tv Fast Money CNBC March 21, 2023 5:00pm-6:00pm EDT
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have cuts and dramatic cuts, though, which is also being priced into the bond market, definitely seems a little -- that's a little scary, right? that would be bad news becoming bad news. that would mean we are really facing down the gauntlet of a nasty recession, potentially, for the fed to move in that direction. >> and the language powell uses about the state of the banks. >> all right. that's going to do it for us. >> "fast money" begins right now. right now on "fast," powell on the clock. the big decision weighing on the fed chief. will he or won't he? we'll debate straight ahead. plus, time ticking for tiktokti. appealing to 150 million u.s. users ahead of his testimony on capitol hill. and later, an electric surge for the ev makers. inside the a.i. day. and a spike in house sales. i'm melissa lee, this is "fast
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money," we're live at the nasdaq market site. a full desk tonight. and we start off with the countdown to what could be the most important fed meeting of the year. i know we've called the last one, but this one is really the most important. markets rally ahead of tomorrow's decision with the nasdaq leading the gains up 1.6%. the s and p climbing back into positive territory for the month with energy discretionary gains posting the biggest gains. and the bank stocks, regionals and the money centers seeing the best day since january 2021. yields rocketing higher. the two-year jumping nearly 25 basis points, as expectations of the fed will, in fact, raise rates tomorrow rise. a quarter point hike would bring the target rate to its highest since 2007. >> markets ready for what we'll hear tomorrow. you know what is amazing about the levels? it's like a banking crisis never
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happened. >> never happened. here we are, 4,000 in the s&p, 3940ish. mike wilson a couple weeks ago, that tactical bull call was because we held the 200 day and bounced from it. all these different things happened, yet we're right back to where we started from, and that's fascinating to me. as much as you think the bank problems are over, i don't necessarily think they are. so, getting back to the fed conversation, what could they possibly say tomorrow? i think they have to do something, something in the form of 25. if they do nothing, as much as people would like to think that'sbullish, if they are scared, they being the fed, then you should be scared, as well. >> or maybe nothing would be viewed as off to the races? i mean, we are in this place where we recouped all the losses from this bank meltdown in terms of the s&p 500 and we've lowered the rate by a full percentage point. i mean -- maybe this was a sweet spot, michael? >> well, i think the market would be misguided if that's the
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opinion that they go with, if the felt pauses. if they pause, it's for bad reasons. it's because they expect some sort of financial instability and that's not good for risk assets, it's not good for credit. and the fed is backward looking. and they had 800,000 jobs in the last two months created. there is no chance that if you created 800,000 jobs and you doubt hike, that you're not signaling to the market that things are very, very bad. and that, to me, would be absolutely wrong read, if they don't go tomorrow. >> yeah, i tend to agree. you look at the two situations, focused on monetary policy, you have to look at economic outlook and to michael's point, if they were to pivot, after they have been so resolute in saying that inflation is the tier one risk that we are primarily focused on, for them to completely change course would be a change of tune. and i would be extremely concerned. and, you know, the last thing i'll say is, kind of looking forward at fed funds futures, it
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doesn't make sense that you see the terminal rate coming off. even if they were to say some language that is perceived as dubbish, the fact that they are likely to keep things where they are, the pause is what i think is being overlooked. >> what is this rally all about? >> you're asking this guy? >> yes. >> you're asking this guy, who has been short? well, i said on friday, i thought that -- i said on friday i thought the nasdaq was probably the fattest pitch out there, on the short side yesterday. we had a healthy discussion about the banks. i still think they are a short on rallies. i'm in guy's camp. if you think that the stock market, or, if you believe that the stock market is a discounting mechanism, it is not discounting the much higher likelihood of recession in 2023 right now. i mean, it's just not. and that was a large part of the rally that we saw in the s&p and the nasdaq in january that we were supposed to have this very soft landing, or maybe a no landing, i think everything that's going on here increases the odds of a difficult economic outlook, or, you know, at some
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point in mid to later this year, and listen, you know, we got it at 21 here. you look at the charts, and i'll just tell you this, if you take the macro out of it, you look at the nasdaq 100 chart, it looks great. the technical setup does look really nice. look at how some of the megacap tech stocks acted today. that's after they already outperformed massively last week. so, again, i'm wrong right now. i don't think i'm wrong on the banks. maybe pressing them yesterday in the way in which i was talking a them maybe didn't feel great, but don't forget this, people. first republic got cut in half yesterday, like, literally cut in half, right? and there was other funky stuff going on with the financial names. this is the playbook, though, back to 2008. i'm not saying it's 2008. the volatility that we saw day-to-day, investor sentiment can shift on a dime like that. i'm going to say convicted here, i'm going to be cognizant of the fact that tech does have some motes that the other parts of the market don't have. >> that's what we haven't seen
