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tv   Fast Money  CNBC  September 12, 2022 5:00pm-6:00pm EDT

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valuations, being much more reasonable as you say. is that basically the case, in ten seconds? >> yes high increment at markets, people still have job i think they're going to grow very well. >> all right jeremy, we appreciate it thank you very much. >> thank you. that does it for "overtime." "fast money" begins right now. right now on "fast," count jo unto cpi. we'll break down what happens if the number is too hot, too cold or just right. plus car vana raises higher. the analyst believes the stock could double, but hole on. one of the our traders is saying the market is telling a very different story. disney makes peace with a big-time activist investor i'm melissa lee. tim seymour, courtney garcia,
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guy adami and -- economists expecting a shatter slowdown in inflation as energy prices continue to dumb down. prices overall expected to decline, but take a lookic at this shares of apple surging nearly 4% today now, think about this. ahead of a key piece of data, the biggest company in the united states, a company deeply impacted by supply chain snarls, it makes a move higher does the rise today signal to investors that the markets have accepted that the fed is going to do the rest of the year, and are they okay with it? tim, if you're not too busy taking a call. >> somebody always wants something. steve is in trouble for that one, and i'm in trouble, as i should be. first of all i think the release of the iphone, data says they're ahead of where they were -- i was pointing out that the
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underperformance to the market might be a change in character, and watch out for that it had underperformed by 3% or 4% i'm just shocked that people now believe that tomorrow's cpi number, which we've been talking about for a week will probably show the headline is significantly better gas is down 90 straight days, but the fact the core will remain sticking with this labor market, i think we were so oversold the day last week when powello tuesday of last week reiterated this commitment to higher rates for longer and were up almost 6% on the s&p from the intraday low. that's a massive move. i just find is interesting that everybody is saying, okay, inflation, the worst is in the rear-view mirror, it's a tailwind, and we're back to this sense that the fed is not going to stick to where they are there's no pivot coming.
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and on a relative basis, but, again, i don't think that's the answer. >> maybe the new pivot is the fed sticking to the new course, and it certainly feels like the market is accepting the fact we're going to go 75 or 50 medium, and maybe 50 or 25 after that, in some sort of variation. people are okay with that. should they be >> the fed, if we were talking last we're, everyone knew inflation was coming, and everyone word about it where it's going to take more data than is out there right now to change their tune they may be behind the eight ball again i think that's what ultimately people are seeing right now. even things thik consumer expectations in inflation is coming down, which i think is interesting, because that's one of the points that the fed noted several months ago that they need to see that come down will that make them pivot in the
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next two weeks likely not but there are signs. >> price stability, that's what the fed wants to achieve it looks like it's actually happening, so is apple really -- when you're looking at the market and thinking which direction will the market go, is apple telling us something at this point >> tim says it all the time. apple becomes a defensive play for people that's just a reality. we maid that 129 low, 172-ish high, so the down wherever we bottomed out makes sense i thought we would print 150, but we didn't. this move, i guess, makes sense. you know, it's funny you say price stability. i know you do it just to wind me up, and you're successful again, but the bond market continues to trade biotech stocks i'm with tim that 9.1 number we saw a couple
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months ago, hopefully, it might be peaked, but i've said another time, the others are pesky and persistent to say. >> you can be in the camp, though, where you think the fed doesn't necessarily have things under control, where markets have the leeway to go higher, karen. maybe that's where investors think we are sort of generally, where we know what the fed's path is, and we can have this interest rate backdrop consumers are feeling better about inflation, so maybe into seasonality, we can lift >> it's possible anything is possible the good thing is the market really believes 9 fed will tighten a lot. so that's sort of one uncertainty that isn't there
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right now. i think the thing -- the path for a long time will be tightened. there's no way you get one cool number and they say, okay, that's great, we're good to ease up i don't think that's happening at all, but the market expect that, so that is good. we're about three, four weeks away from getting earnings again. we have a couple tonight we'll touch on, but i think that will start to matter, whether people are weathering this supply chain issues, i think they're easing, that's good, but i think we're going to go back again to fundamentals it seems like from the companies we have heard that have quarter that is don't report in july, for example, for the second quarter, they report a little later, they've been talking about things picking up during this third quarter that we're near finishesing, so i think that's a positive. until we have clarity from earnings, the market could go either way, maybe some
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excitement about ukraine's conflict is going a little better ukraine is shipping more grain i don't know, maybe that's part of what's keeping this rally afloat >> well, at least what's interesting, karen, i think you have a case where the market is pricing at higher rates and okay with it now. today we got to a fresh high on the two-year note. the ten- -- the curve was a bit steep earp we actually kicked over 4% on april. right now the highest point in the futures out in april were about 4.1, 4.2, first time over 4% so i agree earnings are the next measuring stick. setting up into third quarter earnings, the bar is actually higher than going into the second, in terms of expectations i think we were all mettently surprised. i think we pushed out a lot of demand pushback.
