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tv   Fast Money  CNBC  July 13, 2021 5:00pm-6:00pm EDT

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tonight the battle over voting rights. lawmakers facing arrests as the president enters the fight plus covid fright. the scam robbing millions of americans. live overlooking new york city's times square, this is the big show, "fast money. i'm dom chu in for melissa tonight. next to me, karen finerman tonight on the show we are breaking down the banks. goldman sachs and jp morgan both falling today. you can see after reporting their results, there is another big slate of bank earnings coming your way tomorrow morning. we have your setupcoming kcominh show
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michael sonnenshein from grayscale investments. we'll talk about the move. crypto specifically coming up. we end the day with gains and take a look at some of the big names in the industry. apple, alphabet. they may have ended with highs on their day but they set new records at the closing bell even as the broader markets pulled back from the all-time highs so what do we make of the big move in tech i'm going to turn right now to my right because it's karen finerman right there it was coming really full steam today.
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what do you make of the record highs? >> i'm not quite sure what to make of it, actually i like facebook, i like alphabet, amazon the only f-maga i don't own is netflix. i'm happy to see they were all trading higher they are kind of that mix of growth but, i think, decent value. so you can kind of pick your poison high rates or low rates, they could fall into either one. they did fall off a little bit i'm happy with them, i'm staying with them. to me it was more interesting about the banks, which we'll get to more later, and the other sort of interest rate sensitive stuff. the post-pandemic, pre-pandemic, where are we that was sort of more underneath the surface today. that was sort of more interesting to me. and confusing, actually. >> it's kind of reminiscent of what we saw in august, right we saw the maga tech really asserted itself and it was the
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sort of thing where a lot of people were scratching their heads and wondering, why are these stocks making the most every day? we know it was buying a lot of hard name calls. you had a sharp fall andly i see this move in a maga cap tech names that are maybe unprofitable weaver all had big names in shorts, including names like grouch maga complex. it's a little offensive. i don't like the price earnings right before setup you said that was one thing you didn't like about them, that they've won hard into their earnings, so i don't think this
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is good if their guy is called a dead -- i've heard folks literally refer to mega caps as the safe trade the trend has been your friend for now -- call it 11 years. >> i absolutely think it's a safety trend almost many. you can pretty much make a compelling case for each to go higher i'm sure karen would agree with this, and we brought it up a number of tichltz i could, based on 100 and three multiple, given their feesability and nothing i like about face boom other than the stock, and you can make a pretty compelling case
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they are defensive i actually think in a per verse way, the move ais what we mentioned. >> then why would you be maybe a little cautious, what you just mentioned. it's the most consequential sector out there what do you think? is this a safe place to be adding divisions in tech >> first of all, dom, great to have you second of all, dom, we have a case of the companies really outperforming on first quarter earnings despite even what we know about the companies and the moves that they had, they all posted extraordinary earnings, and they are all giving you growth at a time when -- the perverse thing about today's cpi number is,
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yeah, the yields finished a little higher. there was a bad election that may have had something to do with that. what it's telling you is, to me, again, the market is preparing for more fed even if a lot of this move has come since the fed made their call to a hawkish statement in mid-june, and the optimal performance of slower growth are well positioned for that i also would just make an argument that wii se've seen a of rotation over the last year i don't think this is that crazy, but it's a slower growth trait, to be clear, and look at small caps which are an economic growth proxy they have missed the social queues since the bond market actually peaked. you're getting a sense as yields
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go lower, that's the fear of real growth happening, and of course maga is going to be offensive. >> we call this show "fast money" and we sometimes like to make some fast moves here. when you saw amazon break out the first part of 2020, be careful, because september 2020 was a bad month for apple and amazon apple was down 20%, amazon down 18%. i guess the point is buying a new breakout after a sick move like we've had of 15% or so in two months in two of the largest names in the entire market is probably a tough way to make money unless you're convinced it's just smooth sailing and straight up from here. >> what does the interest rate picture look like, karen over the last -- call it five or six months when rates were heading higher, we talked about this notion that people talk about the capital as a pricing model, they talk about