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shift, at least since this banking crisis began last week, and that is the pouring into technology, the notion that -- we're up more than 5% since this whole crisis began. >> right. >> and -- and, guy, this is your game. you take a look at the chart -- >> right. he likes it. >> what would you say? >> you are 100% right. you are inside my head, because dan teed that up and you are in my head and the whole thing is happening on this thursday night, which is fantastic, by the way, but if you look at the chart, didn't know what it was. some of these charts look fantastic. and you have to say, maybe the nasdaq, which actually held the 200-day moving average, we never traded through it, that does look great. but then ask yourself this -- think about what's going on with the banks. 73% of this economy is driven by people buying things. people buy things typically on credit. credit conditions are going to tighten. you know, you hear the politicians say that the u.s. taxpayer is not paying for this -- yeah, i get it, but guess what? they are paying for it, because the banks are going to put all
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those fees on the back of you. credit conditions will tighten. almost by definition that means earnings come down. and why should we be paying a premium? >> last year, you had the liquidity bubble popping. and now this ises sort of this misperception that liquidity is going to loosen this year. the reality is, the fed is still engaged in quantitative tightening. a year ago, they were in easing at this point. the 450 basis points of hikes that you had last year from the fed, those are taking hold today. i don't want to sit here and say that svb was because of the one-year anniversary of fed hikes, but it seems a little coincidental that we've heard about the lags and variable effects of tightening monetary policy and then what happens, inverted yield curve and banks start to fail. this is what is going to happen consistently now over time because of the tight financial conditions and to guy's point,
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credit conditions in particular. and those only getting tighter. they are not loosening. >> yeah, what was interesting out of the bank of america fund manager survey today, 31% of those polled see a -- their number one concern is no longer inflation, it's a systemic credit risk. >> yeah, i mean, we talked about the nasdaq 100, you talked about the chart, taking the name off of it and looking at it. i agree it paints one particularly bullish picture, but if you look at the performance of the overall index and overlay that was the outperformance that we've gotten from semis, from tech, i think that shows that there's something bubbling underneath the surface. when you look at the market caps of those nasdaq 100 companies, you would expect that, you know, the s&p would be trending much higher, given the performance that they're contributing to that overall index. and the fact that since we've been range trading with that outperformance, to me, shows there's something under the surface that's not so positive. >> that's a great point. and just look at the russell 2,000, you look at small caps, it is down 11% from the highs it was making in early february.
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if you think that is going to be one of the parts of the economy, small cap, that have a harder time accessing credit to larger caps -- >> rallying in the past couple days. >> well, rallying, but it was trading at 2,000 at the start of february and here it is just below 1,800. so, when you think about the underperformance it's had, fine, it's had a little bounce here, and i'll just make one other point. you mentioned what the two-year is doing. this volatility, and guy has been saying this for months and months, this volatility is not helping the bank situation. at all. it gives less kwlarty. part of the discussion we had about karen, go back to '08 and '09. the 10ks were e femme roll, people. it was a snapshot. when you have risks moving around at a pace in which we've never seen before and it's intertwined with the company and the way things are moving, it was sper play by central banks,
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by federal regultors -- we have no idea. that's my point. i still think there's a lot of uncertainty here. the valuations don't make a lot of sense. let's look under the hood. >> market to market is very difficult in this environment. >> no question. >> and then just on top of all of that, you know, today i saw a lot of people talking about how semis are no longer cyclical. i mean, i've heard -- no, but i'm telling you, that's getting out there in the ether now. i would sort of talk about dan east -- i don't know how to spell that. but when you start hearing people talk about stocks no longer being cyclical, those types of things, that to me is a bit of a warning sign, as well. let's bring in rick santelli. nice to see you. we were talking about the extraordinary volatility, particularly in the two-year? >> yeah, it is really remarkable. last week in the two-year, you
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were off 70 basis points plus. let's look at a couple of weeks at two-year. you see the chart there, we've come from above 5%, and here we sit. and today, look at the right side of that graph. it just looks like a little nib. but we are up 20 basis points today. yes. liquidity is an issue, but i have to tell you, it might take a lot of 30 seconds to move a big order, but they're getting filled. it just covers a lot of ground to get the order filled. and if you look at what's going on overseas, that's boons versus tens. you can see whether it's yield, boons, we're all basically trading the same formation. and all the long data treasuries are below their extremes from last fall. and that, to me, is -- and i've said it a thousand times, i'll say it a thousand times more, that is important to pay attention to. i don't care how good the charts look now, the inverted curve, the way tens are acting, boons are acting, with those hot central banks means that the markets are looking for a slowing.
