tv Fast Money CNBC July 26, 2022 5:00pm-6:00pm EDT
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from other companies like intel, perhaps we see a trend forming. >> i am going to leave it there. i have got to run. i will talk to you again soon. that is victoria fernandez joining us to wrap up our earnings. we have a huge interview coming up right here on overtime. jeffrey will join us exclusively to get instant reaction to the fed. i look forward to seeing all of you than. because are about to get underway. fast money will pick up that story. that show beginning right now. right now on fast, and earnings bonanza. alphabetic, b cell, texas instruments and aaa all reporting a mix of the stocks. countdown to the fed. we are 21 hours away to the next consensus of interest rates. could they pull out the bazooka and go 100? the former fed president will be here in just a few minutes. shopify's drop. it is
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laying off 10% of its staff. they are the latest company to admit it misjudged how long the pandemic boom would last. this is fast money live in from the nasdaq market. i am at the heart of times square. we start off with a busy night of earnings. nearly 4:dollars reporting results in the past hour. check out the action and alphabet, microsoft, visa and chipotle. our cnbc all-stars are working away and digging into the numbers listening to the conference call. we started off in danger. breakdown alphabets quarter. >> melissa, i think the take away it is not good but not terrible. that is not by a lot though. alphabet remains cheaper on a price to earnings ratio. the company is contending with a slowing market, but it is perhaps less vulnerable than its peers like meta and snap.
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41, google has search ads integrated exposure which the cfo called out an area of strength. more surprisingly, especially in the wake of the walmart results, she also called the strength in the retail vertical. the dollar strength very much in focus and a not so great way. it was a 3.7% headwind in the second quarter. telling me she is expecting the headwinds to be much greater in the third quarter. melissa, back to you cam, we have to go to you. what was your impression of the first quarter? >> it was a little bit of a relief. i thought it was the tiniest miss. yet, what the stock has done in the last two weeks or so, it wasn't consistent with a tiny miss. that was looking for something much more dire, especially after we saw the snap news. i thought it was good. google cloud lost a little more
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money than i thought. it is not really the story there. i thought it was good. i think $13 billion they spent to buy back stock, i think they will continue to do that. i am happy to own it. >> the context of the move higher than 3% in the after hours. they moved lower about 11% leading up to this report. what are some of the outstanding reports in this quarter? >> it was a massive underperformance for sprint going down 11% over the last 12 days. karen is right also on valuation. it is as much of a bargain as there is anywhere, let alone one of the biggest companies in the world pick they have 11.6% sales growth and at sales.
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this is 81% of the revenue profile were roughly 56 billion. there are a lot of headwinds that have been flagged, this is a relief. i think that is the call. you have the number that was better, even though you have slight misses. look what they did to the stock. relative to the s and p, i think it underperformed by about 50% since april. big relief to one of the highest quality names. i am not hearing the headwinds people want to hear about the consumer. >> this is all about the setup. you nailed it when you said it was down 11% leading into this. i think the main take away for me is the market realized after the bell that this is not snap. you are looking at a company that is still can fire on all cylinders. although, growth is slowing. it is the slowest growth in two years. the market is set up and the market is delivered.
