i don't expect a lot in the way of the formal guidance, but maybe some color in there, and in general, corporate america a better time on the bottom line than we would have expected. the floor for profitability was higher than feared a few months ago. >> and looking at how we ended the year with facebook and netflix up 9% and wonder if it is segt up fraction harder for the banks than netflix. and we are out of time here, and "fast money" starts right now. i'm melissa lee, and joining us is jeff grasso and the rest of the guys. and so we are geared up for a huge slate of earnings in the week ahead. look at the big names reports, tesla, apple, 3m and facebook. and we are give you a key thing to watch when they report. and later, gamestop won't stop, and the stock is surging another

51% today but there is big drama surrounding the record run. we will tell you about it. we start with big news at the white house. president biden is going to raise the minimum wage to $15, but it could have a ripple effect on the economy and steve liesman has the details. steve? >> thank you, melissa. since the first minimum wage put in place since 1890, and it has been studied with others debated fiercely with politicians and business channels. and here currently earning the $7.25 and that is over 6 million, and leisure and hospitality with most folks in that business and most of them waiters and waitresses and education and health services followed by retail and trade and then of course, the public sector where a bunch of the

folks make the minimum wage. so when researchers are looking for those looking for minimum wage hike, they have trouble finding them. janet yellen said before the senate finance committee saying that there is a large of amounts of economics on this, and the findings of the job loss is minimal if anything. the supporters also argue that higher minimum wages will stimulate spending and also government aid to the employeed. there is a 1% boost in sales every year with the raise. and so now upon raising the minimum to $15 would give some 17 million americans a raise, but it could cost or reduce jobs by 1.3 million. that is the median number and about 40% of the workers make below $15 an hour, and so it is a big boost for a lot of workers and the unskilled workers and teenagers could be the most for layoffs and most would be

encouraged to automate. a tight labor market is the best way to raise the wage, but that is not for a couple of facts. wages have not kept pace with inflation, and notemost have no kept up with productivity, and the higher wage could offset competition for labor in some places. and so for the broader economy, are they bert off with a higher minimum wage, and melissa, you will continue now like a 120-year debate. >> i am glad we can do it, because we have a half hour show tonight, steve liesman, but i have a question for you, because you speak to a lot of economist, and sowhen they hear about this, do they then plug into the models, higher spending? higher economic growth lower jobs what is the input then >> it is interesting. i don't know that anybody has done that just yet in terms of it, but there is some new

research that what i have mentioned that shows that there is higher spending linked for sure to minimum wage on the local basis. price increases are another factor that are out there, and if it is a local business, and they are hit by a local increase in the minimum wage, they may raise the business, but national chains as you know, melissa, they have national prices, so that is a big reason why it may not matter on the local basis if it is a national chain. so they plug a lot of stuff in, and there is still a lot of debate about it, but overall, the literature so far shows that there is not a big employment effect, but they want to site done gradually over time. >> okay. steve, thank you. steve liesman. i think that the consensus or the knee-jerk reaction to hearing this, jeff mills, is that it is negative for corporations, and eat into the margins and raise the costs and might cause them to spend more on technology to replace the workers they have to pay more,

and we have heard it before, and yet we saw target and walmart go to the higher wage, and look at where the stocks are now. >> yeah, that is absolutely right, and to steve's point it is a 100-plus debate and without trying to predict, there are a couple of things that we know for sure how it is likely to play out, and cutting to the chase, i think that it is not going to happen this year, and maybe past this year, you will get a bipartisan agreement to make it happen, but right now, there is very little appetite on the republican side to push something like this through to increase the cost of small business during the pan democdemocrat democratic -- pandemic. this is driven by the smaller corporations, but many of the minimum wage workers are working for people who employee less than 100 people, and because of that and the lack of public support, and you need 60 votes in the senate to get that

through, and you need 10 republicans to make it happen, and that is not going to happen. you can try to get it through the budget reconciliation, and put it through with the next covid vote, but that is not going to happen, because the reduced threshold of votes will narrow the kinds of items to put in the bill, and talking to the research experts on the policy side, they don't believe that it is going to fit into a bill like that, so it is not something that we need to worry about in the immediate term. we know today, almost outside of the minimum wage discussion. just thinking about wage inflation in general earnings will be so important to the market this year given multiples of already expanded so much what happens to margins given possible wage inflation? i think the bottom line is this. we'll get to the end of this year still going to have 3.5 million more people unemployed than before the peak of the pandemic. that labor/supply demand that dynamic, in my view keeps wage

itch fl tame >> what we've seen, steve, many companies investing in technology potentially could be perceived replacing workers. saw that with mcdonald's in terms of selling kiosks. i don't have to order my chicken mcnuggets with a person. order them through a computer basically. is this just going to be a push towards, towards this end? i mean, facilitation of this trend? >> yeah. i think so jeff governed covered a lot ofd mcdonald's great example of a kiosk. any company that can add technology will add technology to replace a human being even before this debate was going on. obviously not 120 years ago but this is something that you're starting to see corporations move in front of but jeff made a great point. this is about independent businesses, strrestaurants goin

out of business on a daily basis. not about the corporations corporations have deep and -- deep pockets and ability to stay ahead of this. mom and pops don't so when you really look at the effect on the corporation, domino's really went gang busters with technology, in a big way for such a long time kb kbi don't know if they can get deeper in technology more delivery versus who's working in the kitchen i don't think it's going to affect corporations to a big event, and i'm always a big believer, melissa, of you can't work around politics. or invest around politics. this is something where with president biden when we tried to invest around the affordable health care acted, all of the things that should have went down went up so i wouldn't start thinking you have to sell these names they'll make accommodations.