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end of story. if you look at june fed fund futures, certainly it's still pricing in 25 for tomorrow, but it's well off its lows. the terminal rate has come up quite a bit. and that contract was at 94.52 a week and a half ago. it's at 95.07 now. we've covered a lot of ground. and finally, if you open that chart up on june fed funds, year to date, we've changed the structure of the fed fund's contract, though it is pricing in 25. do i believe we're going to have all the eases on the back end? maybe. but let's face it, the market could move, and it's going to, trust me. back to you. >> rick, i thought one of the mandates of the federal reserve was stable prices. i don't know, i read that in one of those books. as i've said 100 times, the u.s. bond -- correct me if i'm wrong, still the largest economy in the world, that's correct, right? i didn't lose something
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somewhere? the u.s. bond market should be the most liquid asset in the history of man kind and it trades like 135 million bio tech stock. i mean, it's broken. so, my question to you is, at what point, if any, does the volatility we're seeing in the bond market, which, by the way, is unprecedented, manifest in the equity market? >> i think it's going to do that ultimately before we moves towards a recessionary move, and i do think the recessionary move is coming, but just consider the breadth of last week's two-year drop, and how it's going to look if we are starting to move into recession. to see the two-year and the curve less inverted, because all rates come down. that's where the transmission is, in my opinion, and that's where we'll see some of the most volatile, when the market truly senses a, the fed's done, and b, well, b, inflation may be slain,
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but it certainly is going to bring back the u.s. economy. >> rick, thank you. rick santelli. our next guest, rebecca patterson. she's here on-set, of course, she's been in the "fast money" family for a very long time. welcome back. >> great to be here. >> what is the market mispricing at this point? the fact that we're rallying into this fed meeting? >> i think the whole desk, you covered it really well, already, and rick did, as well. tomorrow, who knows? we can make educated guesses, do they go 25, do they pause, but the bigger deal, the big issue is the rate cuts getting priced in next year. and in 1987 and 1998, we saw that sort of quick pivot to easing, but back then, the fed didn't have the toolkit it has today, it didn't have the inflation problem it has today. so, for the market to be right on rates and the fed to pivot that fast, i think you all said
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it really well. we're going to have to see a lot more financial instability, which obviously is bad for stocks, or the economy is going to have to slow so quickly that it brings inflation down close or below target in months, which, i mean, given that core cpi is 5%, wages are growing 6%, it's going to be really bad for earnings. i don't see a scenario where rates are right and equities are right. >> once upon a time, and i think this is, like, two times ago, when the markets were pricing in a cut at the end of the year and this is before they bumped it to next year and then bumped it back to next year, he actually guided and said, i don't see that happening in the back of the year. and i wonder, is he going to actually try to manage that market expectation now? i mean, that would be an interesting market reaction to see. >> yeah, i mean, there's going to be the interday trading that we get tomorrow and probably the day after, as people parse the press conference and the dot spots and the new forecasts that
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come out, but again, i think if you are trading intraday, you have to focus on that. if you looking out to the next three, six months, to me, this is very easy. it's not confusing. you lean into rallies and sell them. >> because credit is going to tighten? >> for sure. credit is tightening for sure. companies are going to get more cautious. we're going to see jobless claims starting to inch higher. inflation will come down, but not fast enough for the fed to ease. >> yeah, i agree, rebecca. you know, if the market is pricing in cuts in june and powell wants, you know, the market to believe that he's nowhere near cuts, right, it doesn't offer a bit of a communication challenge, though, for him, doesn't it? i mean, how do you think the press conference is going to go? is he going to do the dubbish hike, a hawkish pause -- >> he could do either. i'm sure that's something they've been debating for the last few days and probably today. and both have pros and cons, right? if you pause, you could freak