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it is much better than that. longer-term i think you are fine. shorter-term i think you probably sell whatever green you have got. >> i guess it depends on what you believe the review is. the company is saying what it is singing. if you believe -- let us say you believe we are in or headed for a recession. then, how do you feel about the stock? >> i think they are probably best suited to weather the storm, i would imagine. everyone said valuation. we have been talking about it for a while. i would say it is an okay quarter. we have seen much better orders out of google over the years, without question.'s was good enough. we are getting back to where we basically closed yesterday. with that being said, youtube was in a disaster. youtube is at a 12% of their
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revenue. that was good. you can definitely wrap your head around a stock that, -- you talk about backing up the cash. at a 17 times next year's numbers would probably the low teen eps revenue. that is okay in this environment. >> $140 million on hand. shares are turning positive in the last few minutes. the company is reporting emison the top and bottom line. steve has the details. >> reporter:, the turnaround in the tock is because of some positive comments from the cfo ahead of the earnings calls. 223 four eps. as for cloud growth, it is slowing 40% growth versus 43% expected. that is a big thing to look at. microsoft is getting a lot of reasons for a wide miss on its own outlook. we were expecting
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this to be a big headwind, but it is worse than they even expected. took $0.04 off the eps. this is one that really stuck out to me. a deteriorating pc market in june and the covid lockdowns in china attribute to eight $3 million revenue hit. that gives a hint as to what to expect. that was a $100 million hit pulling out of russia. $126 million. add it up and it is about $1 billion hits to revenue. we are going to have more commentary coming up soon starting in about 20 minutes. >> we will also get the guidance at that point which will be key. thanks for that. keep us posted. headline steve was referring to was the cfo saying they are not seeing a weakening in big corporate deals. it is obviously the big question mark heading in. what does enterprise look like? so far, indications look okay.
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>> that is what we want to hear. you are getting the view on the add cells. it is weakening. it is still an incredible number and still the growth part of their business. you heard about surface sales. they mention strong commercial sales. they mention commercial bookings being strong. not really weakness in enterprise. affects dynamics not would you should be worried about. even though the company gets more than 50% of their cells internationally. i look at the stock. after the print, we traded down that number right after the print, which is the low it hit on the june 17. this is a stock that often has been struggling. nasdaq has had a rally over the last 3-5 weeks. it tested the low very strong response in the after hours. let us see how it goes. not really anything to complain about on enterprise.
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>> this is the first time it has missed on the top and bottom line since april 2016. how do you feel about microsoft? better? >> it is down some all-time high. this is really an interesting one. i think it all hinged on the comments we are not seeing a slowdown in demand. that was the market sigh of relief. now, you have to say you still have 40% growth and the cloud is probably going to grow. that is pretty remarkable in this environment. that is okay. i am sure you get all of the linkedin notifications. you say are you okay with the stock trading 23 times next year's numbers? i think i am for microsoft. understanding growth will continue to roe.
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if they are not seeing a slowdown yet, it is a pretty encouraging sign. >> i am wondering how this makes you feel about that position. >> it makes you feel fine about the position. we come back to this issue of what does the market reflect in its pe. this is obviously higher than google. at this valuation, i think it was good enough. one thing that is most important is the stock is not trading down. even though it was a mess, the top line and the bottom line, maybe, had we oversold things going into this print, i think it is important for what happened the rest of the week. >> if you take them in toll, them being alphabet as well as microsoft and maybe to karen's points, this is reflecting the
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fact we have come down a lot going into this print. the expectations have been lower. >> for me it is all about the setup. there is a difference when you look at how much percentage of revenue. it is not even close. it is fractions. people sold off and investors sold this off on snap. you look at these longer-term charts, these have been in a downtrend for quite some time. snap put the nail on the coffin. it was a little too presumptuous. these names are not the same quality, once again, as a snap. as far as the enterprise spending not kicking off yet, companies will freeze hiring. companies will then lay people off. then, they will cut the spend on a microsoft.
