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tv   Fast Money  CNBC  July 28, 2021 5:00pm-6:00pm EDT

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life in the nasdaq market side overlooking new york city's times square this is "fast money. i'm melissa lee tonight on "fast," we are awaiting pricing for one of the hottest ipos of the year robinhood numbers expected at any moment our teams working the phones will bring it to you as soon as we've got it we're tracking after hours action, shares of facebook, ford and paypal, we're breaking down the numbers. and later cme group ceo terry duffy joins us sexclusively.
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we'll talk to him about the rise of the retail investor and much more we start off with an earnings alert on facebook. that stock is lower after reporting results. the call is underway let's bring in julia boar sin wit with the latest. >> facebook's results soaring past top and bottom line expectations the stock is down about 4 hours after hitting an all-time high today on warnings about what is coming ahead, saying that in the third and fourth quarters they expect year-over-year revenue growth rates to accelerate significantly on a sequential basis. cfo david waner writing in the company's release, quote, we continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recently ios updates which we expect to have a greater impact in the third quarter compared to the second quarter. this is factored into our
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outlook. now, another factor to watch here in earnings, revenue growth was driven by an increase in the price of ads up 47% in the quarter while the average number of ads grew 6%, and growth stagnated it in the u.s. and canada did not add any daily or monthly active users to that user base between the first quarter and the second quarter melissa, the call is kicking off right now. we'll be listening carefully for any insight into how facebook's investments in commerce and also content creators will help pay off over the long run. back over to you. >> julia, i'm curious as to why we are hearing so much from facebook in terms of the impact of the headwinds particularly in the third quarter, the back half of the year compared to a twitter and a snapchat, which didn't sound like it had the same level of concerns that facebook has >> well, look, i think that facebook had raised the red flag earlier, you know, as early as january by the impact that
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apple's operating system change would have on the company. that impact has not been felt by snap, by twitter, or by facebook in any meaningful way in the second quarter facebook is the one that would feel the biggest impact of that, and the third quarter is when that would really hit. and also, melissa, just looking at the scope and the scale of the growth that facebook has already had, i think that this is a comparison game to a certain extent and as they've juggled these two issues, the fact that they had such massive growth last year and the fact that they're coming up against these ad targeting headwinds. that's going to be a factor. they also point to regulatory headwinds. we will learn more about that on the call the question is whether that's just about the restrictions they have in terms of ad targeting for privacy concerns or whether that's about restrictions to any potential m&a they might want to do or rlimit to that as they anticipate more antitrust down the line. >> julia, keep us posted thank you. add to this the run up in facebook shares on the back of good earnings from twitter, from
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snap, and from alphabet yesterday. guy, what did you make of this quarter? >> i thought it was a remarkable quarter. i haven't seen steven person since march, it was wonderful to see him. we're finally starting to get back to normal i thought the quarter was outstanding. julia just said it, the street was looking for 37 there's nothing not to like about the quarter. it's clearly the guide that has people concerned i was convinced i'd come in here tonight we'd be talking about a $400 facebook stock. that's not the case. i think the quarter's fine i think the business is intact i think they're throwing some cold water on top of it. i think this selloff is a buying opportunity. >> i think it's self-imposed i think they're setting there getting out ahead saying things might not be so great going forward because things have been pretty damn awesome in the past for facebook look at the chart. every time we talk about privacy issues, every time we've talked about regulatory issues, every time we talk about political headwinds, what does it do
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takes it, gobbles it up, moves right the heck on, and that's what it's probably going to do now. >> tim, the implication of all of this is that facebook is conservative in its guide. we've seen that in the past, so do you discount -- do we discount the message they're telegraphing tonight >> i'm not sure you discount it. i don't think there's anything wrong with being conservative, and so what investors should do with this, the mplace where i'm little disappointed and i get the two-year stack, and i get where actually if you read through the lines, it's still very impressive. the ad growth as a function -- ad revenue as a function of really higher pricing versus wider, more organic growth among small, medium-sized businesses, that was something that stood out to me. great that they're getting higher prices. while everybody is growing their footprint and really across the board we've talked about twitter. we've talked about google, last night up 69%, this is the place where everyone expected this to be gang busters.