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people out, that's my technical term, that you know something they don't. you could cause the market to rally, financial conditions ease, that goes against their goal. if you hike, but try to have dubbish language, but people focus on the hike, maybe that exacerbates some of the instability that's percolating. so, there is no easy decision tomorrow. this, you might have said this is the most important meeting -- i don't know if it's the most important, it's definitely the hardest one. >> so, the biggest opportunity for a misstep. i think hardest equals biggest opportunity for a misstep. i'm curious in terms of mispricing, i mean, the markets aren't a monolith, so, which areas are mispricing the fed the most? >> well, rates directly, certainly. but if you are going to think about, well, what do i want to own in this environment? where are the places to hide or where are the opportunities? and you all are going to be much better than i am at the single securities, but i would want to make sure that i'm covered for my base case, which is a recession starting later this year, and rates staying higher
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for longer, so, i would be nervous about having too much tech or growth stocks that are more liquidity-sensitive. i think they are vulnerable, not just because the valuations. i would want to have some exposure to good old fashioned basic defensive. health care and utilities. bitcount, different story, but i would want to have gold. i would not want to have bitcoin right here, because it's spin tech. at the end of the day, if we are looking at iquidity to tighten, that's going to be hit like that. >> rebecca, great to have you. >> great to be with you. >> rebecca patterson. guy, you like rebecca's play book? >> gold for sure. and i'll say this. might be a lot of people out there that are bullish gold, and this is not meant to be knewens whatted, i don't think the market is long of gold, to use an old term. when the market does get long, it's not going to be from these levels. it will be from significantly higher, when all the systems finally kick in, so, i'm with r.p., for sure, and it is
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wonderful having her back. >> it is excellent having her back. i'd just say this, she mentioned staples, utilities, health care, you see how poorly they acted today? literally, they were being thrown out. it is kind of interesting when you think about how the market closed the day, it just surged, it feels very, very speculative right here, and that just doesn't seem to be pricing for all the inputs she just gave us of what's not being priced in, i think the stuff that people are watching right here, this late-day rally, this, to me, just feels really unnatural. really do feel like the higher we go is the harder we could fall, especially if some of the banking stuff picks up again. coming up, earnings alert on nike shares. we'll bring you the details nex trying to analyze market trends.
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michael jordan and lebron james, still a driving force for nike, but the ceo saying on the call basketball is in the strongest position it's ever been. the strong earnings report we saw shows consumers are replenishing their sneakers and are willing to spend more, all while competitor adidas struggled with its split from kanye west. the cfo just said on the call right now, quote, we may continue to face heightened volatility. another concern, like you mentioned, is china sales growth. i want to point out, on a currency neutral basis, only up 1%. the ceo citing a shift in the covid problems in china. inventory up 16%, but when compared to q-2, inventory was greater than 40%. so, nike is definitely trying to get inventory in control, and that's exactly what they're
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talking about on the call right now. >> christina, thank you. so, inventory still an issue. china still an issue. guy -- >> listen, up at 16% year over year, but that's against 14% sales growth, so, actually, it's getting better. but now comes down to valuation. nike close to 32 times next year's numbers in this viable, with, again, margins that have been contracting. you want to pay for that. i mean, that's really what it comes down to. the knee-jerk reaction on knot america sales being better, the market got all giddy. then they said, wait a second, this is still an expensive stock. so, for me, i don't think it's a touch here at all. i think you look for low prices, which i think you'll see. >> it's interesting. this is the sort of guidance that makes sense. don't get over your skis. china is a really important market, the shift that got a lot of u.s. multinationals from zero covid out. so, that guidance is fine. i think the fact that they're saying that they're going to have margin pressure for the balance of the year, that makes