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i think that is a little bit longer as we get deeper into recession. right now, i say the same way, this is a trade. if you can get some green out of this post earnings tomorrow morning, i would say take it. i think these things are way too extended. the pull forward with a way to drastic. i think you have to take the profit. >> let us get more on these results. great to have you with us, jerry. >> thank you for having me with you, melissa. >> you saw the stock turn on the dime with the comment about not seeing weakness in large corporate deals. are we jumping to conclusions? when do large companies scale back on their spend in a cycle? >> that is exactly right. that is primarily the reason we saw microsoft reversed after hours. investors are on edge appropriately so. i think there is a lot of nervousness in the investment
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community, especially with mcdermott making the comments he did talking about four and a change headwinds impacting the business and slowing down. the cfo making that comment, i a pre-i completely agree. we saw this during the heart of the pandemic with respect to accelerating investments and digital transformations. this is to make sure that businesses were competitively positioned. you wants to make sure you are moving into the cloud. you want to make sure you are spending on that. >> we actually have some breaking news. just put a pen in it for now. we have breaking news from twitter and it's a deal with elon musk. >> twitter announced it will be holding the vote on september 13. this is the latest from the company. we are still awaiting a date for the lawsuit for when the
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delaware court will hear the lawsuit. now that we have the date of the 13th of september, that is the next inflection point here. this is all a part of and sec filing. bay will be voting on this on september 13, at 10 a.m. >> is this a formality? obviously they are still waiting on a court date. >> it is a formality but it is also a tactic. if you get the vote, which of course, they will get. they will get the judge and when the judge rules, and they hope it is in their favor, they will say there are no conditions left to close. we are in a position to close
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immediately. that puts a lot of pressure on elon to try to wiggle away again. >> what is your current position here?. trading position? >> i am short a straddle. i don't think that much will happen in the next 3 weeks. >> tim, you had a question for jared? >> jarrett, if we fire along, we heard concerns about the end of june and enterprise, give your readthrough. are you concerned by the pc announcement? we are looking for places where somebody is rolling over here. >> for sure. at the end of the day pcs are slowing considerably. consumer is in a really tough spot with respect to end market. when you think about the fact windows oem for microsoft is a high-margin business, it is definitely a headwind when you think about the business heading into 2023. certainly nervousness around the consumer, especially in the context of difficult economic
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conditions we were already in, we saw walmart announcement. you want to focus more on the enterprise spend. more importantly, the mission- critical that cannot get cut off. it is so critical which is why i think the comment is really important from the cfo. >> what is the readthrough from alphabet? i am wondering what your general take is but more importantly what the readthrough may mean for meta- china said. >> the fact alphabet was able to grow search revenue up 13% year on year, youtube up 5% year on year, investors were bracing for a perspective for potentially negative growth. this is leveraged to advertise
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to growth. we will see what the conference call yields in terms of incremental color. you certainly have to be more positive but also be where. they are still facing significant headwinds with platform changes as well as conversations from tiktok. >> i asked what the readthrough from alphabet was. what is the readthrough from microsoft to others? >> maybe service now. maybe they saw something microsoft isn't seeing right now. it is encouraging to me that microsoft came out and said they are really not seeing a slowdown in that equation. that is good. understanding again, cloud growth is going. the fact their main core businesses are intact is encouraging. that is why you could probably get your arms around the
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forward evaluation. >> we are still awaiting guidance from a lot of these players in the conference call from microsoft gets underway in about 13 minutes time. more earnings movers. we bring in the after hours for chipotle and visa. our earnings lineup is standing by. is a 100 point basis hike even possible? stick around. more fast money is ahead. (cool guy) $30...that's awesome. (mom) it's their best unlimited price ever. (woman) for $30 a line, i'm switching now. (vo) the network you want. the price you love. only from verizon.
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we have got earnings alerts on more after our members. the stock is surging after adjusted earnings. we have a more on the report. >> you just set it. the revenue slightly lower than expected. that was a bit lower than expected. we are up 39 percent. digital sales are at 39% of its total revenue as far as beverage.
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on the call brian nichol continuing to tell the pricing power. we heard the same from mcdonald. the majority of customers do continue to spend. the company also testing the waters in europe with a handful of restaurant in the uk saying it is promising that europe could be another growth layer. tuna and for much more on all of this. let's trade chipotle. dare i say this was a burrito blowout. >> you have been dying to say this. i can't remember the last bad quarter. the stock had entreated particularly well.