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we heard about inflation, heard about the dollar, by the way weaks over the last couple days, and outperforming our markets over here, again, as their central bank becomes more involved 220 on s&p earnings next year, we play this game all the time what multiple do you want to put in a world where the historical average, not during a crisis, not during inflation is 15.8 you know, that's not terribly exciting -- it's actually quite depressing where this could go in terms of the s&p. >> they're saying the bar has been lowered and analysts have been cutting earnings growth estimates by 5.5% so far, which is the biggest drop in a series of data, so maybe this is actually good, in that, you know, what analysts are expecting is sort of coming down the gap is converging in terms of the expectations of what companies can deliver. >> i saw the same note
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i think it's hopefully going to be one of the things where we lower the bar. we haven't seen that i think tim brings up a good point. we thought this quarter is when it would happen. if that continues to happen, it puts us in a good position going into the new year. so, guy, do things line up. >> hi. >> you're going to be gone for a while. i'm going to miss that, do we line up well for a seasonal bounce putting aid sigh your feelings about the fed, your believe that the fed has completely lost control of the situation, et cetera, et cetera, putting that all aside. >> do you pay your electric bills, by any chance i know you do, because you pay them ahead of time why do i mention that? what made an all-time i'd.
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con edison xlu made an all-time high today. explain that one to me that, to me, does not suggest -- i don't know, it feels funny when you have -- that's a bit of a warning sign, one. guess what else was higher today? i know you know the answer to this the vix was higher again, just something to keep in mint. what the market is say, what bitcoin is saying, the fed will pause, pivot, whatever, and we want to front-run that i just think that's misguided, in my opinion. >> credit suisse is forecasting that inflation will collapse within the next few months great to speak with you. >> good to see you just on a mathematical basis, once wen start laughing and easier comparisons, it will look
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better is that what you mean? >> well, it's even more than that if you look at the trips break evens, they're predicting that we have sub-2% cpi at this time next year. economy economists are forecasting something more like 2.25 by the end of next year this isn't a credit suisse call. if you look at it in pieces, because calculating cpi is a mechanical exercise. you know, goods prices -- goods inflation peaked in march. they've been falling for six months in and out. oil prices, every time we go to the gas station, the price is down, oil is down. we seal it even with food. so, you know, it really is showing up in the data already that's a really big potential
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positive. >> jonathan, it's tim. getting back to calculations and data, and we messed around about the s&p and what multiples it trades at. you don't need to necessarily tell me the multiple, but should it be trading lower than the historical average i'm kind of pinning you in we talk about the short end of the curve. we're going to be over 4% on fed funds where we haven't been in forever, to the calculation of rates in your model, the analyst model, now necessarily yours, talk to us about where we should be relative to history >> you're racing a great point the whole issue on valuations is really about the discount rate, and it's not what fed funds are, what a ten-year bond yield is, but what is the cost of corporate borrowing. even though rates are up a lot, the cost of corporate borrows is still pretty reasonable. there's really two parts of
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that the first thing is that the underlion ten-year bond yield, it's up in the last six months to a year, but if you compare this to the last 40 30 or 40 years, looking at historical valuations, you know, when you started out in the business, where was the ten-year bond, 8% or something like that so i think the valuations on the market are somewhere between fair and inexpensive right now, meaning that there's more up side from p.e. multiples. >> i really like your optimism here when it comes to cpi coming down, but i am curious we're seeing inflation coming down, but at a certain point in time, there needs to be more data to back away, so what is the catalyst going to be before they're able to get there?