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sense. i suspect that's something we're going to hear as we get into earnings next month from lots of u.s. multinationals. >> and also just highlights the demographic shift. lulu, the study that was out, pretty much talked about demographic trends of the younger consumer and lulu and nike were at the top of that. if any other company went out with a similar guidance, i think the stock would be down close to double digits. i think it is testament to, one, their management of inventory, like the shift to dtc. it's still building and we talk about gross margins, that is of concern, along with the multiple, but the fact that the stock is not off more when they've been a bit conservative to me speaks volumes about the brand. >> if you are a believer that the consumer is going to be weak or weakened, michael, should you be excited about consumer stocks that trade at a premium? >> no. we don't think you should be. listen, credit's clearly tightening. we know the consumer is going to weaken over the back half of this year. i mean, you look at credit card balances, they've been drawn up
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to a large degree. you look at xf savings, they've been drawn down, and you think about everything we've spoken about, you know, listen, we're in an earnings recession. it just started. that, plus tighter financial conditions and tighter credit conditions means that the jobs market ultimately will slow, and the consumer should start to lose confidence. and so, i don't think that's the right place to be. >> you going to watch this movie that came out -- >> a lot of movies come out. >> the damon/affleck. >> teaming up again. i love them. they are big fans of the show. it's the phil knight story, the nike story. o-m-g. i think as a show we should do the show and then go to a theater in the area and watch it together. and then we can talk about it the next day. would you do that? >> that's a different kind of show. >> we could have milk duds forever. >> you haven't seen a movie in the theaters that's "goodfellas." >> 1972. >> oh, "godfather." >> there is a lot more "fast money" to come.
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so much. here is what's coming up next. plugged in and changed up. ev stocks speeding higher. and one name is putting its junk rating in the rear view. all the news from electric avenue, next. plus, the chief tiktoker making his own viral video. what the ceo of the chinese video app told users. ahead of what's sure to be a ahead of what's sure to be a grill on capitol hill. if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business with its forms and submit the application. go to getrefunds.com to learn more. - double check that. with its forms and sueh, pretty good!tion. (whistles) yeek. not cryin', are ya? let's tighten that. (fabric ripping) ooh. - wait, wh- wh- what was that? - huh? what, that? no, don't worry about that. here we go. - asking the right question can greatly impact your future. - are, are you qualified to do this? - what? - especially when it comes to your finances. - yeehaw! - do you have a question? - are you a certified financial planner™?
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rating out of junk territory. insurance registration data suggesting tesla sales in china could hit a record in the first quarter. shares are now up more than 60% this year. this is one of those growth trades that seem to be doing well, in spite of everything that is going on in this world, guy. >> listen, wrong in the earnings, i'll be the first to say. 155, i said fade it, 103, that was wrong. as it approached around 219, 220, on this show, we said, it has a date with 169. go back and look a week and a half or so ago, 163.86, bounced from there. you continue to trade the stock in those ranges. it probably goes back to 210 and then you fed it again. >> public service announcement. dan is going to talk about tesla right now, so, if it bothers you that he's going to be bearish, you know, just -- >> psa. >> i'm going to sound a lot smarter than you think, mel. okay, so, we just talked about nike and china, right?
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so, why the stock rallied 7%? third party data about china sales. we know they missed china sales last quarter. we know they cut prices last quarter. we just talked about margins, a u.s. multinational that is guiding down. well, guess what, people? last year, margins, gross margins for tesla were 25.6%. this year, consensus has them at 22.14%. is that incorporating the potential for a recession here in the u.s. or abroad? is it pricing in any potential for all the competition that's coming online or any geo-political issues as it might relate to china and taiwan? my point is, i actually think flat to down eps might be the best case scenario, and margins could be under pressure further. so, if this is a growth stock, if it's a margin story and the margins and the earnings might be worse than what is expected right now, and i don't know how you can listen to everything i just said and not think that that's going to be the case, then the stock really shouldn't be rallying, in my opinion.