to jeff's point, might not even happen. >> a higher minimum wage, 1.1% increase in spending, james. do you take that and think, oh, you know what? that's probably good news. it's almost like a push-pull a lot of big box stores or quick restaurants might fee impact paying higher wages but could feel the benefit of people having more money to spend at their stores >> always two sides to the coin. i love attempts and initiatives that can close the ever-widening wealth gap, but when we look where this impact will take place, individuals who were in this spectrum of the minimum wage category, now excessive competition for those jobs that pay double now and a lot of individuals will get left behind it you're a small business and you have to increase this output from literally doubling your cost of labor, you're going to get the best people and you're going to upgrade those people that are in those jobs

i think this will displace a lot of people and it's a really, really tough debate. why it's been going on so long i don't think this is going to increase spending. because it isn't that much money if you're in this category makings $15 an hour, you're probably struggling to make ends meet so it's a challenging topic absolutely >> yeah. where do you stand on this something that you would think about when investing in some of the companies that are not p paying $15 an hour minimum at this point >> at least on its face. rice resonates particularly in any environment. adding to what everybody said you see a massive chasm between wage growth and asset growth that's even more underscored in this covid environment with that said, how do play it in the market? looking at names that have not experienced that k shape or upper echelon of the recovery. names like rcii, tjx, strong

uptrends appealing to a lower item cost and probably if anything there will be something in terms of additional revenues to offset some of the margin pressure you would likely see due to higher wage costs. >> all right next guest says as $15 minimum wage could have major impact on some of the fast food stock. bring in eric gonzalez equity research analyst. keybank. great to speak with you. focus on the at-riske chains long horn, texas roadhouse and papa john's. how much are they paying now figure back of the energy. went to $15 what would that mean in terms of increase in costs for them in possibly a decrease in margins? >> thanks for-of-melissa great to be here in terms change, look at on a geographic footprint basis, if you were to weigh their footprint versus the state minimum wages are, notice that jack-in-the-box -- sorry, long horn and texas roadhouse,

papa john's, geographic xpoesh herb blended wage ands $15 not to say these companies aren't paying above minimum wage in instances where there's a tightness in the labor market. the bigger issue here is depending which stakeholders you're coming from, whether false or quick service, wages are something restaurants deceit w dealt with a long time new york and large 1cities figur out how to deal with t. the difference between what they're currently paying workers entry level and what the from new minimum wage could be. so looks likes texas, the south, eric, might have the greatest delta. which chains have the most geographic exposure? long horn texas and papa as investors figuring what kind

of hit will it be to the company the earnings >> you are i pose a different way of thinking about it. certainly those chains, long horn texas, more exposure to the south and thereby less exposure to the north or to california. but the bigger -- the more interesting thing here is think about the franchise companies. those franchise businesses like mcdonald's, wendy's, another one, highly franchised businesses that won't feel the direct impact rises in wage pressure that pressure felt by the franchisees to the extent they pass on those costs that manifests into high royalties. >> can the franchisees pass on the costs? could you see a franchise owner of mcdonald's charge more for a big mac than another franchise >> larger chains have advantages you mentioned technology earlier. self-order kiosks. different ways to schedule labor. there are efficiencies the large chains can take advantage of

it's the smaller chains, independents that will struggle to pass on the costs from a, yeah, mcdonald's i don't see them raises prices by 10%, 20% tomorrow but could pass on a portion of it and the other, rest of it they can sort of manage their way through it. then hopefully take share as some of those independents, independents take, try to pass on the full cost of it, they're at a relative value advantage. >> great get your analysis thank you. eric gnz oonzalez of keybank. think of these restaurant stocks differently now >> i think about it kind of as a tale of two stories here one, you have fast food restaurants where i just think generally they're going to be in a little disadvantage given what they've done over the past 12 months and likely headwinds they face as the economy reopens. i think it was mentioned in one of the keybank reap search reports but i like darden. a name i've continued to pay

