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tv   Fast Money  CNBC  February 15, 2017 5:00pm-6:01pm EST

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charlie munger there. they turned positive on the close. >> nobody really knows. i don't think so but they're in a better position to know. & that was his point. don't tell me you have a these ois this because you know where it is all going. much more on charlie munger. that does it for us on "closing bell." "fast money" starts right now. >> live from the nasdaq markets overlooking new york city's times square. there's a strange market anomaly that suggests more gains to come. plus, twitter shares jumping after dorsey jumped in and bought stock. we'll give you all the details. and later, we're covering all the major earnings report after the bell.
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cisco and all the rest. the rally that helped today. president trump meeting with a number of the top ceos at the white house today and they all made their case against trump's border tax. eamon javers is in d.c. >> reporter: .to the ceo of target very briefly after this meeting. a lot of them didn't want to talk about what happened. they did definitely bring pup border tax. presumably behind the scenes they made the same argument they've been publicly. here's the argument against the border tax. they've been saying it could like prices by as much as 20% and the tax could derail job growth. that's a key priority of the jump administration. they stay border adjustment tacks could cause a recession. they said that to the united states in the president of the united states in the closed doors but in the open doors,
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they talked about the man's for a tax cut. that got the market's attention. here's what the president had to say. >> tax reform is one of the best opportunities to really impact. so we're doing a massive tax plan. it is coming along really well. it will be submitted in the not too distant future. you're talking about big number of savings for middle income and very much for business. >> a lot of question now about what the not too distant future means in terms of introducing that tax plan here in washington. of course, a lot of questions about what specifically will be in and it tax reform is an up-hill lift. any time you're dealing with a major legislative package like that, they haven't done something of this scale since 1986 in washington. of course, the politics in washington this year are very different from what they were
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then. so no guarantees that this will at all be shepherded through the process and be exactly what the president wants at the end of the day. but here at the white house, they're going to get started very soon. this is not just about the border tax. follow my logic. a lot of elements could be jeopardy. it has pushed to record highs. does this mean the rally could be in jeopardy? if the tax plan does not go through? is the rally in jeopardy? i think you could make the case that it could be. the banks have been what has led. and i don't think it is necessarily about tax reform for the banks as much as it is roll back and regulation. so if bank regulations don't get rolled back, i would be concerned.
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i don't think the narcotic is set. i think it is 50/50 back and forth. i think if it doesn't go through, the thing that would concern me would be if measures to then banks didn't go through. then we have huge problems. >> this whole tax conversation seems part and parcel with how the whole campaign went. at the level of detail at some point doesn't even really matter to people. we have someone talking a very different set of objectives than the last administration. the reality is you'll to have pay for a tax cut somehow. the border tax does not make sense and i think it will kill all these iconic brands in a big way. saying this tax cut as it is presented does not detrail rally. i think we'll get things more important to me. the fed earnings and valuations. we were not expecting this to be solved overnight anyway. >> that would be a big lead tax cut. expectations. he set expectations.
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we hear it all the time. massive cuts. >> he is a phenomenal -- >> it's been set. what do we have? we can't fulfill those obligations without a massive shift in something. what was interesting, the ceos didn't want to talk with their frgss could with trump which means it will probably be relatively negative for the retailers. it would catch me off guard. that would be one of the biggest things. the signs are indicating it. trump is saying massive tax cuts coming. need offset that some somebody. it will have to be through that and the ceos not having an open conversation about it. i've been saying it over the last x-period of time. i didn't think it would occur. the signs, what he's saying over the past several days are scaring the heck out of me.