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>> i love it. it's almost like, i can't understand why you would listen to me and not believe everything that i just said, because i am right. which may be the case. but there is a whole other argument that says, well, right now, every other ev maker, including the legacy oems are cutting price, and there is an opportunity for tesla, the growth stock, to actually grow and claim market share in the face of weakness from what has been viewed as the oncoming competition, which doesn't seem so fierce anymore. what do you think? >> well, clearly, it shows pricing power, in terms of their ability to offer discounts and look to take market share. i'm kind of with dan, though. when you have declining margins, it does not -- it flies in the face of long-term, you know, acreeive growth and stock performance. i think it's a challenging backdrop. with that said, there have been so many people that have been carried out trying to short tesla that i just refuse to do it. >> you know how much money was short tesla last year? $700 billion. i'm just going to say --
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>> those people -- how much money was lost before then? >> i'm not saying -- i'm not saying was made on the short side. but what i'm saying is that it went from $1.2 trillion at the end of 2021 down to, what was it, $300 billion just, you know, two months ago. so, we got a market here, and it's pretty wide. and where the stock has been trading over the last few months is really at the low end of that. and so, they need -- they actually have all of the risk. every oem on the planet, okay, is focused on their market share in evs, okay? so, they have the most to lose. not a $55 billion market cap company like gm. they're going to be around in 100 years, gm. like, the jury is still out, in my opinion, if tesla is going to be around. you can say, well, they're not particularly profitable, but that's the way i think about it. who has the most to lose? it's not gm and ford. >> when you look at innovation and disruption and the value destruction and then sort of how much they've rallied from the lows, it just shows you that the market doesn't know how to price
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risk right now. has no clue. and that's the problem. right? and listen, at the end of the day, a lot of these companies are cyclical, and cyclicals don't do well at end of cycle. and it's simple as that. coming up, even the boss is posting tiktok. why the chinese app's ceo made his own video ahead of a big hearing on capitol hill. hearing on capitol hill. that story is nwhat do you get from the morgan stanley client experience? listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ wow! it's been 38 years since we were here. back then we could barely afford a hostel.
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welcome back. another check on the markets today. stocks rallying ahead of tomorrow's big fed decision. the dow jumping up 300 points. the nasdaq leading the gains up more than 1.5%. its sixth positive session in seven. in the afterhours, shares have gained, surging on the back results, the company posting a surprise to fit. the first in two years. but not providing any guidance, which it has not done since the beginning of the pandemic. all right, meantime, tiktok will take center stage in d.c. later this week. the ceo is set to testify about the app's security and ties to china. but he made an appeal directly to u.s. users of the app ahead of the hearing. julia borsen has the details. >> melissa, that's right.
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tiktok ceo has reportedly met with at least a half dozen members of the house energy and commerce committee before that testimony set for thursday, and just today, the company unveiled new community guidelines. highlighting tiktok's commitment to free speech and cracking down on a.i. deep fakes. just this morning, posting a tiktok video in which he laid out the case for tiktok's importance to the american public. >> this comes at a pivotal moment for us. some politicians have started talking about banning tiktok. now, this could take tiktok away from all 150 million of you. i'll be testifying before congress later this week to share all that we're doing to protect americans using the app. >> take a look at the movement of all of tiktok's rivals. snap, pinterest, meta, shares much higher today. snap up nearly 7%. these are stocks that have traded higher over the past several weeks, and even beyond on growing expectations that tiktok could be banned.
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or that a forced sale could amount to a ban, or would prevent the company from being the competitive force that it has been. tiktok is, of course, taken share both in terms of time spent of consumers and also of ad dollars. melissa? >> julia, thank you. it's definitely a powerful appeal when the ceo can say, if there is a ban, they're going to take it away from half of all of you out there in the whole country you gone, no more tiktok, what are you going to do? >> go to the library, maybe. read a freaking book. i mean, just a thought. i don't know. no, it's interesting. how do you trade the stock -- this seems to be pretty bipartisan, number one. we've been talking about this for awhile, that could get real fuel for a name like snap is this. dan has traded it well. even at $11.50, i think this headline alone could get snap up 40%, 50%, and still be a company
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that's in a lot of trouble. i think it's a trading vehicle. snap is the way to do it. >> there are few things in america these days that really unite a big part of the population, and apparently tiktok is one of those unique things that people are united about in that they love it. they are monthly active users. half the country. who wants to own that they voted for banning tiktok? or does china, being scared of china, does that outweigh love of tiktok? i don't know. >> it's interesting. we talked about this with social platforms for six, seven years now, and it seems like u.s. consumers are not particularly worried about their privacy when it comes to these platforms and they don't mind that they are the product and -- in many of these situations. so, i agree with you. i think this is probably a bigger -- just a piece in a bigger puzzle, if you think about it. going back and fort with china on a whole host of things. started with forced technology transfer and the chip stuff that is going on right now.