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the margins are hanging in there. they are able to pass along. that is a really good sign to me. you say wait a second, they are trading in 30 times the number. we talk about it 32% or so eps growth. i think the stock is fairly valued. it has traded of that way. i think you stay with the name. you don't have to run out and buy it tomorrow. he wants to stay the course. >> consumers paying for price increase. that was also a key thing out of mcdonald's today. >> without the environment was bad for walmart and it would be good or bad for mcdonald's. mcdonald's said the lower income consumers is having some trouble. what they are more than making up for is through increases on the menu. of these numbers out of donald
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are fantastic. they are international comps and they are international. very strong numbers. when you think about that relative to chipotle, chipotle said of the higher income consumer is the bread and butter in the frequency is increasing. it is extraordinary when you think about it. it is good for cmg. it was not that far off the january low. it is one of the great stocks and of course this is fast money. that is worth mentioning. >> earnings after the share. now in the red, kate have got the latest. >> reporter: double digit growth in a few parts of the business. this came out on the call.
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strong recovery there. kelly highlighting strength. based on the numbers we haven't seen any evidence of a consumers pending the market deal. talk about inflation saying it is too early to draw. growth remains strong during inflationary periods although, long-term inflation not good for the consumer or overall economy. it comes after a strong economy. we are waiting for more on the call. we will bring you any highlights. >> karen, your take on visa? >> kate touched on it.
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it is such good business for them. that is a huge number. that was really important to strive to be here. it is important. the stock is that 29 times earning. it is kind of in the range but it is expensive, especially if you think they haven't really seen any kind of pull back yet. however, they are extraordinary at meeting every time. i certainly wouldn't bet against them. >> what is your take on visa? >> would you rather that you didn't ask? visa would be better than mastercard for me. when i look at a chart, visa has been in a declining trend for the last year. it looks like an ekg. if you see it on a chart, karen finished up saying they don't see any pull back yet. i think it is too early to see
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a pullback for the same type of thing we are seeing at microsoft. you are not seeing that pullback. i believe it will come. i believe there is a reason they have been in a declining trend. i would worry about operating expenses going up and revenue going down in the future as the recession, whether it is short, shallow, long and deep starts to take hold it wasn't just after hours earnings that caught our attention. let us take a look at other reports that have some big moves. first, we will see red on wall street as they await fed decisions tomorrow. what do investors want to hear? we will break that down next. we are back right after this.
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welcome back too fast money. the nasdaq leading the loss almost 2%. they are following about 1%. the drop gets ready to deliver a key decision on interest rates. one former official believes it will be very deliberate in the message tomorrow. dennis lockhart is a former president. he held the post during the height of the financial crisis enjoins us on fast money. dennis, it is great to have you with us. they make you think 75 basis points as a foregone conclusion. very chance of 100 basis points. what do you think the message will be in the press conference afterward? >> i think they will put the folks focus on inflation. it is a challenge we have not yet seen on deceleration. that will clearly come through. i think they are going to emphasize the commitment to tackling the inflation problem.
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>> dennis, you say they have very few tools. and limited toback is the phrase you used in the interview to fight inflation, particularly when there are so many issues going on around this environment, which are major factors the fed cannot control, particularly when it comes to russia's invasion of ukraine. i am wondering if you think there will be collateral damage. if they only have a hammer, for instance, and you need a phillips head screwdriver, they don't keep hammering away at the risk of damaging everything around it? >> i don't know that we call it damage but your basic point is well taken. they are taking full responsibility for the inflation problem in the economy. at the same time, the tolls are
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not adequate to be all of the root causes of inflation. the tendency would be to try harder or use your tools more aggressively in order to try and get the outcome you want. it could create a deeper or a longer slow down then desired. >> is that the risk you see happening? it seems like the fed is in a really tough spot. how is it in one area that the fed needs to try and slow down? are mortgage rates going to 6%, will that do it in an environment as prices remain elevated anyway? >> the longer elevated inflation readings persist, the greater the risk it seems to me. the next 2 or 3 meetings, the next 2 or 3 cycles in data, we will have 2 between now and the september reading. that will be very telling. the stubbornness of inflation could turn out to be a problem
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for the reasons you are ready turned out. they are that the causes of this inflation are not strictly speaking completely monitor in nature. >> i read a data point that the fed, on average, 8 months after they start hiking, they are cutting rates. i know that is not going to be in the realm of cerebral content that you need to base an answer off of. does that seem right to you if you want to whiteboard something? i know that is not the world we live in now.