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>> that's one of the real challenges i think this is the greate divide between forecasted inflation one year in the future, and current inflation. even with the cpi report coming out tomorrow, expectations are that it's more than 8% if you would have told any of us a year or two ago we would have 8% inflation, we wouldn't believe it so the fed is not going to simply look at forecast inflation, saying i'm down, you know, they're going to need to see confirmation, but the market believes come the first quarter, if we continue on this glide path, they're going to start to either pause on you snag they might paul if they do that, the stock market wants to move ahead of it, the stock market will really take off. >> jonathan, thanks for your
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thoughts thanks for joining us. >> thank you on a relative basis, a historical basis, it's still cheap to access is the capital markets, but if you really need the money, it's the difference in expense can immediate a lot where growth is not as easy as during the zero interest rate sort of environment. sew maybe there's a bifurcated market, then with rates somewhat higher, which they are, but credit markets are a little less secure than they were it's a bold call by him, i kind of like going out on the limb, but i'm more in the account of keep being hawkish so i think that's going to be a while from now the question is how far of a forward-looking mechanism is the market
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if he's right, in six months they're neutral, then i think the market will go higher. shares of peloton gives up after announcement of a leadership change. and president biden launching another step in his cancer moonshot initiative which companies could benefit? we have the details straight ahead. don't go awhe.nyer "fast money" is back in two. welcome to life in the new open web. where innovation keeps pace with imagination and the future arrives daily. viant is pioneering a new approach to media combining ai with human insight. creating new ways to reach customers and new standards of measurement, both on and offline. viant. built for the new open web. built for now. ♪♪
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welcome back to "fast money. shares of peloton dropping after announcing a change in leadership john foley gave up the ceo spot in company, it jumped during the reg hear trading sen, let's bring in simeon siegle on the fast line. what do you think is said about mccarthy's progress in turning the company around, if anything?
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i think -- i think at the end of the day this makes sense to his credit, john foley created a fantastic community. >> do you read anything into his departure that could mean the company is up for sale, or do you think mccarthy has more work to do, it won't be saleable. >> this is a business that is not -- as disrupted or in trouble as make we all talk about. i think he at least been vocal about the fact he has no intention to selling i we haven't heard from john foley in a long time
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we've been hearing a lot from barry mccarthy, so where we sit, this seems like a normal progression of movt movement they neap to decide do they want to be bigger, which means more expensive or the same size and be profitable. >> do they really have the option do they have those options in front of them. to get bigger, don't they have to sell themselves >> i think they were internal ice. churn is going up. if they focus on -- they may not be able to add members really much further than where we are we have to ask, what is the cost of a new member.
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it's also the markets that goes round with it. you -- i think i'm more in the could camp that it's a defensive rating do you have a sell rating? >> we have an underperform. thanks for phoning we do appreciate it. >> you bet guy, what do you think of peloton here >> eddie marks could be ceo with greg la monday and it will go lower. you can google that in a commercial break this move tells you all you need to know. so i don't think we have seen the bottom yet. >> i know there's several peloton fans on this panel, but putting that aside, if they're-looking -- what is it, $40 a month at this point? >> yeah, i agree it's a big spend when we talk about the streaming
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services, you know, for viewing, people are thinking, what can i cut? one thing about churn. simeon mentions ticking up, but the number of ride per user was going down so that's a forerunner of churn. as people use it less as a bike, or, as they say, a hanger? >> that would been the huge tenant that people were so engaged, and the engagement is waning if you're down to one ride a week. >> you're not that engaged >> i'm not speaking from person -- no, actually i am. you may decide to cut the cord on that. >> the reality is when you have other options, we have a lot of other options. the flip side is watching some of the gyms start to raise their prices again.