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this is just going to be one piece of the puz m. but i bring it back to apple and tesla. if this stock, if this company, excuse me, thises is, gets banned here in the u.s. there's going to be far-reaching implications if our much larger u.s. multinationals. >> for more on tiktok, let's bring in brent still of jeffrey's. great to have you with us. is there a back of the envelope calculation that one can do or maybe you have done, as to how much meta would actually gain if there were no more tiktok or how much snap would gain if there were no more tiktok? >> well, there's no doubt that both those are the beneficiaries, because everyone's been running away towards tiktok, so those are the two big platforms, and i think reels from meta has really come back, despite if they go away o+
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i don't think that happens, to be honest. i think there's going to be a way they can find out -- a way to find -- you know, a balance between what they want and what the government wants, and ultimately, i don't think it gets fully banned, because as you said, half the country is using it, there's 5 million ball businesses on it. it is contagious, in my household, and you look at the young generation that's on this, there would be a huge revolt from getting banned. but i think ultimately, this can be -- this can be dealt with in a way with different ownership, different board, different structure, to ensure that, you know, we don't get the situations that we had with, you know, the forbes reporter that was followed in her gps, i mean,
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some of these things will pretty creepy in terms of what has gone on behind the scenes. clearly that needs to be addressed before this can move forward. >> let's say there is an announcement, you know, post-hearing on thursday, that tiktok is not going to get -- not going to be subject to an outright ban, that they will exist in some way shape or form, whatever you want to call it, what does meta do? how much comes out of the stock? >> meta's been rising on the cost-saving, so, you know, last fall, when they came out with the plan, came out two weeks after and cut the plan and the stock doubled on operational spending. it hasn't been running on the tiktok news. it's been running on the corp operational improvement. numbers are going to start to get easier, you're going to see growth rates re-accelerate. you're going to go from low single digits to perhaps mid to high single digit by the end of the year. you had a run on banks and
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industrials and cyclicals and other names, so, i think that's been a rotational beneficiary in the cost-saving that really has not, you know, investors that i talk to, in which are institutional investors are really focused on that, not on this. so, yeah, it's going to be a downdraft, if it doesn't, to both snap and meta, you know, call it probably less for meta, it's probably going to be a bigger downdraft for snap if they don't get banned. i think ultimately, it goes bag to a cheap stock for meta and the cost discipline they are going forward. >> thank you, we have details coming out of the conference call. let's go back to christina. the stock down by about 1.7% right now. christina? >> yeah, we just got an update on guidance for nike fiscal 2023. they are saying it's set to grow to high single digits, which is actually an improvement from the mid-single digit guidance they provided last quarter. they said for q-4 revenue guidance, going to be flat to
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low single digit growth, and that's because they are still working through excess inventory. nike's cfo weighed in on why q-3 margins are down significant lip. higher markdowns, elevated freight and logistics expenses, as well as higher supply chain network costs. all of that was only partially offset by their pricing actions. and then there's one extra little thing here, nike did say that they're beginning to see a rebound in china. more specifically, in-store foot action over there, so, those are the latest that we're getting from the earnings call. >> all right, christina, thank you. i mean, as long as inventory is an issue, which it clearly is, the margins are going to continue to be under pressure. >> and if that was the only story, all right, we could -- but the other side of that coin, or part of that coin is, the consumer is going to slow down, as well. there's going to be a demand component to this, as well. rising inventoinventories, dema destruction on the back of a
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weakened consumer with a stock that's trading 32 times next year's numbers. it's too expensive. it's not -- as i said, not casting aspersions here. nike is a great company, just happens to be expensive. two b two b ig the hiring process used to be the death of me. but with upwork... with upwork the hiring process is fast and flexible. behold... all that talent! ♪ this is how we work now ♪
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welcome back to "fast money." nvidia going all-in on a.i. today, codeveloping a new generation of advance model chips. this is called the iphone moment of a.i. jim cramer sitting down with wong after the event. here's what he had to say. >> the world is ready for this. we want more productivity, we want to do more with less. there is some major problems that we would like to be able to attack without -- without the help of a.i., we can't really get to it. for example, we announced at gtc this platform called bionemo and it's an end to end system that includes imaging systems, everything from accelerating cryo-em, x-ray.
