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tv   Fast Money  CNBC  April 6, 2023 5:00pm-6:00pm EDT

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digest next week, mike appreciate all of your insights this hour, i hope you have a wonderful long weekend that is going to do it for us here at "overtime. "fast money" begins right now. right now on "fast," countdown to the jobs report while economies across america are tightening their belts and prepping for a recession, the market continues to take a what me worry attitude. so, how are stocks holding up in an environment where storm clouds seem to be brewing? pharma and health care names hiding high. low long will this trade be the right prescription for your portfolio? i'm melissa lee, this is "fast money," we're live at the nasdaq market site full house here on the december eck tonight. tim seymour, courtney garcia, dan nathan and guy adami
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we start with a look that everything that's changed since the collapse of silicon valley rates have plunged the yield on the two-year has dropped to less than 3.8%. bank stocks have dropped the regional and money center etfs are seen at lows not seen in two years credit is tightening sharp drops in loan volume and demand loan pricing, meantime, significantly higher and layoffs, they are on the rise the latest data showing nearly 90,000 people losing their jobs in march, bringing the total number this year to more than 270,000. all of this having impact on the cob schumer. new credit card data shows spending fell in march for the first time in two years. and lastly, oil prices crude is up 25% from its lows of last month back above 80 bucks a barrel yet, through it all, the stock market, especially big tech, holding strong the nasdaq leading the gains today. shares offal f al phabet, micro,
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hitting highs of the year. as we get ready for the job report tomorrow, how does this make sense, guy? >> doesn't make sense to me. there's that great publication, "the wall street journal" -- >> fine publication. >> it is we don't do this on the show, but equity risk premium, they talk about, you hear that every once in awhile, the worst it's been since, i think, 2007 or so, i mean, that's staring us in the face, but right now, stocks don't seem to care i think part of today's move, air quoting, is the way we look at the jobs numbers. they recalibrated everything so, things are actually worse, but the market interprets bad as good for the market. but i think that's part of it. as things continue to detier your rate, stocks continue to get more expensive microsoft, which you mentioned, 290s t that's 27 times next year's numbers. that doesn't make sense. >> well, the aforementioned "journal" had an article this afternoon, they were referencing
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basically inside the fed and how down to the wire they maybe weren't going to go, and that the fed really -- and so, what is it auger for the may meeting, you know, possibly they may be on hold, but there's more anxiety about the financial conditions tightening. i would just point out that i talk about how, as lock as the nasdaq and the semiconductors outperform the s&p, i want to be long the market. since march 23rd, the smh, the etf, is down 10% the nasdaq, not a lot, but down 1.5% so, through march 23rd, you had two different things going on. you had a flight to kquality, ad we know what happened to interest rates since that fed meeting on the 22nd, since you digested the fed, and the sense is, it should be, the fed's not cutting any time soon. we've had labor data, we had jobless claims today, we've had different things, an adp that was weaker, though there's usually an outlier, we have a
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payroll tomorrow that and the data, it's telling you that growth is really, you know, under pressure here. and i would watch those ratios, those relative performances to the s&p, because i actually think we're starting to give up some ground. and i think it can continue. we're really seeing growth get head winds here and if the job market is starting to slow down, as it will, as it should, equities will suffer >> so, have we been in the eye of the storm, sort of in this calm period before everything breaks >> the jobs numbers, which we'll get tort, i mean, it does look like they're going to be weakening, which you pointed out here, but you're still not really that bad. and i think that's what the markets are looking at right now. they're not that much higher than the prepandemic levels. i think that's what everybody is focusing on, and it looks like interest rates are going to be staying probably the same, if not lower later this year. buff i do agree, i would not jump into that i think likely interest rates
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are going to stay higher you don't want to be overexposed to those categories, but the bigger thing is, we're going to see how the banks are reporting next week and there's been a lot of pessimism there, but i think probably more so than is justified, so, i think i like some of the rotation you're seeing back into pharmaceuticals. the rotation into your big tech, i wouldn't trade here. >> keep an eye on the russell 2,000. guy, who is often prescient -- >> you should never give yourself a nickname, by the way. >> what are you looking at me? i've never done that before. >> psa don't ever -- >> history of people on this show that have -- >> that are no longer on the show >> and never to be seen again. anyway >> so good >> sorry but back in november, early november of 2021, before the fed pivoted to start battling uninflation, signaling they are going to raise interest rates, the russell 2,000, the small p kas broke out. in this really long consolidation. he said, watch the small counts. they are going to be the ones