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assumptions given rising interest rates, and that was the justification for the sellout we saw in certain growth areas of the market technology names were some of those names there. now you have interest rates falling. is that the real tailwind? are we still in a regime where lower interest rates are going to boost those technology valuations >> i think they're going to be the ballast for them i think part of the reason they came in, valuations were crazy they were supported by low rates meaning incidents on lower earnings some don't have earnings, some don't have earnings of the year or intermediate future, and some of them were pandemic stocks that really did well zoom is obviously a poster child for that kind of company to me, rates being here or a little higher, they're still maybe expensive. maybe a balance for some, but a lot of them are very, very stretched, still >> tim, if you take a look at them, are there key parts of
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that technical services trade that still act well in your mind we talked a lot about the fact that some traders have looked toward semiconductors as a leading indicator, possibly, or maybe cloud computing or software stocks? are those still places that people can say, hey, these are tea leaves that may be the best a hid or the worst ahead for semiconductors >> semiconductors have clearly led the market higher. i think we had this conversation a couple weeks back or so, most important charts, et cetera, et cetera and i think the senate made that fed meeting by a bid, and the output of that meeting was that the fed will be more in play and that could put some growth but you absolutely have to follow the high growth tech components the communications side of the tech world is, i think, a little bit more name specific as we get them into the software
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part of the tech trade, the fact that we've gotten to a place where rates are moving lower, you have seen more of a push into these high multiple names, and even some of the tech companies, i think they will continue to outperform in this environment. >> even though the s&p and the nasdaq are high today, and you may want to keep handy some a antacid. we ever our summer of indigestion call, chief market strategist tony. you've heard the conversation from the traders here, do you feel there tha there is a l little, and.
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>> so whz -- this is what karen was talking about, this excessive move in the recovery theme. remember when everybody thought they were going to go to 2%. not being in the banks and industrial materials, it was unthinkable. now we've taken a lot of wind out of those sails you have driven back all of the relative performance of the economic recovery trade, in many cases going back to last summer, especially in the material names. what got us cautious was weakness there, and that's underneath the surface that is clearly affecting portfolio managers that i talk to twol years you have cyclical is just the opposite. i'd lover to talk to you about
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that, too, is the market if. for example, let's talk about the nasdaq who made a new high yesterday. as tom's por on zoo. >> if you've got a situation in terms of >> we always expect that in extreme volatility is there some idea that the summer is just going to be this kind of environment and people just have to get used to this notion that there could be moves, maybe a percent or so, up and down but that nobody is really playing it? is anybody going can career long or short in this market. july
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>> i think so. >> we're not betting on the down side and we're not betting big on the upside. dmomt the stock market, r, it's what happened on the 2009, nefrl tfrl -- the cyclicals is when rates peak every recession is unique. you go into the "snl" crisis, then you had boss and the great financial crisis and then of course the transition. the response to that is always the same print as much money as possible, give the most physical stimulus
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that's possible. once that's done, which has already proceeded recall>> remember peak earnings stuff. >> what would it take, what would be the prilosec, i guess,. >> you have created the summer that will create the year-end
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opportunity. in 2009 and 2010, many times is you it will and finally the embassies. you have a market event like a all of it underneath >> that was the "summer of indigestion" by tony dwyer are you expecting any fires on the downside in the coming weeks in the summer trade? >> i've been expecting it for a while. it hasn't come to fruition and tony, if you list sen and ra
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his work, it's been entirely thoughtful it's been one and a half, two months before he puts this out when we were talking about a prep prec precursor, but what i'll tell you is don't even mover i in th 10-year yield. we went from 125, 124, back to 131. >> if that were secrety rlt was the fall of 2012 >> speaking of the summer of i understand -- indigestion.