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if there's some disappointment, it's the detail within the ad revenue. it's not the guide it's that ultimately they may not be drowning as fast as their peers. i don't understand that. look, the tailwind that's helping all of these companies, facebook is really near the front of the line if not at the front of the line, and there's no one to challenge in the short to medium term that's why i think the guys are pointing out just why, you know, a conservative guide doesn't mean a whole lot there's a reason why the stock trade's cheap to the mega cap tex names. >> unless if you dovetail the headwinds, and that is the impact of the privacy update to the os, that if it makes it more difficult to target, can they actually charge more if the ads, and is that rise in ad rate as opposed to volume of ads, is that sustainable pete, what's your take here? >> yeah, it's an interesting concept. and i tell you the guide being as conservative as it is, it's
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refreshing, but it's also a little bit surprising, i think, given the fact that this has been facebook. they've been dealing with this for how many years now we've talked about zuckerberg getting up in front of somebody in washington, d.c., it seems like every few months. i think the reality is this. we have to step back for one moment and go back to last thursday stock was trading 350. we got all the way to 377 today all-time highs before we had this pullback from there, and obviously a 3 or 4% drop now i'm not overly concerned, mel. i still think that the upside is there. i think the $400 like guy is talking about is not that far away i think people will shake this off. i think the reality is, yeah, the targeting is something that facebook absolutely has taken advantage of they've done an unbelievable job with some of that. i think the reality is they're still going to be able to do a lot more than folks think. i think when you look at their ad growth at 56% on a trillion dollars -- take a look at the market caps right now of snap and twitter. when you look at those and then you look at this trillion dollars company that just
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continues to be growing at the pace that they are, it tells me that there's still plenty of room to the upside, and i still think it's too cheap. >> i agree with pete on that it's interesting that tim brought it up, steve as well and pete the fact that obviously these concerns have been out there, but this within the last month, month and a half, yet president biden, i'm probably paraphrasin so forgive me, effectively saying facebook is killing people don't dismiss that they probably got together in a boardroom and said maybe we should sort of tamp things down here that might be part of this guide as well. i still think the business is extraordinary. just look at the numbers and i think the guide is probably sandbagging just a bit given the environment that we find ourselves in. >> how much of the privacy issues do you think or just the conversation dejour, how long of this do you think are going to go away with the next headline that kicks it out? and if so, then facebook i going to give us a tremendous discount to where we would normally be paying i mean, that's my feelings do you feel like people really care >> i think we don't know
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>> yeah. >> i think that people really care until you press a button and say what am i getting, what am i giving. and as soon as you decide is it worth what i'm getting, then we'll know. >> let's get more reaction to facebook earnings from "fast money" friend and managing partner gene munster what do you make of the quarter? >> well, first, i have a sense of deja vu when i look at those commentary i remember a couple of years ago when they first started using this very conservative language. i thought this is the beginning of the end of facebook i was wrong. they have two-thirds of the global internet population their products are addictive, and advertisers crave that reach, and none of that's changed. so when i think about the commentary, i'll quickly put it through the translator what they said about the revenue growth for the september quarter. it's going to be around 25%. this is effectively what they're saying, the street was at 31%. they'll probably beat that number and end up right back where you're at, which gets me to my bottom line is that as you