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>> it is not the kind of playbook that the fed would like to use. i think what may very well happen is they get to a stopping point and they get to several months of basically rate on hold until they begin to cut. that scenario seems more desirable from a policymaking point of view. whether the data allows that is another question. >> do you think we will be in a recession by the end of the year? let me first say i think we have to start to defining the terms. we clearly are seeing an emerging slow down. is a recession is negative growth and higher unemployment, i think there is a chance that is going to be the situation. i think some amount is highly
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desired and intended. i think the soft landing is still conceivable. the longer we see these high inflation numbers, the greater risk something that is not intended. >> i started the interview by giving viewers the thinking terms of what they will do tomorrow. you think they will do 75 basis points. you think there is very chance of for 5%. do you think they should do 100 basis points? >> as you said, i need i think 75 is certain but i will put a nonzero probability on a meeting at the meeting decision to be more bold.
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i think that would happen only if the chair really wanted to lead the committee in that direction. we don't really have a good indication of what the thinking is at the moment. i don't think it is impossible they would do 100. friend ending the rise in the rate seems to make sense. they basically broke the membrane in the last meeting. the difference between 75 and 100 may not be all that serious of a break in precedent. i wouldn't totally roll it out. >> dennis, thank you for joining us. i hope to see you soon. >> thank you so much. >> guy, your take? >> you listen to the walmart call and you listen to what they said, it is a problem.
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it is to walmart and to everybody. they can sort of -- they can take their foot off the gas. they can say the reality is the data suggests they are a couple of years behind the curve in the have to go full speed ahead. if the markets show up on the back, that is the environment we find ourselves in. i don't see how they can say anything but inflation is still the problem we are facing. we will do everything we can to quell it. that requires us to continue to be fierce in our objective. i think by the end of the day you don't fight the fed when adding liquidity. don't fight it when taking it away. >> there is a notion that exist that they could be a pivot in the fed's approach. mr. lockhart seems to that is not in the cards anytime soon. you are actually pointing that out on a conference call. >> yeah, i think they are
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pressing and the fed will be softer in their term. they are going to go 75. i don't think the market likes what he just said, even though i think he is right. >> to got these huge moves. how xt play all of those stocks ne. what are the options market predicting? we will head for the trade. that is straight ahead. connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.
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welcome back to fast money. we have a traders choice on some of the stocks. we start off with gm dropping about 3 1/2% after they said supply-chain issues took a toll on the quarterly profits. ups also down as the lit delivery volumes came down. ge closed well in the green, thanks to strong demand in its jet engine units. then, there was shopify which reports tomorrow. shares dropped more than 14% ahead of the result after they said it would lay off 10% of the global workforce. which sparks your interest? karen?
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>> ups sparks my interest. i liked what they had to say. it is a fantastic job. they want to make more revenue per package. they have done a great job. it is a little bit of an embarrassment. they don't run as good as the ship, hopefully that will change. i liked with ups have to say. >> guy? >> everyone expects that will happen. they are trading less than five times revenue. if you have a huge buy-in day for the first time in a long time, shopify below 30 could be really interesting for a longside trade.
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>> it is well above where the street is. either someone is way off or on the street side. the most important thing, i think they have given an indication of peak supply disruption. they secured all of the ev supplies they need for batteries after 2025. i thought this was a good report. >> ge -- it has been trapped below its 50 day moving average since february of this year. larry has much work to do. you have to break this up. this will be an aviation focused company when he is done. we are not there yet. on adjusted earnings there was a loss. everyone got excited. it wasn't as bad as they
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thought it was going to be. i think there are much greener skies ahead for ge. >> coming up, meta stirring up the optis. onwe have details next. plus, we keep an eye on all of the big action on the move. the latest from the conference calls when fast money returns. or worse, that it was some way to take your home. it's just a loan designed for older homeowners and it's helped over a million americans. a reverse mortgage loan isn't some kind of trick to take your home. it's a loan, like any other. big difference is, how you pay it back. - find out how reverse mortgages really work with aag's free, no obligation, reverse mortgage guide. eliminate monthly mortgage payments, pay bills, medical costs, and more. call now and get your free info kit.
