsz coming from the banks itselves, from banking analysts in parts of the world in asia they think that are pretty close to the story. >> i don't know. i would say regarding banks i frankly do not believe that the data's coming out of chin. at tractor of the chinese in terms of telling the truth about their banking system is not very good and also point out that whenever you lend this much money this quickly, upwards of near trillion dollars already this year, the idea that that's being done on a tight credit or on tight credit standard basis, to me, really just doesn't hold
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water. particularly when you're talking about a command economy. when you're talking about somebody that's being run from the top down and beijing. >> stephen, i'm sorry to interrupt. we're running out of time. i want to make sure that we get trades from you. you are basically have sort of a pair trade going on. sell ishares china which is the fxi and buy the siders along with that. now, steve, as i recall, if my memory serves me right, you've bon this program a couple of months back saying the short fxi or to get out of it. is that i trade that's worked in your favor since then since you first came on our program and recommended that. >> it's gone nowhere since there. basically in the same spot as in the beginning of august in terms of fxi but u.s. market is up well since then. yes, selling against a spread and a corellary trade is if i'm right about china continuing to underperform, the dollar's going to continue to recover. and i'm short british pound and eurocurrency against the dollar. >> just remember, folk, u.s. bank lending is that which is being cut bang and m2 in the u.s. is going down, china is going up. that tells me the stock market goes up in china and goes down
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here. >> steve, thanks a lot. steve cortes joining us from veracruz. don't go anywhere. including the video game ipo. you don't want to miss. the ceo of today's biggest s&p gainer. the latest on the rim wreck and plus this coming up. is google back on the prowl? with the ceo signaling the hunt is afoot, the street's top tech watcher lays out the likely prey. and it was a tech earning's winner this wreak. the man leading the lenox revolution. plus, is this one-time global financial supermarket about to become a mom and pop bank? charlie gasparino brings the heat on tonight's "street survivor."
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welcome back to "fast money." we're live at the nasdaq marketsite. i do want to take a check. and that is research in motion. close to its after-hours session low. it is down by just about 12% arch closing the session lower by couple percentage points. the revenue came in light. also the new subscriber's number was a little bit lighter than
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wall street had expected. 4.0 million was the estimate. gross margins were pretty much inline. we should note that the conference call's about 23 minutes in. jim goldman is on that call. we'll check in with him a little lit later and also we're seeing knock on affect from this report and shares of apple, palm, as well as some the componentmakers for the blackberry, like jabil systems and celestica. monitor throughout show. google ceo eric schmidt looking to acquire one small company per month. a stock hit. a 52-week high yesterday. where will google put its money to work? joining outs fast line is the top-ranked analyst, mark mahini from citi. mark, when you break this news down, where do you -- where would you like to see google acquire? in what area? >> caller: probably five areas where we would expect them to acquire. first is mobile. there's clearly an impact going on with smartphone devices, despite what you're hearing about rimm in the aftermarket. the smartphone market is as a
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whole, alive and well. secondly, there's video advertising on the internet with youtube turning the corn or profitability, it's a clear area, an important area for improvement, for investment. third is international expansion. there's still a couple of markets out there. call it russia, call it china, call it korea, where there are market share challenges for google. it would be nice to expand their region from those countries. fourth would be local or geo targeting capabilities. the ability to put researchers on space exactly with what zip code or streets you're walking on. and this company's done a lot with green technology. probably not quarter with its business but as they think about infrastructure and investments and use a lot of technology, what green technology investments could they put money into to improve their profitabilities. >> talking about china, we're talking about google. google versus the chinese government. can they survive there? >> and also, mark, google losing its head recently.
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how does that change the picture? >> caller: the one problem. i could reel off the international markets where are there opportunities and also markets where they would probably have the greatest regulatory pushback. i don't think the chinese government would allow them to buy a major chinese search engine. i don't think that the russian government would allow them. they've actually blocked them in the past. that's part of the challenge that google has. look, they've got $16 billion on their balance sheet. it's really burning a hole in their pocket. it's making less than a percent a year, in terms of returns. you would think that most acquisitions should be acreative under those conditions but the really interesting options for international expansion at least in those two markets will probably not be allowed. >> handsets if properly paid for palm, what would be your take? what would be your take for google buying palm? >> caller: i will stay clear of that one. i'd be very surprised to see them do something like that. look, this is a company that wants to stay in terms of staying in the middle of the infrastructure, fine. build the operating system, fine. build the browser.