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start to move away from mid-50% growth to maybe 30% to 20% next year, facebook not surprisingly falls into the same camp that all these other big tech companies are, which is going to spend time over the next several months as investors start to rethink, potentially rerate the multiple going from high growth to difficult comps and so from a stock perspective, i think we're sideways, and i think that eventually all the benefits and the power of their brand that your esteemed panel talked about today are true, and that will benefit. i will add one other piece to it that hasn't been talked about as much here, but over the next call it 50 minutes on their earnings call, investors are going to get a drubbing on the term metaverse mark zuckerberg is on a mission to educate the world about the metaverse, and the potential that facebook has around it. and i mention that because i am a believer in the metaverse,
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even though i don't want to spend time in the metaverse, i think that it is going to be part of the future, and i think facebook has an opportunity to finish my thought, long-term to start to build maybe an exciting growth story around the metaverse that isn't reflected in shares today. >> so as a believer of the metaverse, gene, i mean, how much of a potential do you think this could be for facebook and i don't know how you think about facebook thinking about the metaverse, if there is a facebook metaverse, if it goes into an existing metaverse and creates, i don't know, facebook land where you can interact with friends on facebook, but in the metaverse and transact in the metaverse. how do you think about facebook's role? >> well, what they want to be -- and i'm going off some recent public comments from zuckerberg is they want to be a platform that other people can plug into. when you do that, you can make money a lot of different ways. it can be an advertising based model in these virtual worlds. you can have advertising models. you could have ways that you
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charge different developers to plug into the metaverse. you can have entertainment you can come out with different content within the metaverse effectively it is just a totally digitally immersive world. if you don't believe in it, just look at what's happening with roadblocks and the two hours plus of daily engagement from their users. this is just an extension of it. i still haven't answered your question, melissa, what is the impact to facebook here? it's the next operating system that's why apple is aggressively going off augmented reality as part of the metaverse. googl google wants to be there too i don't want to put a specific number on it, but just the hope and the dream around that i think could rewrite the multiple higher over time it's not going to be a light switch tonight investors aren't going to be drinking the kool-aid on behalf of facebook and the metaverse. i do believe over the next year, let's put it this way, if you try in word or your different word processors when i type
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metaverse it comes up as a spelling error it will not be a spelling error in the years to come >> all right, we'll see about that gene, though, is facebook ultimately -- i mean, how much of a growth company is it if it is saying that revenue growth comparisons year on two years back, so pre-pandemics compares it to pre-pandemic will decline modestly >> modestly. so what that means -- >> how do you view it? >> so what that means is pre-pandemic in the last two quarters of 2019 they grew at 25%. the street was at 31% for the september quarter, so they're saying it's going to be modestly below that, call it 25% below that but back to the deja vu thought is they've said this before. they're going to beat that it will end up being 30%, but there is something to benoted. there is reason for it to trade down today is that they're not saying it's going to be 30% and then they end up doing 40% and keep in mind, facebook beat expectations that had risen by 5% google beat by 10, apple 11%, so
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there is this sense, that near-term theme and they had it in their guidance, we're exiting what was an epic tailwind for the company. they're going to end up at an impressive growth rate 20%, that's really good for next year, and they'll get some credit for that. it's not going to be 55. >> all right, gene, thanks always good to see you gene munster, loup ventures. steve, what would your question be on the conference call? >> i do like the idea. we all sat around the "fast money" table when they bought instagram and they had 13 employees, and we said what are they going to do with that so i think they're in the infancy in the metaverse they're in the infancy vr, ai. i would ask what they really think the regulatory headwinds are in their words. >> we will keep an eye on facebook shares are slower right now. the call is underway we've got another earnings alert, this one on paypal. shares are under pressure in the after hours. kate rooney's got the details. >> hey, melissa.