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first affected by the rate increase and just interesting when you think about, russell 2,000 is still down 30% from those highs in early 2021. we had a huge rally in january up 15% felt like they were leading a bit. and now, even with rates coming in, we've heard all this fed speak this week, the fed fund should stay, or get about five and stay there a little bit, and look at the under performance of the russell. i think that's interesting and going across the spectrum, airbnb, again, they were supposed to benefit from the postpandemic, all that stuff, it was down 11% this week two down percent days in a row i think there's plenty of stocks, and you can say -- listen, you're looking at it glass half empty, okay and just fine, give me what i'm supposed to look at to be glass half full, because i don't see it i don't see the crowding in the largest tech stocks right now as particularly bullish, especially given all the uncertainty we
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have as we head into q-1 so, i keep an eye on small caps. i think they're going to lead the way. a lot of financial exposure in there. and i know we're going to talk about banks later and i have plenty to say on that. small caps and the other names that are not those top ten names, i think, are really concerning >> glass half full in terms of the overall markets is just the concentration in certain names and the crowdedness of those trades what are we going to see to make them crack, probably a lot would have to happen to make an apple or microsoft crack >> yeah, i don't love airbnb, but stock's up 30% this year off of where it was, you know, again, should be doing cart wheels about that? no but my glass is half full in a market that's clearly half empty. i mean, i don't feel great about where eps is going, i don't feel great about where the economy is going, and i heard mike santelli saying in the previous show, where you have a dynamic here where we've really done nothing in terms of where the index has gone over the last year, but we've done a lot and we've had a lot of great trading ranges and that's something that we're going to continue to do.
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a day like today, health care, i want to own health care. i want to own energy i want to own staples. there are places to do this. and i think that's where we are. the cycle of this bear market has so many more legs to go, in my view, that this has been frustrating for people, they want this thing just to play out and there's so many reasons why this time is different >> should we be waiting for an overall market crack should we be waiting for the broader index to crack or is it possible that we have these sort of rolling corrections within this index where we have the index largely, you know, emerge unscathed? >> that's the right question i would have said this many percentage points ago. microsoft, they didn't have a particularly good quarter. if you recall, traded down to 220 something. since then, the entire move higher, all it is is multiple expansion. things have probably deteriorated in their world. apple is an expensive stock $25 ago, it's an expensive stock now. the environment they exist in
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has gotten more difficult. google makes sense in terms of how it dropped and to come back on the back of the ai noise we saw a few weeks ago. so, i'll sort of extract that. but so many of the lives, all it is is just multiple expansion in an arena where we should be seeing the opposite, because earnings are going to deteriorate. >> part of what has change for these stocks, may not be the business dynamic, may not be they are getting more orders or what not, but that people are looking for more defensive names, they want cash on the balance sheet, they want somebody who doesn't need to tap callal for the market. >> right until, though, mel, until there's a demand issue until you start seeing demand decelerate and you start seeing, leek like, just weaker revenue. i don't want to put too fine a point on this, tesla, they reported deliveries, you know, over the weekend, that were up 4% quarter over quarter that included two price cuts, you know what i'm saying we know that's going to come with lower margins to guy's point, you have apple trading 27 times for low single
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digits earnings and sales grout expected this year if their expected sales growth is below -- we know with this kind of pesky and persistent, some of the inflationary inputs, that's going to come with lower margins. that's how these stocks are going to get rerated that's what's going to happen. >> yeah, i think valuation is going to continue to be important. we've been saying that, and clearly investors are not been listening. we actually brought up small caps, i do find that interesting, because most people are not excited about small caps right now and they are trading so much cheaper than your megacap text if you look at just the large -- eight largest companies they trade 40% premium to your small caps right now and that at some point is going to come back i don't think you want to reach for these things right now investors are continuing to do that and i would be cautious >> our next guest urges investors to take profits and get defensive. chris harvey runs equity strategy for wells fargo securities
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you didn't give yourself a nickname, because you are back good to see you. but just a warning, don't do it now. but what is defensive in this environment, chris >> pharmaceuticals, defensive. and really what you want to do, you want to look for better balance sheets you want companies that don't rely on the capital markets to fund themselves. i heard you are going to talk about the banks later, we are concerned about the banks. but the banking space as a whole is fine, but the ability for it to provide capital at a decent price, that's where we have to worry. that's where it starts to cause friction and slow down the economy. we think there's going to be more regulation, as a result, you have to raise capital. less and less loan production. >> eli lilly, and i'm with you on pharmaceuticals, but just to push back, stock went from 375 all-time, 310, whisper of an all-time high. these stocks are expensive can they continue this run >> they could continue this run, but our price target is 4200 we're at 41. it's horse shoes and hand