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we are hearing expectations being built this for a tax plan that people are expecting to be massive. if a back tax isn't posed. it will put retail into a recession. >> i think you have to look at what jeremy was talking about. what could derail us? we know jeremy has been such a bull and he's been right. of course he's bullish. just about everybody i've heard of. the reality is, if you go over the last eight or ten years, this guy has been right. the markets have come back. he talked about tax wars being a huge issue here. and that i think is where the problem is that we face. and what could derail this market. on the other hand, if we get the deregulation a little bit out of the financials, maybe it is not a complete exiting of dodd frank and all the rest. if we can do something to actually help some of that regulation. >> the tax reform though, does
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that indicate there could be cracks on the way to deregulation? >> i think any removing of regulation is a win. >> but how long will that take? at least 12 to 18 months. >> how about this? it will ill fact earnings. >> how about we look back at the earnings. we talked about it the previous time. what really kicked off this? the reinvigoration came from the financials. they weren't the actual ones that reacted. they stayed in the flat line between 23.75. now all of a sudden, what is really broken out once again. you look at it now. look at the way it has taken off. and how about the huge disclosure? he bought a lot. and i mean a massive amount of calls in the financial spider.
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>> he's been on the wrong side of the trade. >> he has. this is a huge winner for him. are we saying it is intact even if tax reform looks less likely? yes, it can. >> a show of hands, please. >> all right. >> do i have to do this? >> you have to tell everybody. >> we're smarter than that. >> the bottom line is there were a lot of things that happen that were very bullish. you had a slew of fantastic economic data out. you're getting at the rally. it is the same question. >> the fundamentals. >> other things going on in the market. >> do i agree there are other good things happening and i think the rally does not need to be derailed by what happened today in washington. >> okay. i think we'll see a solid news
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event. the market is underestimating the risk that's exist, the ability for this administration to enact what they want to get done and they're using language that is setting expectations at a bar that is significantly higher. we're in a greedy market. retail investors across the board at some point it will snap. it will be a sell in the news. we get the news with the tax cuts. not what people expected or there will be an offset that is worse. that's my call. >> i think they're a very difficult buy right now. if we're going back to the retail side of the trade. that's a very difficult trade right now because what is amazon proof? that's what you have to look at. otherwise, how difficult is it for all these retailers? who is amazon proof so far is in the last three years? costco, best bye, tjs, ross stores. those are the stores that have been able to manage to continue
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to grow. you look at where it is now in the last three years. huge runs for the upside. that's because they've been able to withstand this push from amazon. >> and i agree with everything you're saying. but the sentiment is so absurdly bad. if you look at our positioning. you've now in the last four or five days seen short conversation that has brought that positioning in 20, 30%, i'm getting from my prime brokers. a lot of people are, they're way negative. they haven't necessarily expressed that in the form of a short. then you have names like a gap or a macy's or a nordstrom's. they've all been in the news and there have been reasons for it. these are great balance sheets. these are companies in many cases are slowly engineering, i'm not calling this a turn-around. i'm calling it a sentiment. they are way oversold. you want to sell this in the hole? i'm telling you, we've seen recovery.
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if you think there's a border adjustment tax, what about macy's? do you think they'll be hit the hardest? >> if you're a best buy who apparently makes a million dollars, if there's a border tax they lose two. as it is script, it is a negative. >> these names had issues prior to everybody hearing the word border tax. nordstrom's problems went back six months. to tim's point, i think they have sold off enough where you can take a look it a. but the day trump was elected, target was a 62. traded pretty much in a straight line. i think for a trade it is interesting. i think the numbers will be disastrous when they do report will rally into earnings. >> what did you do? >> took profits. just taking down positions. long term i'm positive.
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in near term, we've come too far too fast. and a lot of retail earnings, guys. jcpenney, gap stores reports. you'll see guidance being a little bit concerning. february was train wreck. >> discipline always dictates action. when you have that situation like we have right now. in the last three days, i've sold 16 positions and bought six. so that gives you an idea of what is shifting around. i still believe the story but i would rather have the exposure i have right now. >> of the xlf. i still own bank of america. i'm in the stocks i want to be in that i think have the best but the xlf has made such a spectacular move. that was the one i wanted to trim. >> trading your portfolio is different. fading some of these names. it is a little ebullient.
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>> jack dorsey made a, 7 billion bet on the stock but it is not as good as it looks. check out shares of cisco. we'll hear from the ceo about what drove the quarter this hour. ways wins.