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paypal shares down more than 5% here after reporting lower than expected revenue for the second quarter and coming in light on guidance i spoke to ceo dan shulman right before the earnings call kicked off. he says the weakness was due to ebay transitioning off of paypal's platform. the ecommerce giant has been moving away from using paypal and onto its own payment system. he said it's happening faster than we expected and he describes this as really a timing issue they knew that volumes were going to go away eventually and the sooner they're flushed out, the better shulman says it will highlight how strongly the core business is growing for paypal. on the call, schulman says he expects ebay to make up about 2% of volume by the end of the year he mentioned the delta variant and renewed fears around covid potentially moving people back to online shopping that could weigh on travel and leisure spending he does say online shopping has been resilient even as economies
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reopen total payment volume for the quarter coming in at 311 billion. that was up 40% year on year paypal is also upping its full-year guidance for payment volume total accounts meanwhile for paypal topping 400 million in the quarter. that was up 16% year-over-year, and finally, venmo, that made up about 58 billion of that payment volume with 58% growth year-over-year >> kate, i am shocked no mention of crypto from you >> i know, i've been waiting for it i turned the call off so i could hop on "fast money." we haven't heard anything about crypto yet there was nothing in the release, but that is definitely what i'm listening for on the call >> all right, kate, keep us posted thank you. >> kate rooney in san francisco on paypal. pete najarian, what did you think of this quarter? >> i think it was a pretty solid quarter. there were a couple of areas where they seemed a little weaker one of the problems i've had with paypal, this was a name i was in for quite a while, and
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then i got out because it seemed to me like it was really getting stretched. you know, when we look at a lot of these various tok stocks, we talk about are they stretched. what is the pe level now and what is the growth rate? the growth rate has slowed somewhat you look at a stock trading at a p/e north of 50 plus it seems to me like it's a little bit ahead of itself i'd love to see enough of a pullback to get back in there. you know, this is just minor 6 or 7 or 8% to the downside i think it has to pull back significantly more i am impressed with venmo. i can understand why that was such a great acquisition, but other than that, mel, i think that there's some concerns for me about the valuation level. >> i can hear the twitter verse already screaming, pete, at what level? when you say a significant pullback, what does pete mean by that pete, what do you mean by that >> well, when i look at the p/e-trading, literally i'm looking at it right now, it's trading about 67 somewhere like that, mel. i think that number has to come
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down the way that comes down is the stock has to move significantly or they're going to have to jump up the earnings. this stock has to come down, i hate to say it, but at least another 50 bucks or more before it starts to get a little more appetizing. >> yeah. tim. >> stock's been a beast. look, it rallied 25% into these numbers, largely on a six-month basis has done nothing but is up 70% year-over-year all of the trends that are in certainly cashless payments, et cetera, the digitization ecom ecommerce, it's fantastic for paypal what's the multiple? pete's saying too high quarterly revenue's up 70% its sweet spot, they should be growing fast it's hard to argue with where this company is positioned and it had an enormous run into these numbers. so i would give them a bit of a -- i'd give them a pass at the price action we want to see it grow higher, but company's well-positioned. >> yeah, in every single earnings report we've asked when we see the stock reaction, does
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this support the multiple? do the earnings support the multiple and that's where we're at at a market at record highs. >> yeah, to pete's point, when you traded to 60 times next year's numbers, you can't come in and disappoint because actually, if you're looking high in the street for paypal, i think was a buck 22, and they didn't come anywhere close to that, and then the subsequent guide. when pete's talking about level, i think the may low or so was 240. that makes a lot of sense. i'm not necessarily sure we're going to get there but 240 should be on the radar screen it becomes a valuation story what you're seeing is companies are now -- we've seen this over the last couple of days, decent quarters, not great guidance, and those stocks are getting punished it's interesting. >> but if you look at the numbers and users up 16%, venmo up 58%, they're still blowing the doors out on their competition. the other flip side of it is how much competition has come on in the last coupled of years for paypal so i'm glad pete said and i'm glad guy said it if i would have said down another $45, it seems insane but
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now that three of us say it, it's realistic 240 is where you buy the stock. >> you just normalize it. china rebounding in a very big way. did this trade just turn a major corner or is there nor pain ahead? we're digging into that. we're all over after hours action on ford, that stock is cruising higher in results we'll bring you the details when "fast money" returns here. new aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. that building you're trying to sell, do- you should ten-x it.n. - ten-x it? ten-x is the world's largest online commercial real estate exchange. if i could, i'd ten-x everything. like a coffee run... don't just sell it. ten-x it. i'm dad's greatest sandcastle - and greatest memory! but even i'm not as memorable as eating turkey hill chocolate peanut butter cup ice cream with real cocoa.