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grenades we're pretty close we have a pretty healthy 20 multiple on a 210 number you're not going to get much more than that and what we thought is, hey, rates will go down this year, we're going to go into a period where economy is going to slow, growth will be better. and the s&p being a large cap growth index will perform and you've got that. you can't expect much more at this point in time the risk reward doesn't look that great >> so, where do you get the beta, then >> you don't want beta you really -- >> you want to preserve capital? that's the environment we're in? >> i think that's the environment we're in i think this is going to be one of the most earnings seasons we've seen in a long time. because if you don't prohibit p print perfectly, the economy is not going to bail you out and there's going to be a big penalty for a big miss >> we started the show with what has changed since the banking crisis started has this evolved since then? >> no, this has evolved said then we expect some sort of economic malaise. we never thought recession now we think recession
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and so, we're getting a lot more defensive here, especially as the market has rallied, on the believe that the fed is done with their tightening cycle. >> you can hit a ball about 310 feet in yankee stadium in center field and it's an out. in boston, you could hit the pesky pole around 301, 302 and it's a home run. you've had such great trading ranges in this market. i -- it seems to me we're going to have the same grade trading ranges i realize you're making a market call >> right >> but within health care, staples t staple, energy, those are easy places to be defensive here. it just seems to me there are places to invest and there are places that are oversold there's no question, the sentiment on banks is terrible and there are banks that are probably worth owning. >> there's a lot of banks that are trading at very reasonable valuations and have very good management teams and a more conservative style. but it's going to be tough to
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exploit that in the short-term we're going to be in a range the wheels aren't falling off the court, but you're at the high end of the range. could we go higher yeah, i guess so, but can you sustain that not at a 20 multiple on 210, not for that long. and we're going -- i really do believe we're going to run into recession, and that's just not great for risk product let's not forget, the debt ceiling is coming up we're going to get some resolution on student loan and at the end of the day, we don't know if the fed is done, so, still a lot of risk out there. >> so, your title, chris, is head of equity strategy. >> yes >> but in order to preserve capital, do you actually recommend going out of equities? >> i think at the front end of the curve, you can make a pretty good rate of return. overseas, some of the valuations look attractive. what you really want to do is, you want really good risk rewards. and you can find that in fixed income and equities. so, the answer is yes. >> i bet he calls himself head of equity strategy >> that's not a nickname it's a title
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>> it's a title. >> it's too long for a nickname. >> i know what it is >> chris, great to see you thank you for enduring this. >> chuckle out of that boy. >> what do you think >> well, you know what's funny we've heard this a lot last year, especially when the market closed down 22%, the s&p 500, the back-to-back down years is not a common occurrence, right, over the last 100 years or so. and it's funny, because, you know, we had -- covid happened an the stock market wasn't down. so, we actually finally had a down 22% year last year. i just kind of go back to, you know, '08 was the only year that the financial crisis was down, but then go back 20 years and we had, like, a three-year bear market and it really stunk and there was a really long recession. i think what i took away from chris's commentary, he came into the year thinking soft landing, no landing, basically not a recession. and now he thinks they are and so, at some point, that's going to perm yalt most of investors thoughts, the way it
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did back in october, and think of where we were in october, when everyone was convinced we were going to have a recession we were at 3500 at the s&p earnings estimates are lower than they were four, five months ago, so, i think there's going to be a time when we're going to be flirting with that 3700, 3800, and that's going to be the moment of truth. if you are a long-term investor, that's when you layer into, maybe it's banks, the things that have gotten kind of expensive and you think about it on a multiyear time line >> and i do think the bearishness has turned since the banking crisis, and i think you are seeing that come up in the jobs numbers when you look underneath things, people leaving their jobs, so, people are not resigning any longer, because they are more nervous about the economy. they are not so sure they can find another job companies are actually pulling down positions from websites so before they have to fire anybody, well, why don't we just hang tight and see how the economy goes that's the same thing you are seeing with the markets here people are in this wait and see mode and not sure where things are going to go in the future.