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built for speed. built for business. jack dorsey is buying the dip. naturally he tweeted the move saying, love twitter with an s.e.c. link. however, it may not be as big of a move as investors think. he had previously dumped $125 million worth of stock in 2016. should this renew investor confidence or is it all smoke and mirrors? >> ceos buy and dump it. you can't brag about buying $7 million worth when you sold $125 million worth. the metrics are still in
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decline. there's really no growth opportunity given they're catering the upgrades to the current user base or the really big user base. so i look at the story and say there is no way this stock will hang in here. it is only up on any sort of takeoff premium. this will be a $10 stock. mark my words. it is going to 10 before it goes anywhere near 20. >> he'll probably be buying more then. isn't their core user base this very avid grooch people. i don't think the growth is really the issue with this company. i'm not saying it should be content at 320, but if we were able to monetize it, we would not be having this conversation. >> i agree 100%. they should not use that metric.
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google doesn't use it so twitter shouldn't use it. i hear that. i thought it flubbed 109 million shares. if you see it flush 10%, buy with both hands. that wound up being the right thing. i think it rallies from here. i think if you're looking for the down side, to me, you're playing against something that might not be there. >> the only way to play it is through options. you're only playing it for a takeout. virtually, when you look it a. monday at th they do it only because they're going against facebook which is not the great comparison but everybody uses it. but jamie dimon steps in for the dimon bottle and puts down nearly $30 million on his trade. steve steps in multiple times. comes in $30 million here, $50
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million there. throwing money at his stock. >> they've been raking in the dough a long time. >> it probably is. just the play that. >> my argument would be, he's right. he sells $125 million and he puts $7 million. that's not something, we want him to buy it but that's not it. >> he just made a statement. there's no way it will be taken out now because he has obligations. it is illegal for him to buy the stock. at least in the near future, there it's no deal on the table. probably the most credibility out there. it was emblematic of the financial sector. we were talking about credit risk. the world falling apart. and he said my business is safe.
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my balance sheet is safe. i think it is apples and oranges. to say that jack dorsey is a great trader is not what we want to be saying. >> let's shift to our move of the day. the biggest biotech. this grocomes from appaloosa. is this the time to buy? >> we've been saying this for i think a couple months. we've been right. the stock held-the ibb held where it should have on the down side. it is now significantly above the 280 level that we talked about. these stocks are under the radar. nobody seems to be talking about them. and we've said this. you will wake up one day. the ibb will be traded 320. just like when oil a year ago was trading from 2540.
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and then the same thing is setting up in biotech. >> i still own gilead. i sell calls every couple months against this position and it has been on three months. they have on make an acquisition i haven't understood why they make that move. until they do, that's the problem. the present drugs that they have. those are going down in value all the time. >> i agree with that. i've been very vocal about gilead. what i say about the ibb, this break out is like a lot of other things. we saw ibb break out at a cheer level. i think the market was in the tanks, we would be hearing more. i think to say that suddenly things are game on for the biotech sector.
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different than yesterday. i'm not so sure. >> on the heels of that, a little short recovery going on. i do believe, look. i love the ibbs. i think it is a fine level for the long term but you could see them settle out. still ahead, two big names. cisco and cbs. first in business worldwide. in the meantime, here's what else is coming up. >> forget apple and goldman. there is another dow stock that has quietly made four straight days of all time highs and traders see more to come. plus, the strange market ano, ma'am reply has traders saying this. >> just keep buying. >> we'll tell what you it is and what it can be for more gains to come. toda iinle worer. . d als.
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that is making new highs for get this, four straight days. we'll give you the name. but first we start with the record in the markets. the s&p 500 on an historic winning streak after posting seven consecutive days. here to break it down is a man whose winning streak never seems to end. >> if i even had anything close. remotely close, i wouldn't even know what to do with myself. but the short term stuff is pretty straightforward. five days in a row. seven days in a row for the s&p 500. the same for the nasdaq composite. and by the way, that seven-day win streak, the longest streak cynic wait for it, september of 2013. and according to data from dow jones, all three major indices setting record closes five days in a row. that hand happened since january 3 of 1992 when it ended the six-day streak.