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>> be sure to catch the full interview, top of the hour on "mad money." here is the question, you can believe that nvidia is the ticket when it comes to the a.i. trade, but do you pay 60 times for the stock? do you pay 60 times for the stock? >> 20 times revenue, 60 times forward earnings. that hasn't stopped people now for the last 50 or $60. they are looking past all this. they think they're at the forefront. this is going to be the most -- one of the five most important companies in the world. they get the whole thing. forget about a trillion dollars, headed to a trillion dollars, you hear that almost on a daily basis. over the last five years, you've seen some really lumpy quarters out of nvidia, on the good side and the bad side of the ledger. so, my sense is they're getting a little over their skis at these levels. >> yes, i tend to agree. if you look at the price action, it's almost retraced that move back to the high, but as you mentioned, the multiple has expanded by about ten turns. what i will say is a lot of that
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is attributed to the fact that people are looking forward and saying, there's going to be annual recurring revenue now. and i think that changes the game. we talked about resetting expectations around apple and services and things of that nature. the same thing applies here. >> options traders are betting the a.i. push means more gains. mike khouw has the action. >> nvidia was the third busiest single stock and narrowly beating the bearish ones today. the busiest call activity was in the 260 strike calls that expire at the end of this year. over 33,000 of them traded for 6 bucks over. finish the week more than 2% higher than where it closed today. the 250 puts were also extremely busy, so, it seems that there are two minds within the options market about what's next for nvidia. >> thank you, mike. for more action, tune into the full show, that's friday. coming up, a real estate roundup. roundup. we'll dive into today's hot
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welcome back to "fast money." existing hole sales soaring in february, as mortgage rates cooled, up 14.5%, the biggest gain since july 2020. major home builder stocks rising today. all the action comes ahead of kb homes earnings report, after tomorrow. could we be, possibly, in a sweet spot when it comes to housing? you have the supply/demand issue here still tight, michael. >> yeah, i mean, listen, it makes a lot of sense, right? prices have started to come down. if you look at the data, you know, it's really the sub million dollar homes that, you know, drove the -- the action today. it's not the high end homes, right? it's the lower priced homes, prices have come down, rates came down a little bit. all of that conspires to help the housing market, but remember, the housing market is a high multiplier segment of the company, so, any sort of strength there makes the fed's job harder. >> the stocks are telling you a very interesting story. i mean, they're all pushing
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towards levels we last saw in december of 2021, when they were all making all-time highs. the stocks have been grinding higher. i think you continue to stay long. i know dan is going to shake this out of me. i can see it out of my peripheral vision. >> you like real estate here? >> ah, i like real estate as a hedge to a general overall portfolio. i can't say that i'm willing to go -- the thing that i think, if you have some margin of safety, is just the multiple. and you've seen so much outflow there, i think that gives you some margin of safety there and the fact
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thank the gods. don't thank them too soon. kick pain in the aspercreme. time for the final trade. let's go around the horn. mike? >> long-term treasury. >> i think snap and meta will both be beneficiaries here, but i think meta has more of a margin of safety. >> dan? >> you didn't let me talk in the nvidia thing. i was -- i was going to do a would you rather, because nvidia and tesla both have the same market cap at 630 or something like that. >> you wanted to do that? >> i was going to say nvidia. i like snap, though. >> new york -- >> you would rather nvidia than tesla? >> final trade. >> i actually get to do it. >> i'm trying to give a tribute here.
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