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earnings going to be really important here it's the first time that we've had any visibility into that >> the irony of pesky, we were talking about him before the show, he only hit 17 home runs over the course of a ten-year career the fact they named a -- >> a pole after him? >> it's craziest >> does it say it on the pole? >> it does not >> glad we covered the pesky pole on "fast money. >> news you can use. >> good. >> do not miss a special edition of squawk box tomorrow that's news that you'll be able to use, actually they're breaking down the jobs report as soon as the numbers cross. and coming up, pharma fury so, is this trade the right prescription for your portfolio? we'll debate that. and big tech's exposure to china. lawmakers meeting with industry leaders to discuss the threat from beijing the details out of that ahead. "fast money" is ba itwckn o.wor.
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welcome back to "fast money. we have got a news alert on jess staley let's get to christina for the latest >> that's right, meless is a a new filing for the case regarding the relationship between jpmorgan chase and
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jeffrey epstein. lawyers are asking the judge to sever the bank's lawsuit against him from other charges over the firm's types to the disgraced financier. the new filing asked for the trial to be pushed back to march 2024, saying that the current schedule gives him and his lawyers, quote, grossly insufficient time to defend against what he says are false accusations. we have, of course, reached out to representatives for staley, the bank, and j-do, and we'll update you if we hear back in the hour >> christina, thank you. united health, johnson & johnson, amemerck, and amgen performing welt. should you stick with the safety trade? guy, the valuation question, you were trying to push on chris harvey about that. >> i don't think -- that's the thing. i understand why it's perceived to be that way, but this was -- there were some growth in these names for a very long time now, they've gotten expensive,
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but they've historically been expensive. eli lilly, there's been a problem on valuation for five, six years. they continue to grow into it. merck, tim talked about it, and did karen, was a $68 stock i think it closed at 113 today amgen, the best stock out there, that's way too cheap in this environment, so, though it's perceived to be safety, i actually think it's still investable as growth names, too. >> yeah, courtney, you look this as a defensive play? >> yeah, i do. our acronyms at the beginning of the year, united health and merck. those are two of the top holdings in there. and people were pessimistic on these after there was so much optimism last year and people started to rotate out of that trade. i think the fundamentals continue to look really strong and i think -- i don't think they're overvalued here, to guy's point, and i think they are going to continue to do well especially those two names, united health and merck, they
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have done a lot to reduce their costs. you had merck spun off some of their lower margin businesses, which is going to save them a billion and a half by next year. and you have united health, going to help their highest growth margin. >> unh continues to grow in the fastest growing parts of health care that's why the multiple keeps going higher let's talk about j&j i mean, this week, they removed a major cloud moving over their business it's expensive, but you can't tell me that this isn't bullish for j&j, when was coming off a range trade near the bottom of its range, up about 8% i think you still buy this thing. devices, consumer products, and pharma i think their pharma pipeline is growing fast er than most of their peers. the medical devices business is seeing some pricing power, so, i think j&j is a great stock to own here, especially as you've taken risk off the table >> the talc settlement unh, a chart -- the chart master has called god-like.
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>> yeah, just broke out about that down trend that's been in place for months tim, what about your pfizer? that one, it's interesting, is it digesting -- earnings are expected to be cut in hatch, but if you look at next year, you see 10% earnings growth and mid single digit sales growth, trading at 10 1/2 times or something. is that setting up -- >> i think it is, and i think pfizer had this windfall from covid, right, and people wondered what they were going to do with it and they spent that entire windfall on acquisitions that are supposed to give them $25 billion in sales by 2030 i like that they've gone down that road. this is where this thing continues to bottom and find range so -- that's where i bought it. it's not done a whole lot since then i think it's a good place to be. >> all right, a lot more "fast money" to come here's what's coming up next. the china connection lawmakers honing in on big tech's relationship to beijing the details out of the latest silicon valley meetings. plus, earnings season is around the corner.