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47 trading days. that's how long it has been since the s&p 500 has seen a move of greater than 1% up or down. so the trend is your friend and that has been a gradual move higher for some time. a lot of stats. but one more because someone tweeted a question. the average value is around 13.9 and it has been trending lower since. the last time we were above that level interesting first trading day of this year. it is worth noting that the vix did close higher on the day but still language wishing. so vix stocks streaks all over the place. back to you. >> all right. thank you. so does this point to even more gains ahead? let's find out what it is. >> great to be here. i think the big takeaway, when we look at the low volatility is that this is a common feature of bull markets. it has been 42 consecutive trading days without the 1%
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range. we go back in history. that really only happens in bull market advances. the mid 2000s is another example. so low volatility. while the move has been pronounced, it is more a feature of an uptrend than a down trend. i think the other interesting takeaway, since the election, s&p 500 is up about 8%. that seems like a big move over a three-month period. when you look at the forward returns. this has happened a lot over the last 75 years. when you look at it after the 8% rally, the forward returns, the next six months, are all above average. so strength often begets strength. don't be afraid of it. and lastly, any time we have a market advance we have to answer the question. is it overbought? we don't think so. it is only 8% above the moving
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average. historically you need to get it to the 12 or 13 range before would you want to call it. it almost almost four years since the last time the market was overbought. people don't know what it looks like. >> so should we invite chris over? i think yeah. >> on a day like today? he will bring the chair in. thank you. >> handsome men. >> a handsome devil. >> looks notwithstanding. the statistic with 42 days. it's a more than 1% move. we haven't seen that for 42 straight days in terms of the trading range. >> if you look at the inday range, it has been 42 consecutive days where that range has been under1%. when we look back historically,
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that tends to be a feature of bull markets. that means we're on the verge of an accident. look to the 2275. very good support on this. if you do get some type of a pause, the trend is up. remember it has been three years, almost four years since the market was overbought. people forget what that looks like. >> we had a long conversation about how financials have been leading the market. and how that's the key. what do you see in terms of financials and how that group has built its gains? >> this is a regime change in a group that hand been with us. you have to go back to the mid 90s for the last time it was any durable period. since election day, there has been 100 sell side down breaks. i think a lot of them don't know how to model regime change. they don't know how to model
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animal spirits. so we looked at the resumption of a trend. that started last july. last august. this is a bull market. stick with it. >> so the internals of the market. the last few days you've seen advance declines. more decliners than advances. at what point is that a big deal? i would note almost 70 sperse within 3% of making the high. there's actually a lot of stocks in pretty good stocks and i think the new high list is supportive at this point. and the line is making new highs with the index as well. >> this will sound like a philosophical weird question. in terms of the charts. the charts look like it should go higher. is there any coincidence between higher valuations and where the
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charts fail? have you ever found that? valuations are stretch. that will be the reason, the straightforward reason. >> i think the irony of the take, the pockets where you find the most excessive p.e. ratios are in the sfoks were your leadership over the last three, four, five years. the markets already making that distinction. the expensive quarters are not leadership stocks. i think bank of america still trades under book or thereabouts. so that's the irony. the strongest pockets are not the most expensive. >> i'm with you. all the cards on the table make the assumption tax reform is passed. repeal of dodd frank and no back tax. i say to you, 100% we should be moving in this direction. we're at a point where the
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market is pricing in a lot of positives. we could have major disruptions that could offset this. >> i think one of the most compelling thing is when something goes up and it should not. if you read the headlines in the last 72 hours, you would think the market is at a new high. i think you see in it particular with like health care getting better. despite all the headlines that we see. i expect the resiliency. i like that the market got up in spite of the news. >> thank you. >> nice to be here. >> guy over here usually says price is truth. >> well, price is truthful then this market is pretty strong. it was dripping.