attention to in the space. i think casual dining will have a little bit of a tailwind as the economy starts to return to normal, start to ramp up valuations they've already done a real good job controlling costs making them astractive. i like the diversified brands. well-known brands. look at the chart. in a nice, steady uptrend looking like it will break out to new all-time highs. and valuation, 17 times 2022. >> believer in reopening trade, casual dining would have more leverage to that, james. where do you go within restaurants? >> i like mcdonald's actually. it's a big corporation with a long history of dealing with economic cycles in our country it's a brand that's never going to go anywhere they're ahead of the curve, they understand what's happening in the economy. they're going to continue to pivot. they have all the data and technology they have the breadth of understanding of consumer

behavior mcdonald's is my pick in this category. up next, going beyond the bottom line. single most important thing you need to watch in companies reporting earnings next week. late. game on. shares of gamestop soaring as an army of day traders go to battle with one well-owshknn ort seller we'll bring you the full story when "fast money" returns. use a single hr software? nope. we use 11. eleven. why do an expense report from your phone when you can do it from a machine that jams?

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welcome back to "fast money. earning seasons ramps up next week with am, tesla and others set to report. cutting through the noise and going below the bottom line. pick one company and single most important things investors need to watch when reporting. around the desk. steve, on apple. what's the one thing to watch? >> got to watch service growth services growth. any indication they can give or any insights to give there if you remember, the biggest pushback on apple was it was a hardware company dependent on iphone sales still 40% sales. i want to see that services growth jump above 53 billion that's the reason to buy apple as a growth company. >> yeah. jeff, i don't know what you're watching, but apple certainly key for the market for the

entire tech trade. especially given the monster week tech, big cap tech has shown, this week >> no question key for that and for the value growth trade apple tends to be categorized on either side of the fence i would watch that closely totally agree with steve in the sense apple is trading at a valuation now. needs to be justified through a certain level of growth. that level of growth ends up being justified through services so you know investors will be laser focused on that, making sure that growth trend is intact to justify valuations currently paid 100% agreement with steve on that we continue to hold the stock. said it a million times. a stock you hold not a stock you trade. for us still going to hold it through earnings. >> anden the next bickeg earnin report we're watching. what's on your radar >> rhetoric around censorship, free speech and how they're going to deal with hateful type of rhetoric. we've seen account suspensions

wasn't too long ago, blm movement see how they address this situation resonating with a larger group of people what i'm focused on. >> after the capitol riots, james, facebook has a lot of spr sp' splaining to do potentially. >> when they speak i listen. public perception to the business will be the most impactful facet of how this stock behaves. i think they're spot-on. walk a careful line of growing their ad revenue and getting viewership up, keeping memberships, but when you're that big and have that many watching you you have to be sensitive to any social disdhaect may come. >> yep 3m out tuesday jeff, watching this? >> yeah. i think certainly picked the most boring stock of the bunch the interesting from the scent

of 9 cyclical trade going on one name hasn't participated like a caterpillar and looking at business segment specifically one on the health care side. health care underperforming. had a decrease in elective procedures just due to the coronavirus. that's the higher margin business i want to look at margins in that particular area to see what's happened over the past quarter given the virus backdrop also look at transportation and electronics, because it's another area that's ban consistent trad, significant last quarter and an area you've seen margin compression in the business can get then up to the 35% range, a big driver of bottom line and see if they're providing additional guidance. not only telling for 3m but the overall economy in general. >> finally as tesla and james watching this. seems tesla has a lot of alignment giving the sbone into this quarter >> most important, deliveries.

beijing wants 25% of those automobiles out there to be electronic vehicles. they're only at 5% now tesla so far is doing great. delivered 49495,000 and of a 480,000 delivery promised. cheaper than local rivals. might be a better car. autopilot feature. most importantly here, that growth is going to happen in tesla so far delivering. watching carefully the pace at which these vehicles get delivered, because that's the arbitrary success for them. >> all right up next -- game on or game over the epic battle breaking out over gamestop. the drama, next.

welcome back to "fast money. check out shares of gamestop surging 51% today. record move driven by a retail rebalian going to battle against andrew left who laid out five reasons why he thinks this stock will go to $20 a share sparking big from those online and releasing a letter saying no longer commenting on this stock. he's been harassed by what he calls an angry mob committing crimes and turning information over to the fbi, fcc and other government agencies. goes ton right we are investors who put safety and family first. and when we believe it's compromised it is our duty to walk away from a stock. this has been a crazy ride for gamestop for sure, steve gros

oh just t grasso. i don't know if you've been on reddit forums, commentary is going on there. >> this is crazy the same type of thing where you get these cult-like investors that were in tesla or apple. if you say anything bad about them, it's over for the stock. but this is terrible >> yeah. keep you abreast of the developments on this story thanks for watching "fast. tweeting final trades, by the way. "options action" is up next.

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happy friday, "options action" fans another great show lined up for pup here's what's on deck -- >> announcer: everything going on it would be easy to overlook the fact that apple's out with earnings next week as the company regains our collective attention, carterworth is plotting out whether the stock can regain its leadership position. then -- could old ge be one of bestways to play the new biden add mun strags tony plugs you into what's happening in that stock.

lots of hints there. and --