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and who better to kick things off than the big banks can they say anything to ease investor fears you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. so, am i still on track to reach my goals? the plan we created can withstand uncertainty. lately everybody has opinions about the economy, but i count on personal financial advice. my ameriprise advisor understands the markets and me. she knows my goals and can help me reach them with confidence. the markets may fluctuate but you're still on track. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. - double check that. because advice worth listening to eh, pretty good! (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?
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welcome back to "fast money. members of congress continuing their three-day tech tour in california today, meeting with executives at google, microsoft, and palantir to discuss china threats. the house select committee met with disney's bob iger yesterda and meet with tim cook tomorrow. what were the take aways, steve? >> yeah, well, mel, members are hosting a slew of tech
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executives to discuss american businesses reliance on china that includes ai safety and crypto-currency. hatching right now, mel, executives including microsoft's president and google's chief legal officer are in attendance, with smith giving a presentation on artificial intelligence and then tonight, it's onto the vc crowd, with a dinner attended by prominent vcs now, this is the big one, mel. apple is more reliant on china, both for manufacturing and a large portion of its sales more than any company in silicon valley that is why they are getting their own meeting tomorrow and i'm told one item on that agenda for the apple meeting, the protests we saw at the iphone factory in china last month. security forces were seen harming workers who were trying to escape covid lockdowns at the factory. now, apple and cook himself never denounced the violence and that's expected to come up also expected to discuss apple's reliance on china for supply chain and how it can wean itself
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off. but this silicon valley tour is really just about getting feedback we're not expecting anything tangible to come out, think of it as a fact-finding mission and the house committee afterwards will make those decisions, mel >> feedback on what, steve feedback on china/u.s. relations -- >> it's everything it's the big thing one thing that happened right now is, obviously, mel, everyone is talking about ai and brad smith from microsoft gave a presentation early this morning about ai and he actually said the gap between where we in the u.s. are at ai is actually very narrow to where china's at, this is particularly on the large language models that power stuff like chatgpt so, a lot of people concerned that china might leapfrog us, microsoft saying no way. >> all right, steve, thank you >> you got it. >> this seems like just sort of the prelude to things happening in terms of the screws being turned on the tech sector. >> yes, but we've seen this
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prelude to a kiss before, which was a great broadway music back, i believe, in the '90s >> don't look at me. i don't know i can't help you >> we've seen it before. typically, the stocks seem to recover well it's theater so, maybe i should concerned, i'm not. i will say this quickly, on the squawk box this morning, a wonderful interview with somebody from forte capital. he put owl aut a very bullish ce for palantir >> you were a little early >> in our world, that's wrong. but he made a compelling case for them kern their balance sheet looks great. if they get into the medium-sized businesses, think it's off to the races. >> i'll quote dan, who often points out who has got business in china, who doesn't, right in google's case, not that worried about it, right? and if you think about, in meta's case, they're not really that worried about it. apple, lots to worry about, on top of the other things. but i just think that these
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stocks are trading more as a function of market participants really than anything and then, there are the levers they can pull on cutting expenses and being more efficient we know what that's meant for meta and why they were getting punished i will also just say that in case of google and meta, i believe it more than ever seeing the q-1 digital spend data, i think the companies in terms of their media businesses were punished first and questions were asked later and if you look at google, up 9% q-1, meta about 8%, so, their business is stronger and it's better. it doesn't say that we might have a recession, they might suffer but -- >> should we be thinking about this as, you know, china can just decide to, you know what i'm going to make it tougher, i'm going to make you hand over the data to us, just like you are trying to do zb-- >> that's why microsoft and digital companies are not there. forced technology transfer that
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was an issue and has been an issue for 20 years in china, so, some of our digital companies have just been locked out. we had stephen roach on last night, he was talking about it listen, that guy knows a lot about china and knows about our dealings with china and he's talking about a very hot economic war that could lead to other things i just don't think history is going to look too kindly on tim cook and he spent 25 years creating this supply chain and the reliance on manufacturing over there, or elon musk, you know, and their reluctance to kind of call out what's going on in one of the most totalitarian regimes on our planet. >> at the same time, you have other multinational companies that have done well there and built a huge presence there that are not elon musk, that are not tim cook you have mcdonald's operating very well, starbucks >> yeah, but -- >> joint ventures, gm going there, building factories with chinese companies. if you are going to say, you know, elon musk should bear some responsibility for not coming out --