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boeing cut its trade timing. a top analyst breaks down all of the action today and the anticipated action tomorrow. don't go anywhere, back in two
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welcome back to "fast money. as you can see shares of american airlines are on the move, up about 1.5%. let's get to phil lebeau with the details, and phil, how positive is the news >> it's positive, don. this is a company that's scheduled to formally release its q2 results next week, but as you sometimes see companies do, when it's good news, they want it out sooner. so they dropped it within the last hour. we're not going to go through all the numbers, but the important ones are this. they were expecting a loss of $2.44 a share. americans saying it plans to lose between $1.67 a share revenue is expected to be better than the street was guiding. 7.47 billion is where revenue is expected to come in. the expectation 7.74 billion
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a year ago this company was burning through $100 million a day. in the second quarter of this year, it was accumulating $1 million a day. i know a million is not huge, but when you were losing $100 million a year before, we're seeing that for all the airlines this is boeing, shares down at one point more than 4.5% i think they ended the day down 4.2%, they were down for the day. this is the company announcing that it is going to be dropping down its monthly production rates for the 787 dreamliner currently at five per month, they're not saying they are also going to be delivering fewer than half of the 1787 dream liners that are
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built but not yet delivered. here's the problem ly ly. >> we won't go through the details here it's anl they will be expecting and reworking those 100 dream liners that are in inventory. the time to take care of approximately is now credit s-- morgan stanley on 787
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it's another minor headache that shifts the timeline of deliveries to the right. credit suisse on 787 saying, it begs the question why, after ten years of manufacturing 787s? the maxes that were ordered late in the month, 45 planes were delivered by boeing last month that is the best total of the month for deliveries that news clearly overshadowed by the 787 dreamliner problems that continue to nag this company. let's see how much the dreamliner issues change their guidance for the rest of this year dom, back to you >> let's talk a little bit about this, guys tim seymour, i'll throw this out to you first if you look at the action during the regular session, you can see
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like three-quarters of the dow's loss today was just boeing by itself so it was a big drag for the overall trade. is there something you say, hey, it's gone down enough, religion. >> let's face it, '97 has been the breadwinner for boeing remember, we actually gofrlt i think rpgly the orders you want to get pr boeing is deny today, too, saw some pressure for don which is going to be downgraded we're leasing upsd
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ily. ly. >> yeah, i would just say if you're looking at trends and up trends and what's about to break or what might hold, look at the iet. despite guys' plan began tyler pitch, we all give a thumbs up there. down about 9% from those recent holes a pipd about fortunately we're going on pre-pandemic about their planes and orders, that sort of thing, but shoertly we'll see a lot of shifts and starts with this show and trying to make demand and all of it to go together at this poirnlt.
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you'll hear about a lot of different industrials over the next year. >> the airlines, i think they are the possibility of -- this is back to the airlines. they ever just gotten crushed in the las fix or r >> we'll get a sense i don't own them but i would be happier going into earnings like this r many
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welcome back to "fast money. what you're seeing there is goldman sachs and jp morgan down in the red goldman sachs ceo david solomon discussing the results in an exclusive cnbc interview just a while ago on the "closing bell." take a listen. >> i think we're not going to see the level of activity we saw, for example, in the first quarter and that was clear by the two earnings reports you saw today. but i do think there are two things going on. one, i think that fundamentally activity levels given the environment, the size of the overall wallet was larger, and i
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think the large players are also a consideration. lower market share, 160 basic points we feel very good about the way we're positioned >> all right i mean, some would consider him, goldman sachs, a bellwheeather you said you didn't like this setup. >> i don't like the setup. i liked what they had to say, i liked what jamie diamond had to say because i always like what jamie diamond has to say, but i want to see what he felt about the economy. he was pretty optimistic on long growth, he was pretty optimistic on gdp growth. he thinks interest rates should be higher so that's good for banks. there were a lot of things that
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were interesting there was the very huge investment banking revenues which were gigantic. someone like a goldman sachs will also have that. they had trading revenues that were lower than we thought they had reserve release which we thought the credit quality was outstanding, then there's the pressure on that interest margin which we knew and will persist for a little while, but hopefully they will be long growth we were talking before the show about the amount of loan growth in their financial business. i don't know if this is all billionaires firing up their assets, i'm not really sure, but there was a lot to like except for the setup going in if i didn't own any, i would be buying some today. i think we'll see similar things in the banks goldman sachs experiences the same thing citibank as well >> you only mentioned one part of that loan growth issue.