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>> i say it with respect. what chris points out is very important. what are the areas that are stretched many when you look at it, it is stocks, in segments like the utilities and some of these others where you're going, gosh, these are trading at 22 times. even where they are right now, they're not stressed. if you go p.e., you're not stressed in that area. and i don't think you are in other areas like the technology and the semis. and those are the leadership. >> cisco is higher. we'll flare the company's ceo on the quarter and find out what he has to say about president trump. and it is not just cisco. all on the move. they're wrapping up. we'll bring you all the headlines that are driving these moves. ♪
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we've got an earnings alert on cisco. hey, josh. >> you saw cisco shares moving higher in the afterhours. just going back and forth with
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mitch steves who covers the names. in part he would say, the recurring revenues, 31% versus 28% last year. he is points out that means higher margins down the road. it is diverse identifying away from legacy. chuck robbins posted the on owning, distributing more software and on capital return. >> we drove strong profitability, healthy cash flow and growth and defrtd revenue continuing our shift toward software and recurring revenue. we drove 51% growth in our product deferred revenue related to our recurring software and subscriptions which now stands at $4 billion. we're also pleased that the bored approved a 12% incede to our quarterly dividend. >> what about the potential for cash? cash repatriation? he said he would use it for a
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capital. >> that's the key. repatriation. only 10 billion of the 73 billion is available in the u.s. they'll make cash acquisitions. this is a name that will work. so maybe look for a dip to buy. rush out tomorrow and be aggressive. this is a name as we said, it has a floor underneath it. >> a lot of people were down thinking that they're going to show market share losses when it comes to switching business. that would continue to be a drag. et cetera, et cetera. >> and they talk about margins on the wall. this was the very first pitch on this show. i'll tell you. >> a victory lap. what i really like, it was september last year.
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hey, look. what do they need to do? everybody needs to focus on where their growth will be. it is a transition that is very early. we're seeing the fruits of the labor of what's going on. the ceo is doing a magnificent job and they're growing in the right spot. >> security is huge. fast pitch. this is a point on cisco. their gross margins are holding strong at 64. all the other things we're talking about. the dynamic going on in corporate america. enterprise is getting stronger. this stock has been national to sideways for two years. it is their time. >> hey. cbs did saenld positive note what is ahead for ycbs with mor content in the works and less advertising. he said he is optimistic about
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the new lighter regulatory environment with president trump. >> we know him very well. i think he will be very beneficial to our business. he is deregulation. and we would be very interested in the tapp moving up. we're looking forward to not having as much regulation and having the ability to do more. >> he also weighed in on the nfl ratings which were down in the regular season saying cbs is working with the nfl to make changes such as speeding up the games and reforming advertising. >> clearly, this has been a hot button issue across the industry. it does bear repeating that the nfl is the premier property in all of media. and we feel very good about the long term partnership. it is fair to say this season's decline, as well as having three fewer wednesday night football
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games affected our ad revenue. >> he talked about all the way they will generate revenue. they've struck a deal with verizon and hulu. while they are one not to be including directv, they're expecting to have more negotiations about including cbs in that package. >> it's not a disastrous quarter. it traded 15 times. via com is probably ten time forward earnings. so i think the trade is, i think you'll be inclined to buy this dip in cbs. not so fast. at the beginning of 2014, it traded up to $68. seemingly paying the now. i think you can get it significantly cheaper. i mean below $60.
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>> i bought via com on the dip. they're throwing money and resources at their six best brands. you have valuation and momentum. kind of ironic that cbs is big. sf the top pick. >> going to disney. just off the highs again. i still. they have win intheir back. a little toward politics and toward smorts. we'll give you the name and what has them so bullish. plus, is this the best way to boat a consumer?