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>> mel, these are two of the biggest companies on the planet. they're two of the richest men on the planet. okay they employ hundreds of thousands of people. and again, i just think that, you know, they usedifferent -- over here, tim cook is a social warrior in the u.s., but they don't say a word over there. and he does all these secret trips over there, right? and he's cozying up with the communist party. >> every u.s. company -- >> no, they don't tim. facebook is not doing it >> because they can't. they can't >> i know. >> they're not allowed in. >> i know. >> so i said history is not going to be particularly kind, if we have a hot economic war or something more with china. that's what i said >> i think you are vilifying the approach to doing anything it takes to do business in china, am i right >> well, i mean, with elon musk -- >> american companies all do that and they do it around the world. and every other economy in the world, it's a little different >> split them up >> we have a split screen. our form of democracy only exists here. the germans don't have that --
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>> or canada, australia, europe, they all have our form of democracy. >> they don't have chinese democracy, but like, american democracy works in america, and there's a lot of other places that i would say are democratic, but definitely don't think -- and their businesses don't operate the same way there's a much bigger social net in europe. there's a burden on those companies to be more socially-minded. and u.s. companies, again, they do business a little bit differently in every single place. that's really my only point. >> right >> and i don't think apple is alone on that. so -- >> all right well i'm glad we got a split screen >> that was fun. >> i don't get a last word here? i mean, i'm just saying -- >> you just got one. go get it. >> but again, like, these are two of the biggest companies on the planet, right? and so, they operate by a set of rules here, i get it, based on our democratic system and our capitalistic system, but i think it's hypocritihypocritical, whad steve just said? tim cook hasn't said a word about the working conditions or whatever so, again, if we are ending up in a very different situation
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with china than we've been in in the past, where -- i just think -- >> it's not going to go well for apple, i agree with that >> then u.s. consumers should boycott, right we should -- as the ones who live in a democracy, we should be upset with those companies for not saying anything. we should be calling them out. >> they've done this to nike on sweat shops in southeast asia and other companies. people work with their feet. yeah >> all right >> okay. >> everybody good? >> i'm good. i'm good. coming up, bank earnings coming in hot. our traders have strong opinions on what to watch that's next. plus, one industrial name getting scratched up this week, down more than 8%, but can shares pounce back that's a hint. tus.y"ade, when "fast mone rern
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welcome back an update here, jpmorgan responding to jes staley's legal filing let's get back to christina for that >> yeah, this update pertains to the lawsuit about jpmorgan and jeffry epstein that we just brought you maybe 20 minutes ago. jp mopmorgan chase's spokespersn says jane doe herself has directly accused him of horrific sexual misconduct and, if true,
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he must be held accountable. and then another quote, he's inextricably linked to these cases, it makes no sense to separate him so, those are the two latest statements that we promised we'd bring you if we heard from jpmorgan, which we did >> christina, thank you. financials set to kick off earnings season on friday. could be a first detailed look at the banking crisis. all out with numbers over the next few weeks check out the action over the past month should you be shorting these financial etfs ahead of the results? dan, what do you think >> you know, i've been long puts in the xlf, i've been trading around it. it's finding a little bit of support here i think there are probably bad presses into the print there may be statements that kind of sent the stocks to new recent lows, but it's not a great trade here, given how much they are down in such a short period of time and how little we know about the major money center banks that being said, if they were to rally, because, let's say the
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poor price performance over the last month discounts some bad news, i think the unknowns that will persist for the next few quarters, i think it gives you the opportunity if we had a 5%, 7% rally in any of these names to maybe take some off the table, and in my case, i would look to short them >> in theory here, when you think about the regionals, all they have to do, and i say this kind of lightly, all they have to do is say the deposit flight wasn't that bad. the deposits are fairly stable and that seems like that could be enough of a catalyst to sort of, you know, light a little bit of a fire even if it is short-term here. >> yeah, i think people have been a lot more overly pessimistic on the banking sector -- i mean, it's justified, it's understandable why people feel that way, but i don't think that when we get earnings out, i don't think it's going to be as bad as people are expecting. and i think the bad news is priced in. and when you bring up, well, there's so many unknowns, i think you want to get into it before the -- if there's positive news come out, you want to be in it before hand, you