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the options market implying a move of about 11% after the reported earnings. that is higher than an 8.7% the company has averaged. most of that skewed by the most recent two quarters were if reported numbers that moved the stock vice 17% and 16% respectively. they weigh options traders try to take advantage of the elevated premium is with calendar percentage. traders sold 1500 of the july strike and bought the same amount on the august 160 strike
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request. we like to say you like your stock to go through your long strikes into your short strikes. this trader is betting the strike will drift shorter. >> karen, what do you think? >> well, i am long. i think it will go -- i hope it is reflective of things could have been worse. even if they miss, i would think the penalty should into be really severe. to me it is sort of asymmetric. >> i am looking at a chart. it is right at the pandemic low. i had to look at it twice at the chart. it really should be stacked with nothing but tailwinds. as we said before, meta doesn't
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know what it is. investors have no idea how to quantify it. they know there will be a lot of spend. when you start talking about multiples, you don't understand what the multiple should be, when there will be an egregious amount of money spent on the meta-verse when no one understands how you are going to make money from it. they have lost focus, investors have lost focus and that is why the stock has not top get. >> coming up, the lastte from the after hours names, alphabet, microsoft, and chipotle all on the move. don't go anywhere. fast money will be back.
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chipotle is still up 8%. karen, you had some thoughts here? >> they did have some interesting commentary. they were able to raise prices. they raised it on avocado, dairy, tortilla and packaging pricing going up. they also cited some of the newer employees were not so proficient as they could have been at making doritos. they hope they will get out of the learning curve. they do an extraordinary job. this is also 43 and change tomorrow. it has been too expensive for a long time and that has been the wrong move. >> guy, did you work at chipotle? i don't think you did. >> i did not. if you recall after i went to shake shack, that stock exploded. maybe they're good people
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should invite me for the day. i am sure my learning curve in terms of making doritos is great. i would be one of those that my burrito would be way too thick. it would be a mess. >> guy would go to work for chipotle and he would explode. >> [ laughter ] well. >> it is a family show. >> visa is out and after our session low. >> be concern around the spend is still there. the cross-border dynamics are issues that affect visa. we have not seen of the consumer, under the kind of pressure with we would hear. in some sense you expected a bit of relief. there is nothing in those trends, it lets you go out and buy that stock. >> which after hours movers peak your interest at this point? >> i think you're going to get a push when you look at the large-cap space, you really
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have to analyze what percentage of revenue are these companies deriving from. when you look at how amazon is thrown into the mix, where once again, they have a fraction of their earnings and they are coming from advertising and they sell off between 7% and 9%, you have to reassess and look for trades in the marketplace and then take the trades when the market gives it to you. i would look at the rest of the weekend amazon in particular. >> amazon is interesting. we flagged the move lower on the after our of walmart results. how is it looking to you? >> the setup should be okay. it surprises to the downside.
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with amazon you flip a coin and as carter worth would say, i would rather stay with see what they say and traded. they are not seeing a slowdown. they are forced to spend on things. i take that one with a grain of salt. the valuation has been rich and continues to be. the trend has been lower. it has been faced it has been a lower high and lower low. we have it close about 215 for the upside. >> we are getting these headlines from the visa conference call. the cfo saying frtquteouh-arr net revenues could grow at the high teens to 20% range. high teens to 20% range. up next, we have your final trade.
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orange blazer when i am a yankees fan. >> i like that one too. my final trade is thank god, that could have been so much worse. google, if i earned none, i would buy it right here. my mission is simple. to make you money. i'm here to the credit field for all. mad money starts now. hey, i am cramer. welcome to mad money. i'm doing my thing, i'm just trying to make more money. call me, 1-800-743-cnbc or tweet me @jimcramer . i'veee
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