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but they don't need to get into the handset selection game. that's a cut throat business. who know who is the winner there. i would be shocked to see google try to buy a palm. >> mark, one last question, what is the top, the most probable acquisition that google will make? the first one it will make in terms of publicly traded companies? >> caller: i think it's unlikely they'll do publicly traded companies. oh, okay. >> caller: look this company has bought 90 companies over the last five years. you and i have heard three of them out of the 90 that they've purchased. youtube, doubleclick and the investment in aol. every other one has been a small, private company. i think that's what you will continue to see them do. >> mark, pleasure to talk with you. mark mahaney with citi. several protests broke out in pittsburgh as the leaders arrived for the g-20 summit. president obama is there. rebouncing of the trade between u.s. and borrower and importer and china in that in exporter. by the way those are pictures that came in from pittsburgh a short while ago. any change in the status quo
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will impact the dollar and to your international trade? here aslook of what will and will not be accomplished is former commerce distribute or carlos gutierrez. mr. secretary, nice to have you with us. >> pleasure, melissa. thank you. pleasure, good to be here, thank you. >> what do you think will be the highest priority item on the agenda? >> i think the biggest thing is this imbalance that you were talking about. the europeans would like to see compensations especially the french and the germans and everybody's got an agenda and i think the financial regulation's stuff will probably be punted to some group of experts, but imbalance, i think, has the potential of really moving markets. the idea's been around for a long time. but if we're really serious about the china should save less and consume more, are less export-led, and we should save more and consume less and export more, that has a major implication. the execution of that policy is massive. and that will spell, most likely, a devaluation of the dollar and an unpreciation of
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the bet. >> how does that happen? how day group of 20 leaders go in there, a group of 19 in there case, and tell that one person who represents china that this needs to be done? chin's not a country who likes to be told what to do. >> and three, four administrations have tried to resflul that's exactly not have a it's an ongoing. >> i think and the chinese don't like this discussion because what they say this is big bigger than the rem & b. it's a lot bigger than that. and there could be an agreement conceptually and then it's the execution. they need some pension plans in place that people can feel free about not saving so much money. >> sorry. what do you think about some of the by-product, maybe of this protection and also the protection that is coming. chin is number one. whether it's sanctions on china dumping. it's a big movements for stock prices like tenarris and some of the russian tubemakers.
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is this going to continue? because unemployment brings protectionism around world. >> i think that's a great point and that's precisely where people will be ganging up on the u.s. is, you know, you want to be an export powerhouse. that's your policy. that's your strategy. what we see coming from you is, you know, tires, protectionism, unions want more protectionism. there isn't a partnership between government and unions to say, let's export more. we've got three trade agreements where the government it's congress doesn't even vote on them. one of them is with korea by the way, which would be very important from the standpoint of getting china's attention. so i don't think we have an export strategy and the execution starts there. so there are a lot of different policy actions that need to take place if we're serious about creating these imbalances. >> secretary gutierrez, how important exactly is china to the domestic economic recovery here in the u.s.? >> china, i can tell you that
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china is more and more becoming the place to look at. i just got from seoul last night. first time that i've noticed this is everyone is looking at china. they're not looking toward the u.s. because they're very happy with their businesses because china's providing the consumption. china's providing the growth. i mean for us, we're talking about imports, which give consumers better prices, exports to china have been growing 20% annually for the last five years. we export over $65 billion. and the capital investment that we've got there, its major profitability for a multinationals. so you know it's to our benefit that china remains strong. and it's to their benefit that we -- that we get out of this -- of this slump. >> mr. secretary, there's something that we all wonder, can we believe the data coming out of china? obviously it's an important part of the economic picture. >> personally, we never had reasons to suspect chinese numbers. we corralled about their deficit
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numbers because sometimes we would treat hong kong differently than they would but we knew why we there a difference. i have no evidence to suggest that they fudge their numbers. >> okay, mr. secretary, thank you so much for your time. >> thank you. >> we truly appreciate your visit in person here. >> good to be with you. >> tim, is there a trade? i mean we outlined some major issues, some major issues that could have an impact but we don't tip like have any sort of resolution. >> secretary's talked about balances and i think right now short term, it's currency. and balances and we've seen it in the currency and you think that the pound is going to continue to sell-off. i think this has been the risk currency and i think that you will see the canadian dollar sell-off. sell the xfb. you will see the dollar appreciate in the short run while this is in the air but will not last long. secretary the treasury, tim geithner saying that the strong dollar is in the interest the of the united states, if i had a dollar every time that was said, i would be a rich woman. who was the biggest gainer in the s&p 500 after it knocked the cover of earnings? we have the ceo of surging software firm red hat right
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after the break.