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don't want to wait until after there is a lot of unknowns, we're going to see next week and kind of lift the blanket here, but i think likely you're going to have some upside. >> regionals >> kre is trading at a 2 1/2 year low, 4125, closed at 42 1/2 or so, so, that does not trade particularly well. xlf is at huge support levels, back in february of 2020, that was resistance at 31 past resistance becomes support. we've tried it a couple times, we're right there now. courtney is 100% right a lot of negative, understood, but you have to ask yourself, what is the environment for banks going forward? there's going to be more regulation, without question, credit conditions are going to tighten. i think by definition, their earnings power is going to be deminnished. so, you can make the argument they are cheap on valuation, they're cheap for a reason >> what should the valuation be? that's right in that environment. >> and you talk about xlf before, what do you do without berkshire hathaway in there? you don't hold support you are not even close
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it's 12% of the xlf. you should know what's in all of these things and i just think banks are going to be range bound. i don't think there's any way they can rally through this, especially -- we still don't really know what the securities portfolios look like, where they would have losses. they don't have an obligation to report them, per se, or, you know, maybe some of them will. this is a chance that some of these guys can point out that we're inviesting in aaa treasuries i just think the credit dynamics that i think we all talk about that have yet to really hit, i think regionals are more exposed than anybody we're talking about a world where there are credit problems that come from the consumer and smaller companies. that is where they are exposed and that's where people that were shorting regional banks before they even knew about svb, or those same guys are the same kind of guys that were shorting svb are the guys that have looked at regional banks for the last two years and said, they're
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very vulnerable. coming up, wall street job cuts and tech layoffs may have a big impact on the finances of new york and california. what it all means for the empire in golden states but first, a special thursday edition of chart of the week. llzename seeing names get we 'll reveal the name after this f more "fast money" in two
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welcome back to "fast money. time for our chart of the week this week, it 's w-e-a-k week. caterpillar, the stock's second-worst of the year brings it to its lowest level since october. i know you. >> reporter: watching this one, guy. >> bear cut it to, i think, underperform from neutral, with $180 price target, it closed at $210 today that is pretty interesting people will point to caterpillar valuation is compelling, it is, until it's not anymore and that's not meant to be glib, but things change very quickly in this world. and with these ism numbers, some of the numbers are catastrophic. tim talked about it earlier in the week, some of the numbers we've seen, we haven't seen in decades, so, cat doesn't win in that environment, especially if this is a global thing, so, i
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think the weakness is justified here >> you don't need equipment and financial new equipment is probably harder than ever than it's been in a long time, i would imagine. >> it would be i would look at steel companies that have underperformed dramatically if you look at u.s. steel, went from $31.75 down to $24 before bouncing a little bit. but that's a massive drawdown. that's one of the most economically sensitive balance sheets out there and certainly their business and the prices that you saw in hot rod coil and the strength they had in the business, even during difficult times coming out of covid, i think a lot of that is being held in question and i would agree, the -- the day we had that ism number, all the resource stocks got destroyed. and they haven't recovered. cleveland heading in the opposite direction today the stock is up 7% on the year and options traders are flooding the name mike's got the action. mike >> yeah, we saw five times the average daily call volume. the busiest contract, the may 20s. those traded roughly 69,000.
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most of that was institutional blocks the june 20s were the second busiest contract, trading 26,000 contracts. buyers of those calls making bullish bets that the stock is going to be up 18% or more between the next six and ten weeks, between the may and june expirations. but as tim pointed out, the steel prices, the futures for sure, are lower than the price hikes that the company just announced. >> all right, thank you, mike khouw. for more options action, tune into the full show next friday, 5:30 p.m. eastern time coming up, it's almost tax time and the swath of recent layoffs is factoring in in some unexpected ways. why some states are looking at tax hikes to make up for it. more "fast money" ahead.