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warren buffett's belief in the airline industry. >> i tell you what. if you think about what happened to the trans ports, they traded. they led the rally. fedex, ups. ultimately you're seeing it is all coming together. in the case of fedex, ups has pulled back. this will still be leading and the cyclical lit muss test for what's going on. it is very good for the rails and pricing and i think some of that is moving higher. >> you mentioned 16 positions to six. >> sold 16. i have a lot more than 16. one of them that i added will be the final trade. >> don't give it away! >> we like to call it a tease. >> i know it is warren buffett. is it buffett or some of the guys who are starting to maybe push in and be more of the
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trading effort of mr. buffett and berkshire hathaway? in terms of apple and getting as big as they did. also the airlines. >> it doesn't bother me. i think when it comes down to it. he either says yes or no and that's the end of it. i think when they're presenting these things, you look at the books and dealta america and united and southwest, it makes sense why this fits into mr. buffett's category. . it could be a name to take off the table. >> price line. basically trading at all time highs. the trades at 22 times forward earnings. i think price lyine will contine
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to rally. >> double earnings average, double the fun. >> you just love it, right? okay. let's start with marriott. first off, the world's largest hotel operator in its first full quarterly report card after the $13 billion acquisition of starwood. hitting a high and pretty much confirming the numbers. also slightly better on the most important metric when it comes the hospitality. the average revenue the hotels can earn on each and every room. they're also giving back a lot of money. expecting to return $1.5 billion to $2 billion in share buy backs. already declaring a like of 30 cents apiece. after acquiring starwoods,
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marriott is busy with every third hotel room. they said it has started off well with hotel operators with the inauguration boosting demand for rooms in the month of january and d.c. in particular will be a hot hotels market in 2017. meantime, we have another disappointing report card. the fourth in a row. not only falling short but its display advertising. and the new instant booking feature where know roll it on. it has created significant head wins. >> thank you. you like the high there? >> no.
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i think you have to stay away from it. they will get taken out. it was google or one of them. >> expedia would be my brand. i think they're making the most move. the highest growth. probably the highest p.e. in the space but i think they're defending it, especially globally. >> go ahead. >> i was asking -- >> would you rather. >> price line. >> i'm not playing. i'm asking you. what do you like? what type of trips do you like to go on? >> all sorts of trips. with my family. with my entire family we take cruise. >> take cruise. because of the ages. >> carnival cruise. >> and you had the ceo on your afternoon show about four or five months ago. the stock was floundering around. >> you know what? >> it was funny.
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>> the cruise ship. >> look at that stock. >> don't be hurt that she won't take a cruise with you. >> travel stocks aren't the only ones surging this year. home depot hits all time highs and one has it even higher. >> even though they're not too to report earnings next next tuesday, where we saw the most opening activity was the march 1 calls. ultimately almost 2,000 contracts traded and that's a bet home depot could be up 6%. to put. to put it into perspective, they have only 2%. with trading at all time highs, that might be the reason. >> do you like hope depot in.
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>> i would local to troy it. >> coming up next, airlines are soaring today but pete says this is the one high flying name you should buy. ♪ guyhey nico, happening re? this is new alersystem for whenev anythin happens in the market. kid's a natural. buthinkorswialreadlets you crea cusm aler for all the things that are iortao you. shhh. erts on anything at all? not ly that, you n acon that opportit witht one p right from t alert.
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wow, i g we don't cust alerts on thinkswim. eonly atd ameritradad and i know ahing or two about trading. so i trade wh e ade, cust alerts on thinkswim. where true trarsdeadad on a tderked tdeplatrm thahat. geoff the e mputer traitor annon sound)
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geoff the e mputer traitor this car is traveling over 20. win, every econd matts. both on ac th the help of at&t, red bull raci can share critical information abt every in of e car frfrtually ywhe. brakes a getti wm. confirmed, danl you need t ol your brak. understood, brake as back clicks. giving them the agily ave spd prion.
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snmplt pete, kick it off. >> a nice little bump today. ual. we saw a lot of action there. i'm in there with buffett. i think this is going higher. >> david seaburg. >> mcdonald's feels like it wants to drif to $130. i would be a buyer. >> bested one. >> that's what they call me. cisco to me, this is a company that while they're transitioning, their core business is going somewhere. the dividend is very attractive. it is time for this one to really break out. >> hi, how are you? >> was it fun? >> it doesn't need any -- look
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at that? can we get the camera on his vest? >> look at that. chenil chenille. >> do you know what else looks good? a red hot would look nice. >> that's a great call. thanks for watching. "mad money" starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. ♪ hey, i'm cramer. welcome to "mad money." welcome to an vest in america, defining the future. welcome to cramerica. other people want to make friends. i'm just trying to make you some money. my job is not just to entertain you but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer.

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