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it was down 3% in the consumer group, and i think that's pretty interesting, if you think about it, because that was one of the concerns going into all of these was about, a, the health of the consumer we know they built up huge balances over the last 12 to 16 months or something like that, but that's a huge wealth transfer what happens when it goes away and then obviously we're seeing some of these backups with some of these purchases and large items right now. you can't buy a house if you want to buy a house, you can't buy a car. who knows what this looks like on the other side of this thing, and i'm not sure how great balance sheets will be six months from now. >> for more on those big bank earnings, let's bring in jury a -- girard cassidy was this from volatility of last
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year what all stuck out to you? >> you're right, dom, when you look at the business, they're either easy or difficult if you compare the trading in 2021, those are difficult comps. investment banking, on a year to year basis, those comps are quite strong i think karen summed it up well with jeremy diamond's comments he was quite optimistic about the outlook for the economy, and that tells us that long growth will start to materialize next year in particular, if you look at jp morgan's credit card receivables, it's a primary source of consumer gathering they were up 7%, 28% annualized. we anticipate you'll see more of that from the other companies like bank of america, wells fargo and sidney that report, as you know, in the next day or two. >> girard, it's frustrating as a bank investor to see those
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reserves that rolled off the 3 billion or so for jp morgan get shrugged off as a non-event, don't really matter, yet when they were rolled down a year ago, there was punishment for them will there be a delay for investors here, because again, this was profitability held back last year. i get it, but it sends a miss s -- message that credit is much, much better for these guys >> you said it well and you're right. when they take the big hits like they did a year ago, it hurts the stocks but they don't seem to get the benefit when they bring it back to revenue we all understand this is one time in nature you said something very important. the credit quality very good jp morgan chase had a 29 basis points charge ratio. it's not only the reserve releasing but what it implies, which is credit is very strong
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and that's very positive for all the banks, including jp morgan over the next 12 months. >> girard, we've had this conversation before. i think pmarkets, here we are today, what's multiple for pre-jp morgan in the environment we find ourselves in right now >> it's really a good question because, as you know, jp morgan does trade at a premium to the group. and the group, when you go back to the year-end 2017 which i would suggest was the first normal period post financial crisis, because you remember the world changed prior to the financial crisis for all the banks due to the dodd/frank legislation. you go back to 2017, they trade at 2-point tangible which implies because of jp morgan's premium to the group, getting to
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three times tangible is not that crazy. now, granted, we need to see rates move, we need to see loan growth come back we're not calling for that in the next three to six months but if this economy comes back, rates come back, loan demand comes back, and we're sitting here in 2022, then those loan amounts are not that far-fetched. >> before you go, i always like to ask, is there a favorite part of that that you like? what's standing out to you right now? >> i would say universals or money centers, the jp morgans, et cetera, because they ever the diverse revenue. you get the banking business and at the same time you get the consumer restraint we see coming in the second half of the year then you get the commercial long growth as supply chain problems finally work themselves out and the demands for loans starts to accelerate again
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>> gerard cassidy, thank you >> thank you >> i know why you would want to get into the universals because of what gerard cassidy just said karen, does it still hold? can you get into these banks and still feel comfortable with an investment perspective >> banks always trade cheaper in the market, they always have but the amount of cheapness is now pretty high. they normally trade tighter than they do to the market. so i'm comfortable owning jp morgan's citibank, bank of america, wells fargo and morgan stanley which is a little different animal >> i am short of the xpf i know a guy would make a valuation case for citigroup, and you look at citigroup and the way that stock has traded, it just hasn't seen an uptick in the last month or so i don't think you're going to see results out of bank of america or citigroup