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>> we have an earnings on oracle frank holland has been listening in on the call what's the latest? >> shares rising during the call as oracle laid out some optimistic guidance, and forecast for cloud growth, but for this quarter, currency impact is certainly the story as the eps miss you have to remember, the dollar gained almost 7% the ceo said that eps's added by eight cents, and they minced by four cents >> services and short-term -- also 20, acquisition are included
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the best. >> frank, holland, thank you oracle, it's not expensive, courtney, does that mean you want to own it >> it's not that expensive, they have about $56 billion net debt. so not something i'm going to jump in with two feet. >> stephanie link on v.o.t. last out, guy, she was saying there are a lot of other better optioning than an oracle
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this is the first time ever that ed eddie mercks was mentioned cerner not fully integrated, which would mean think get a higher multipap. >> they already had guided, they're going we had board that. that's a big deal for them when you're looking anyone vin, even with a big debt load, this is the.
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which competes will feel the love plus, reaching car vana analysts enlighten on the stock. that's sending clouds to the stars. we'll meditate on that next. we're back right after this. it takes a village to support society
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this is the biotech etf, it's gained 16% over the last three months for more on what this could mean for the space, jared holtz, always good to do you. >> you too, thank you. >> when you heard the announcement, what it's supposed to boost, this initiative, which stocks did you think of immediately? >> just giving that i production, some of the things the initiative looks to kind of meet, at least initially so tmo, danaher, agilent, that group of kind of stocks, i thought probably would be the once investors would look to first, maybe secondarilyyily pha
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and biotech. >> just wondering, if they're manufacturing or their facilities are overseas, this could be inflationary for them, so it costs them ultimately. >> right i think what the administration is trying to do is trying to bring some of the business back to the u.s the majority is based here f pharma has a big presence internationally, but i think he's trying to bring jobs back, obviously, and just trying to meet some of the demand that's here there's a lot of personnel that probably can benefit from more of the work being done in the u.s. we'll see, but it's very unclear right now, from the plan we have seen, whether this will be a one-time tax grand, or the money, how it's been earmarked is not very clear as of yet. >> big picture, a big week last
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week for regeneron in their ilea drug, and the cash flour generation coming out of the sector and the balance sheets across some of the biggest cap, so do you like those companies here at times people have been concerned that a lot of these companies are one bad acquisition, and in fact they have pushed back on them it seems like they companies in this environment are really best of breed it was a very nice move on the back of the data last week the entire category has felt better they both, you know, had a pretty good two to three-month run after going below the depths we thought would even be possible at the beginning of the year, when you pair up regeneron and some of the other data, you've had some pretty high-profile clinical data sets
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that have lined up pretty well i think in totality that's been a major booth for the space, and what investors are relying on. >> jared, good to see you. thanks. >> thank you. jared holz courtney, do you like biotech? >> i do. they have good pricing power i think these are the exact kind of companies you want to be in. >> guy >> amgen got walked today about the plaque psoriasis drug, but i think it's too much. i think they will rue the day they did that, tim with regeneron, that went up, pulled back a bit, but it stick outs on valuation. >> i like it, but the market has had a big move there
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back to gilead, some of these cases were building in the cancer drugs are very exciting, and i think people are just worried about the cash piles here, but those are the things you should by chasing. coming up, smells like team spirit -- wait, we're talking c c carvana. what is brewing up in options like the decaf details when "fast money" returns (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing!