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welcome back to "fast money. big tech layoffs and cutbacks on wall street are crushing tax revenues in california and new york robert frank's got the details on what this means for two major players in the u.s. economy. robert >> well, melissa, california tax collections down 4% over the past year. new york down about 1% that may not sound like a lot, but the rest of the states are
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up 11% now, one reason is the falling stock market and tech wealth that reduces capital gains revenue. but the big worry is that withholding taxes are also falling, that means payrolls the unemployment is rising in both states, especially among high income workers. they pay a lot more taxes. bonus income is falling. wall street bonuses down 26% this year. and then we have all that wealth flight those high income taxpayers who moved out to lower tax states during the pandemic. that may now be showing up on the tax rolls. both states have potential budget problems as a result of all this, especially as that federal raid runs out from covid. california had $100 billion surplus just six months ago, now it is looking at a $22 billion deficit. new york's budget is delayed as the legislature battles the governor new york city facing a squeeze from higher spending and slower revenue. mayor adams saying a $4 billion
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budget hole could force cuts in almost every city agency so, melissa, all this is happening very fast in two states that until really recently had big surpluses >> yeah. and god forbid they saved that money instead of giving it out as sort of a handout when they had the money. it's such a quagmire, robert, because when you have to cut, services go down, and that's another reason for people to leave the city and yet you raise taxes in order to better those services and people leave the city >> yeah, it's a conundrum. and that's what these cities also -- there's politics thrown in, where both california and new york and especially the cities within those states are progressive, and so, 80% of new yorkers support this tax on those making $5 million or more. the governor is holding fast on that, because she's seen the people make $25 million or more that left in 2021, so, it's both an economic conundrum as well as
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a political one. >> yeah. robert, thank you. robert frank this -- >> did you see squawk box today? >> yes >> did you see judd gray and -- >> yes, i saw that >> i apologize -- >> nor. >> people are flying new york, because of all these these thing when you thauk aalk about tax receipts, this is the beginning of an important story. and that got heated today. if you haven't seen the clip, i encourage you to watch it. >> property taxes in new york city have gone up 40% in the last five years. they can't tax us anymore. you're getting less for your money. actually getting more trees planted in the middle of the street and yellow paint so you can't drive anywhere you are getting more bikes on the sidewalk, but not getting anything more for your money >> is that a personal -- >> i just -- i'm not the only one that feels this way. >> yeah, no, i'm sure you are not alone. up next, a big win for c
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chipotle on national burrito day. yes, that is today that plus final trades next. por. to more wellness solutions every day. get more with nature's bounty. dad, we got this. we got this. we got this. we got this. we got this. yay! we got this. we got this! life is for living. we got this! let's partner for all of it. edward jones
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guy -- >> yes, melissa. >> you're going to love this national burrito day is today. >> woo hoo >> careful >> celebrating with a win. sweet green says it will rename its chipotle chicken burrito bowl after they failed a trademark infringement lawsuit >> of course they did. >> shares have had a blowout month. >> yes, they have. >> up 12%. guy? >> the irony of this is not lost on me, quickly the sweet greens cats were georgetown grads that started at little tavern burger >> little tavern >> yes >> wow did a lot of damage to my system >> by the way, had a cmg last night, it was -- >> extra chicken, no beans, no tomatoes >> exactly right >> that's going to be selling off the shelves, folks >> expensive stock it's been expensive for a long time love cmg even more now, tim. >> okay. i think it's very expensive. i wouldn't go near it. i felt that way for the last,
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like, 1,000 points on the stock. >> courtney? >> it's expensive. and you can't buy a chipotle burrito on national burrito day. i'm from san diego, so -- >> oh. nice >> maybe tomorrow, but not today. >> bang. >> burrito shame from courtney >> i love that >> mission style gal >> what? >> mission burrito >> san diego >> yes >> mission district. >> it's time for the final trade on this thursday tim seymour? >> well, altria. they gave some aggressive eps targets and i think they stay there. it's a great dividend and the company is priced poorly >> courtney? >> walmart i think actually especially with some of their growth strategies, i think it's a great play. >> dan nathan? >> talking about tim's pfizer and getting into that midpart of the year and people are going to start valuing some companies on the out year, so, may look interesting. >> new franchises in professional sports could screw up a rain delay, but today, on a
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beautiful day in new york, call it a rainout on poping day >> it was supposed to rain >> come on >> that's a very insensitive comment and reckless comment >> bristol myers >> thank you for watching "fast. have a great weekend "mad money" with jim cramer starts right now "mad money" with jim cramer starts right now my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends i'm just trying to make you some money my job not just to entertain you but to educate and teach you call me at 1-800-743-cnbc. or tweet he me @jimcramer. we still haven't gotten closure on this regional banking crisis. we don't know if the jobs market is going to take a major hit tomorrow we're unclear on how muc

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