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welcome back. we're about 35 minutes into the research in motion conference call. jim goldman has been monitoring that call. jim, what is the latest? ia yeah, melissa, they just
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opened up to question and answers. the key bulletins in the call but not in the press release when those earnings came ought out. again, that's a little bit lower than the 9.5, the 9.8 million that wall street was anticipating. rimm also anticipating average selling prices, those asps of $320 in the third quarter. and the reason for the decline, according to jim basseli, the company's co-ceo there is because of the higher priced blackberries scheduled to come out are going to come out toward the end of the third quarter and that is going to affect the asps ahead of that, because again there's only going to be a few weeks of sales of those products available on the balance sheet for that quarter. gross margins will come down about 4 throw% over 44% for the company's second quarter. and the reason for that is opex, operating expenses will be increasing in the third quarter as rimm increases the amount of money it will spend on product
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marketing, because, again there, is a pretty stuffed product pipeline at the company. a lot of new blackberrys coming out during the course of that quarter. latin american, said sales are increasingly strong, gaining momentum, and there are several catalyst on the horizon that will accelerate that moment num that particular area. that was something that research in motion wanted to point out on the call. guys, back to you. >> thanks, jim, so much for that. and come back to us if there are any big developments there. again, the stock is down about 12% in the after-hours session. be sticking with technology, time for your earnings edge on the biggest winner on the s&p 500 today and that would be red hat. the software stock. soring to a new 52-week high today. up 12% after posting better than expected results and the company received not one, but three price target raises in the past two days. joining us right now is red hat ceo. welcome back to the program. >> thank you, happy to be here. >> what accounted for the biggest pocket of strength for you in the quarter? >> well, we see continuing growth across all of our major
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geographies, double-digit revenue growth, combined with about 170 bapsz points of margin expansion told over 20% growth in operating earnings. >> okay. >> in this market, there's not a lot of pure growth companies left. and we continue to generate cash and deliver growth while ahead of any of our competitors. >> speaking of cash, jim, you know that is sort of the contention point for a lot of investors out flup spent a lot of money investing in bonds essentially that yields about 2% or so. any plans for that cash? >> well, if you looked over the past year, we've actually repaid debt and we bought back a lot of shares. in fact our share account year or year is down 12%. if you look at our operating earnings on a year-over-year biesz a per share basis were up 38% year over year. so we actually are being very efficient in using our cash to reduce our share count because we do grow without spending a
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lot of cash. >> it is karen. what are you seeing in the u.s. specifically? what's your outlook on the economy there? could you get any visibility? >> i'm hearing more from our sales people that our customers are coming to us asking about new projects and that's the first time i've heard that in well over a year. so that's a positive sign. now it's just a few data points but i'm hopeful those are green shoots we're starting to see. again it's limited but starting to see customers talk about new investment, new infrastructure which is a good tloij hear. >> to quote van halen i think that you have grn hunter to hunted. organic growth is great but in acquisition, anything out there that's interesting for you guys? at a certain point, tuck in some these smaller companies. would that make sense for you. >> yeah, last year we did a couple of acquisition. more tuck-ins. we're looking at a few things. we are trying to be careful not do things that are particularly delutive but are there
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technologies out there that we're look at and continue to tuck i think in in. complementing our product lines rather than going into new categories. >> such as, and are they publicly traded companies. >> most of these would not be publicly traded. technology companies that sit around our core infrastructure business. we grow rapidly because we're still a modest share player in our core categories so a lot of room to grow in those core categories. we look for opportunities that add feature functionalities that our customers are looking for. so generally tech companies that are on the smaller side, gent rally venture-back type of plays. >> got it, jim. jim whitehurst the ceo of red hat, again the biggyest gain or the s&p 500 here today. any trade on the red sat in. >> absolutely, red hat is a phenomenal name. talked about it on the show before. if you believe in the migration to cloud computing this is a name that's strategically, they are positioned properly for that migration. got to own it. >> we talked about red hat forever but a huge, huge volume day today. big volume, 52-week highs. some the shorts got squeezed.