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welcome back to "fast money," carvana attacking the tape, surging after piper sandler still says it's grossly undervalued and deserving an upgrade. he added the stock could double if here. it's down 80-plus percent this year karen, i know you read the note, but you're also looking at a
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chart of one of the tranching. w >> thinki a i >> thinkt's a 16% yield to matu. not 16% overall, but 16% every year this is a junk rated piece of paper. that's telling you there's some real concern about the business. just one other quirky then of now. they do have some 10.25% debt that trades higher the reason it trades higher, they have to take that paper out. it's way too expensive, twice as much as any of their other debt. one other thing. there's a giant short interest here i wouldn't be short this thing, but i also wouldn't be surprised -- i wouldn't be short, because, who knows in the squeeze, i don't want to get involved in that, but to me it's
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a bold call. he provides you all tools tos how he tankered with the model they hain on to market share and the user car markets hangs in there. the weighted cost to capital, that's high, but i think it could be higher, meaning a lower target rate. but it's an interesting call bold >> i thought it was bold for the analyst to come out with the projection to 2035 in what it needs to hit i mean, 2025 seems a long way out of 2035, well, is ten years longer, but 8% is the number it has to hit. guy, he runs through the different scenarios, and investors should over some car vana what do you say? >> i'll z a iraqer in 2035, if
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i'm lucky. i took math one day in college if this stock were to go to 80 from here, that's effectively double it still would be down 77% from the all-time high it made last year we've seen things like that happen in the market i sort of dig this call. i think it has issues, and this move to the down side us that. to a certain extent, it's just a financing company, but i sort of like the call. tect get those levels and still be a stressed stock. >> you're down 4% in august, but down 11% from the highs. if you read some of necessary insider newsletters, someone mentioned like a vortex downward in terms of what's going on, but where they could eventually go to that to me is the dynamic that burned think cash in 2022, which was their best year ever
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they're not going to grow like this next year in fact, if you look at growth projected, with possibly the headwinds of a falling market, just doesn't do it, and to me, with that kind of a debt load, that's exactly where karen is seeing the bonds and what they're doing. >> yeah, i think the fact you had a note like this where they have to first prepass this, we know rates are up. we know there's a real possibility of bankruptcy, but it could still go higher yes, maybe in the short terms, but the point is we could see it happen, but on the fundamentals, unless you're doing this as a trade, it's so far down, such a low bar, but yeah, i wouldn't touch it. >> if you extrapolate this vortex of pricing to the new car market, because oftentimes they are linked, what does that tell you about gm or ford >> it's not great for them, for
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sure maybe they'll get boosts from tax credits, but it's not great. they high ticket priced cars are the high of margin items, and we hate to see compression there. the stock finally got over 40, which was night. coming up, calling all starbucks lovers, the investor day tomorrow can the new ceo deliver? we'll grind into the options pits for that trade. plus it's been a disastrous years for disney, but an activist investor turning into prince charming over the weekend. will it turn it around more "fast money" in two esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions.
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it's dr. scholl's time. our custom fit orthotics use foot mapping technology to give you personalized support, for all-day pain relief. find your relief in store or online. shares of starbucks flat ahead of tomorrow's investor day, but with a new ceo, investors are betting that things are about to perk up. >> oh, c'mon mike >> three times the day her call volume, most of it was in the
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october calls. over 21 thousands. but i will make this point starbucks has typically outperformed the s&p airing investor days. it has outperformed the s&p by an average of about 1% >> tim, your shoulder, what do you think? >> the outlook they'll give investor days is critical. the last couple, they have outlined a long-term revenue tart, the same-story sales, they're actually extraordinary, but the top line is not really the issue. as a shoulder and long-term shareholder, i am word about margins and labor costs i think
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ultimately their building that pricing power has been the keep. i just said to mel, i am incredulous. i believed i paid $4 for a drip coffee i'm the last person -- i guess i'm late >> i don't know if you take that as they do have pricing power, because you still paid effectively what sounds like price gouging for me for drip coffee, or if you think they're running to the end of it they might not be able to keep up with it in terms of prices. guy? i guess there's twos tim's willingness to pace $4.30 for drip coffee and then -- >> tim helps the local economy i'm with him i wouldn't be doing it, as you know, but listen, it's not my thing. i'll say this, at 27 times, it's
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probably cheap historically to where it does trade, and the whole reinvention thing. indicate rogers has been on this story for a while. they're doing something effectively the metaverse, i guess. the digit at coins, and all that nonsense i don't understand. i think this stock probably can trade to the mid to upper 90s. >> can you imagine going to the metaverse and verse a virtual coffee i don't understand the joy of that i certainly wouldn't pay for it. mike khouw, thank you. coming up, one activist investor calling for a time-out. what he now says espn should remain on disney's team. that pivot and play is next.