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i'm not going to say any more. i think jp morgan and goldman is about as good as it gets you start to think about the back half of this year, and i'll just go back to what china did on friday. what did they do, they cut the reserve requirements for their banks. they already had their v-shape recovery, so all this excitement about what may have happened in q3 and q4 in our economy, it might make sense to step back here >> can i talk with dan fora moment are there any mull ptiples at wc you would buy kciti >> i don't know, i suspect it's going to be worse than the other ones and i would just buy jp morgan it's a big level it's held over the last -- forget about valuation, i'm just talking about from a trading perspective. let's see if they hold they look like they'll go back
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there in the not too distant future, and they haven't outperformed since november. let's face it, back in october most of the market had come off of the lows. banks were still going lower so when you think about, that's great, low reserves, but think about how many trillion dollars of monetary fiscal stimulus were thrown at this crisis to get us where we are, and we're talking about, oh, this is a good valuation for this bank. >> we had the same conversation about wells fargo a year ago down, down, down, there were things wrong with it -- >> i would have told you to sell it their sentiment was so bad and evaluations were so cheap, so why wouldn't you buy them down th there. >> it's only really start to
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take off over the last six or nine mochlts we have a lot more, by the way we have a pair of can't miss bank interviews coming your way tomorrow we're going to hear from bank of america chairman and ceo brian moynihan first on cnbc, then you've got wells fargo's chief investment officer it all starts tomorrow, 3:00 p.m. eastern, right here on cnbc, so if you want to talk banks, you want to get insight from the guys who know it best, apparently, you have to tune in tomorrow to catch those big bank interviews coming up, alibaba jumping today's session, climbing 2% on the day. we'll break down the move higher straight ahead ki> plus one investment firm is mang a big mover in the crypto space. we'll bring you the details in a few minutes. "fast money" is back after this break. feel the power of contrast therapy,
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welcome back to "fast money. check out shares of ali baske baba climbing 2% as chinese regulators continue their crackdown on big technology
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companies. so, tim, alibaba is pretty much the proxy many investors have for the chinese market overall how are you trading it >> i'm trading it from the long side, but i'm as frustrated as anybody, and i've been wrong on being long for the last six months we were having that breakout moment, and around the ipo scuttling, dismantling began a series of very difficult headlines for this company as it related to the regulator, so antitrust and otherwise. look, they made a settlement, they did some of the right thing, they're saying certainly the right things, they have no choice the question here is really for a company whose core business is growing at about 20%, and the multiple to me was somewhere around 28, 29 times forward. look, i think this is becoming extreme long-term value. the market business is where they'll show some strength there is heavy investment there as well. look, i'm not jumping out of
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this trade i think it's been a very difficult run, and if you don't believe that the chinese regulators are going to understand the importance of this called a national chinese company, then you should get out now. i don't think that's what's going on here. i think the down trend on the stock, you need to break 230 until you actually start to see a breakout from this we have a way through this >> it's down 17%, guys, over the last 12 months coming up, we are talking to the ceo of graystone investments as the company takes a step forward in the crypto space. plus, talk about a java jolt shares are hitting an all-time rate today and that has investors nipping on that stock. okay, imagine this...