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if you chased it here i would think that's what you're doing, you're chasing it. name for the long term but i don't like it at these levels. >> and finally i would take a good look at van halen dive or down. >> right on. >> outlook. go get it. >> all right, coming up next. we go off the record with chad gasparino for the answers. ♪ i don't know much ♪ but i know i love you ♪ and that may be ♪ all i need ♪ to know (announcer) customers love ge aircraft engines almost as much as we love making them. innovation today for america's tomorrow.
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k today. welcome back to "fast
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money." we're live at the the nasdaq marketsite in times square. one of the world's largest bank of citigroup may be speeding up it's plans to the downside. the bank is reportedly slihrinkg itsz retail. to only six major metropolitan areas. it's the latest tough decision for this giant. the phrase "what doesn't kill you makes you stronger" might not apply to tonight's survivor. that's because citigroup, once a symbol of unfettered capitalism is now the face of a government bailout. victim of a credit crisis that claimed its ceo caused tens of billions of losses and knocked its share price to under a buck. it was put on life support by the government. and now uncle sam owns one-third of citi. an arraignment is keeping some potential buyers at bat. >> i think no doubt of the fact that when someone says they're going to share 8 billion of the
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stock,s that overhang placed on the market is going to force most of the buyers away. and so elusive. >> reporter: now ceo vikram pandit. he needs to make citi a leaner, meaner machine. ditch uncle sam and not only survive but thrive but does pandit have enough time to perform? >> to get that answer, let's go off the record with the man who keeps the picture of matt lauer in his office. >> who? >> our very own chad gasparino. >> oh, come on. >> by the wait author of a soon-to-be best-selling book. the sellout that hits shelves november 3rd. chad. >> that's almost angelic. >> yeah. >> i wrote such a nasty book about people and you make it sound like it's so angelic. >> let's keep some suspense in there. >> i'm going to wear my glasses because you put on yours. >> who looks better?
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that's our "fast money" poll of date. >> i'm sure that i will -- >> vex ram pandit how much time did he have. >> his position with citigroup and i'm talking to people that are at citigroup, people that are pretty close to the board, people on the outside, regularly converse with board members have stabilized. i don't think this guy's going anywhere, anytime soon unless he wants to go. i whole thing with sheila baird, the head of the s.e.c., i think that he could -- he's done, at best, a mediocre job. he should have sort of broke and that place up when he got in there in early 2008. he didn't and waited and then the place kind of fell into complete disarray. but however, the place is stabilized and i think that the government right now -- and this is essentially a government-run institution. the government thinks that you know, who else are they going to get? as long as it's stabilized, you know you might as well keep him in there. so i i think in the short term, and i guess the feeling that i'm getting is this year, excuse me, this year, vikram pandit is pretty safe. the long term, all bets are off
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and i will tell you why, it's the same sort of -- the same sort of issue that's facing ken lewis over at bank of mesamerice think he's more on tenuous ground, it's economy. if you believe that the economy is coming back, then i think the banking system stabilized. but if you think we're going to have 9 1/2, 8.5% unemployment, if we have a jobless recovery, then here's what you have, and i was talking with some people about this the, day, people who know what is going on in the banking system, you're going to have mortgages blowing up. remember argument these banks are tight to the consumer with their loans. those things start blowing up you could theoretically does not get better in the more of a modest way you could have another banking crisis. >> we're out of time. we spent too much time pimping your book so leave it there. talk to you next time, chaz. all right, charlie gasparino. i don't think that he was happy about that. >> your books, come on. >> we totally talked up his book so he should be happy about that. when it comes to citigroup -- >>, what he brings up actually a good point.
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i mean, pandit's fate is directly tied to the valuation of those assets on his balance sheet and the valuation of those of what used to be called toxiciassets, level three assets, have obviously strengthened. if they've strengthened pandit's going to be okay. if the market rolls back over and the valuation depreciates i think then pandit's going to be in trouble. >> okay. >> banks scare me here. i'm just telling you. wells fargo has trouble, 29 1/2 a bunch of times. it's a little spooky getting towards halloween, girlfriend. you know what happens there. >> boo! >> that was pretty scary, actually. all right, more "fast money." up next, one ipo, two retailers and a 19-pound newborn, few of the item coming up next on "pops & drops."
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♪ yes, you're lovely... ♪ what do you think? hey, why don't we use our points from chase sapphire and take a break? we can't. sure, we can. the points don't expire... ♪ there is nothing for me... ♪ there's no travel restrictions... we could leave tomorrow.