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welcome back to "fast money. we've got an earnings alert on ford let's get to phil lebeau to break down the numbers. >> we are about 20 minutes into the ford analyst call, and just a few minutes ago ceo jim farly said that the chip supply situation is improving, though it's still tenuous, they're still relying on the company renesis in japan rebuilding because of a fire. those are the positive comments that are pushing shares of ford higher the company reported a surprise profit of $0.13 a share. the street was expecting a loss of $0.03 a share the outlook, they're going to be raising their full-year earnings before interest and taxes by $3.5 billion, full-year free
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cash flow will now come in between 4 and $5 billion, and the second half volume in comparison to the first half will be up by 30%. and then there's the plans for the electric vehicle portfolio first and foremost, what's happening with the f-150 lightning, the company announcing that reservations now top 120,000 vehicles remember, they're supposed to start delivering those lightning next year. the second half commodity costs, however, that is a headwind that they're going to be dealing with, and they're more than offsetting the production gains as you take a look at shares of ford in the last year, they have 60 to 70,000 vehicles that are essentially built but not finished they are awaiting components, whether it's because they have a couple of chips that are missing, whatever it might be, they expect to clear out that inventory, melissa, in the third quarter. so they've got some nice headwinds that will help them in the second half of this year again, as jim farley just mentioned on the conference call, it's a tenuous situation
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here it's not as though you can sit there and say we definitely know we're going to have all the chips we want. it's improving, but it's still not exactly where they want to be, and they expect that to improve as the second half of the year goes through. >> phil, before we get all hopped up about the 120,000 reservations for the electric pickup truck, what ado those reservations represent do people have to put money down >> you're putting down a $100 deposit. it's a matter of semantic, do you call it a reservation, do you call a preorder, how many of those people will follow through and order the vehicle? the expectation is pretty high these are people who -- there are some people who take a flyer and say, sure, put $100 down and maybe down the road, they're like i don't really want to buy it maybe my situation's different, maybe i don't have the job that i had. maybe i don't need the vehicle i thought i would need most of these, and this is the case with most of these vehicle reservations most of the time the people follow through and order that vehicle. >> all right, phil, thank you.
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phil lebeau on ford. tim seymour, what'd you make of the quarter and also the commentary about inflationary pressures will persist or could persist into 2022? >> welcome to the club who hasn't told us that, and look, ford got out there already and they've talked about the units, 700,000 units in q2 in terms of affected by semis and whatnot. he also mentioned that the order book, i think the term was spring loaded. for investors the thesis is the following. ford, yeah, we know about the f-150, very exciting jpmorgan i quote them, this isn't my quote, ford now appears to be progressing more quickly toward fully autonomous driving than tesla, with its 9.7 times multiple versus tesla's 100. that's great stuff, but the most important thing is that ford is profitable, and higher warranty costs, losses in europe, losses in latin america are a thing of the past this is a company that's run very well, so you have enormous
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exposure to autonomous and ev, but you have a company that's profitable at a time when the auto cycle is really in full swing. so trading less than ten times the company's very, very attractive to me. >> pete, would you rather, i haven't asked you this question in a very long time, i think ford or tesla? >> oh, boy, that's tough you know what? i'd have to lean towards tesla i only say that because of the advantages they've got because of all the data they've been able to gather along the way gene munster has been all over this i know he was on earlier he's been all over this for a very long period of time as well i do like ford, mel. it's profitable. that's something that's obviously key, and the fact that the biggest -- the biggest roadblock right now is the fact that these shortages arethere or inflationary side of things i mean, that's the problem is just trying to get the chips into these vehicles. so the global chip shortage is affecting so many different businesses, but particularly in the automobile business, i think
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ford is really on the right path going forward. it was up 80% back in may or june, and then now it's back up, it's about a 57% so far this year, year-to-date, but i think this has a lot more room to run to the upside, especially from what they were telling us about their full year. i like this company a lot. >> he played the game extraordinarily well played by the rules. >> he didn't go off the board or all these nonsense. >> he surrounded the trade >> do you have anything to contribute to the actual conversation >> i do have something to add to the conversation it's no surprise ford is being run better if you look at where the ceo went to school free cash flow story now it absolutely a free cash flow story. it hasn't been for a decade. on valuation if you give them a ten multiple, which they are deserved of, you're talking about an $18.5 billion stock i do like ford here.