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32,5, but our next guestis hoping that will turn around they are turning their bitcoin trust into an etf product, announcing an exclusive partnership with bny mellon. let's talk about how you're a little worried about the downturn wea've seen in bitcoin itself >> good to be with you, dom. i think investors have seen this type of volatility we say that more often than not, investors use pullbacks. the times may be averages down on those positions or maybe it exceeds a position we previously had. >> if that's the case, we would see some kind of a step in to
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buy. yet right now, one of the things that stands out to me, being a former fun guy in a previous life, is the amount of discount that we see in terms of the share price for gbtc. what does that tell you about the sentiment around bitcoin and the other crypto space >> that's right, gbtc is starting to trade ate discounted share price. buying them at a discount now will actually allow them to control bitcoin in investment than if they bought them in a bond market. i think investors know we are
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deeply committed to creating -- trading back in an etf format. >> bny mellon was one of the first institutions to say they were going to start looking seriously at incorporating crypto coin in one of their platforms. i guess i'm curious, if you could just take us through, and the other viewers and listeners out there, what the difference is between the grayscale bitcoin trust as it exists today versus what it would be like as an etf product. >> well, gbtc is a publicly traded, passive scale traded in
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bitcoin. it's a highly traded company in 2020 it has all the makings that one would see in an etf except two items that remain. number one, gbtc would move to a national securities exchange such as nysd or nasdaq, then they would be regulatory to the product such as there could be redemption so what they own today they could see later. a couple steps left to go but we really are excited about what we're doing with bny mellon and making sure we move the product to regulators. >> michael smerconish, thank you very much. please come back and update you on traffic at your end of things we appreciate it
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guy, i'll go to you on thi because honestly, i'm trying to figure out if this is any kind of hiccup for the overall crypto industry does the fact that bitcoin is not doing anything right now really take away some of the shine? >> it feels that way an naysayers will say it's trading too long, but i can make a pretty cogent argument, i think, that the best thing that happened to the gold market was the gold etf, and the worst thing that happened to the gold market was the gold etf. my sense is you might see similar in bitcoin again the scarcity value is something bitcoin fanatics really get around it will be interesting to see how this trades over the next couple weeks >> guys, coming up on the show,
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starbuck's with more gains brewing. "fast money" is back after this. or fedora shopping. talk to your broker. ten-x does the same thing, - but with buildings. - so no more waiting. sfx: ding! see how easy...? don't just sell it. ten-x it. need better sleep? try nature's bounty sleep 3 a unique tri layer supplement, that calms you helps you fall a sleep faster and stay a sleep longer. great sleep comes naturally with sleep 3 only from nature's bounty
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welcome back check out starbuck's bringing another record high today, bringing that options market to
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a boil let's get to mike coe with the options action what did you see today >> starbuck's traded at three times its call volume today, and one of the most active options we saw were july 20 that expired end of this week they traded for just over 60 cents. buyers saying the strength we saw today could continue to the end of the week. we saw some august 120 calls trading as well, dom >> tim, let's take a look at this 120, the show is at 155. is this something we're buying right now, starbuck's? >> i'm long so i'm buying it every night, as karen says, when i go home. i look at the ticket sizes and so the komps that are brutal but the ticket sizes were tough. the margin improvement here was up 9%.
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i think that's going to show some surprise here tough time to own it valuationwise, but i love what they're doing. >> guy, are you buying what they're brewing? >> tim is right, the tuck valuation, if you notice the prices continue to go up and the portions of the drinks and food continue to go down. i think you can stay with the long starbuck's trade despite valuation, which seems a bit stretched here >> karen, dan, either of you guys like the starbuck's >> i'm long. >> you're long and you're going to stay that way >> yeah, wea've seen it play out large in cng, right? >> i brew at home. >> i know you do i know you do. in that fancy keurig and whatever else machine you got there. more options action, tune in to the full show it happens every friday 5:00
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p.m. eastern time. don't miss it. a lot of great activity with mike coe and the gang. final trade, let's go around the horn ken seymour, what are you seeing in the trade >> i don't brew at home. i'm excited to go to starbuck's. this is one of the great reopening trades plus 150 billion that will be handed out to consumers in the form of child credits and whatnot. i think starbuck's will get their fair share of that the multiple is tough, but their ability to expand on that is very high, so i'm staying long starbuck's >> guy domi? >> we talked about a burrito blowout, but we're going to give you a couple egg mcmuffins because i think starbuck's will blow out in earnings in the next couple weeks >> karen finerman?
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>> i'm going with earnings >> earnings, i like that call. >> no one can do anything until it comes out tomorrow morning. tim mentioned the underperforming of semiconductors its se he.wan mier ithe biggest in the stocks. i play that with the biggest edge "mad money" with jim cramer starts right now i promise to help you find it. "mad money" starts now >> my job is to educate and teach. call me. tweet me okay we know inflation is raging right now. we are hearing from all of the


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