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we can't use them for a vacation. you can use the points for just about anything. i know... ♪ the way you look tonight ♪ chase what matters. get your new chase sapphire card at chase.com/sapphire. t. oh please. you got the presentation? oh yeah right here. let me stow that for you, sir. thank you. you know, just to be safe i used fedex office print online. oh you did? yeah -- they printed and bound 20 copies of the presentation, shipped it to portland,
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they're gonna be there waiting for us. that's a good idea. yeah. you have a nice flight. thank you. (announcer) print online...you upload your document -- we'll take care of the rest. back for today's edition of "pops & drops"." kick it off with moody's. down 4%. karen? >> it's groundhog day for moody's. the bad news keeps coming. they had a hearing that was postponed while they reviewed the whistle-blower's information. not a good thing here. >> pop here for american greetings. up 30%, joe. >> apparently a lot of people are sending each other get-well cards or something. i mean, they improved cash flow. great earnings on its way to 20. you want to own it. go right ahead, not me. >> pop here for a123 systems. >> hybrid cars you need litium batteries a lot of excitement here. $2 billion company, i'm not sure it's worth that much. >> guy.
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>> microsoft said not worth buying. i say bolder dash. they may not be but somebody else. >> a pop here for trans. what do chinese president hu jintao, burke shire and microsoft and bill gate all have in common? they all wear the same pants. not the exact pair. the same pants. gets their suits from trands. likes trands so much he even made a video for the company's 30th anniversary. he apparently owns nine trands suits so they might be fine suits. >> very fashionable. >> another diget to me from timmy. ann taylor down 5%. karen. >> yeah, downgrade from goldman sachs. the price target's still higher than here but you don't want to be downgraded. skip it. move on. >> another retailer was dropped today. bed bath & beyond. down 3%. joe. >> earnings good but credit suisse down graded.
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in the mid 30s. >> and we got a pop here. >> huh? >> indonesia's largest baby was born government a -- was born yesterday. how appropriate. >> every baby's cute. >> karen ugave twins to twice. >> they were less than -- like a quarter together. anyway. >> amazing. >> it's crazy. i feel bad for the mom. >> yeah, really. >> she should get a pop. final trade after the break. remember the anticipation of hearing the ice cream truck?
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in poland, cargill borrowed the idea... for something quite different. small polish farms had difficulty getting... affordable feed for their smaller herds of animals. so cargill created a way to bring the feed... directly to them... on musical delivery trucks, selling a few bags per visit. ( dog barks, horse neighs ) keeping the small farmers competitive, and their animals happier. this is how cargill works with customers.
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time for a quick programming note. do not miss "biography" with an inside look of ray kroc. premiering tonight 10:00 p.m. eastern time. see the final trade, tim. >> sell. >> i still think that abercrombie and fitch is a short. >> karen? >> i'll take a long, aro, in the retail snide and j.t.? >> buy mcdonald's. >> all right, and if we can, quick check on research in motion, the big story after hours. it was down last check by about 14%. that could be the linchpin to tomorrow's tech trade. so keep an eye on that. i'm melissa lee. thanks so much for watching.
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see you tomorrow night at 5:00 p.m. for more "fast money" on cnbc. have r have a great night.
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i'm jim cramer and welcome to my world. you need to get in the game. go out of business and he's nuts. they're nuts. they know nothing. i always like to say there's a bull market somewhere. "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. just trying to make you a little money. my job is not just to educate but to entertain. so call me at 1-800-743-cnbc. it's hard to keep your head in the middle of difficult action especially on a down day. it knocks 41 points off of the dow. but more importantly, slammed the nasdaq 24 points. that's more than a full percent. this is why game plans matter.
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it's why a game plan arrived at ahead of the action must be obeyed in the midst of the action. you have to be able to think. it's why game plans that say, if such and such happens, then you need to become more positive or negative. always need to be followed. last friday night, i laid out my game plan for all this week. i was using company earnings reports and predictions as sign posts of what to do with broader portfolios. i said that if we saw strength in the defensive stocks after they reported, like general mills, the maker of cheerios, and we saw weakness in retailers arch bed bath & beyond announced its quarter, we have no choice. we would have to grow more negative. we said that if paychecks, the payroll processing company, didn't say positive things about payrolls in hiring, we w

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