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welcome back here's a sneak peek at the cramer cam he's speaking with the ceo of expedia on a special "mad money" from the seattle space needle. let's talk disney. dan lobe doing an about-face
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let's get to julia boorstin for more on the story. >> well, melissa, this is a win for disney's ceo bob chapek. he seems to be get dan loeb on board. this is a rejection of loeb's call to spin off espn, part of a series of requests he made after he disclosed a $1 billion stake in the company in august he responded, tweet ago link to chapek's comments. he said we have a better understanding of the stand-alone business and another vertical for disney to reach a -- we look forward to see mr. pataro, espn's president, execute on the growth now to the proposal that they accelerate the timetable for the remaining stake in hulu from
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comcast, chapek say it's possible and they are considering folding hulu more into disney plus of course, it all comes as to launch much more movie-themed attraction and extend pixar beyond just movies mel melissa, cheeker is at d-23, feeling bullish and confident. >> julia boorstin, thank you gwhat do you think of the plan >> i would hold on to disney espn, people say it's still an anchor i think espn could actually be a driver going forward, just in terms of where the world is going, with gaming and gambling, all those different things i'm glad they're able to keep that underneath the umbrella, and at 21 times-ish next year's
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numbers, i think disney is probably historically at a cheap level. tim, as a shoulder, what do you think about the supports rights >> well, i think this is an environment where we don't know what the leagues will be able to push through there are an unbelievably -- i would just say the biggest competitors in the media will be going after this we see this with amazon, apple, coming into the same turf that youths to be espns and disneys alone. i agree with guy, the ability to actually have disney use espn as a way to sell these packages that will include hulu, and a package very tough not to have, whether you cut the cord or not. >> there's a lot of subscribers are also getting that, so they're going to start to get hooked i think in the streaming wars,
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versus your espn is helpful for disney i do like their valuations i think they're continuing to show their strength, whether it's with streaming, parks, you know, moving forward here. i think it's a good thing to have. >> karen, what do you think of the valuation? >> i think it's sort of okay i know guy talks about it does that seem like a super-rich valuation, but if we back out the libyan tv, that will be a much lower number, mean the rest of it is much higher, and for the streaming part, obviously valuations on those across the board have come in a lot, so i think the valuation is kind of high. this is your lathes night on the show, so i will simply ask
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you this question, by the way, we started here on "fast money," 5:00 even night. you would have set netflix, though historically my answer would be netflix, playing the game correctly, disney, mels do not miss david faber's exclusive interview this thursday up next, final trades. ♪♪ ♪♪
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final trade, guy >> nio, sister. >> karen >> yeah, i liked moynihan's comments at the barclays global comments, so bank of america guy, have a great vacation you will be missed. >> courtney? >> disney, i think it's a great
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play. >> tim >> how about those g-men yesterday, mels. to me, merck. >> the g-men. >> giants, my mission is simple to make you money. i'm here to level the playing fieldinvestors there's always a bull market somewhere and i'm here to help you find it. ""mad money"" starts now. hey, i'm cramer. welcome to a special seattle edition of "mad money. coming at you from the iconic space needle in the heart of emerald city i'm trying to make you money my job is not just to entertain but educate and teach you so-call me at 800-743-cnbc or tweet me co

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