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>> we're just getting started here on "fast money. here's what's coming up next. >> chinese stocks bouncing back in a big way with gains across the board. so how should you trade the group? >> plus, put your seats in their upright and locked position because this stock is taking off. boeing flying high on the back of some strong earnings. otore got that and a l me when "fast money" returns. why not both? visibly diminish wrinkled skin in... crepe corrector lotion... only from gold bond.
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welcome back to "fast money. check out the rebound in chinese tech stocks, the internet snap more than 10% for its best day ever so is the route in these names
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over we can't ignore the fact that chinese regulators called a virtual meeting with major bank execs over there, and they really showed concern that these market losses were steepening. >> well, they appeared to, and there's some talk that they were in the market buying and that their version of the plunge protection team was hard at work you know, look, i spent a lot of time investing, i talked to a lot of colleagues and former colleagues over the last couple of days. i don't think anybody at the end of today is like i missed the bounce here and i feel better. i think you've had an enormous move lower i think china's need to control the digital economy and actually control the digital is something that's going to force them -- it's head on to a dynamic where i think a lot of these tech companies don't feel like they're given room to move, so i think you've seen some exodus from traditional mutual fund
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investors, i think you've got dedicated folks, but they're probably going to spend more time focused on india, south korea and other markets. do i feel better today the price action is great. i have a lot of exposure in this part of the world, but i don't think that you've suddenly gotten the sense that china is now going to step back they are motivated, and i think xi jinping has cemented his role as dictator and ultimately that power control means i don't think they care as much in the short-term. >> we have to give kudos to two of our "fast money" friends, who are are, cart who both separately called for a major bounce in chinese stocks look what we got today steve. >> whenever you think about china and chinese investing, you always think about the numbers are what they say they are so we've never -- even though we question them, price action as guy likes to say is true so if the stocks go up, if they say the numbers are great, then
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everything's great right now they have a vested interest in trying to clear the deck i don't think the clear the deck is over yet. for me how can you buy it yet? it's still early so we're talking about technicians, technical move is a lot different than a fundamental move, but both of them can obviously make you money so i do agree they were grossly oversold, but to dip your toe in the water when you don't know what the next headline is tomorrow or five minutes, i couldn't. >> think of how many investors thought when alibaba paid that gigantic fine last year that things were clear for that stock, and with every headline now, pete, you see alibaba shares move lower. >> yeah, yeah, it's pretty amazing, mel, quite frankly, and yeah, the selloff has been extreme, and we've all been watching it closely. if you're going to play anything outside the united states, specifically chinai, i do like
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and prefer to be in the options world. we did have a lot of kweb buying, a lot of fxi buying as well they were looking for a little bit more time for recovery that's the only way i would play it you might even avoid -- normally i wouldn't say this, i'm not a big etf guy, but i think in the case of china, i would be more interested in the fxi or kweb versus some of the individual names just because it's just so difficult right now. now, nio is one of the names i have owned i own some calls in there right now, but i will not own these stocks i'm trading only through the optio options. the headline risk is too high. >> great job by carter and christopher. 180 was the low in march in earnings next tuesday, i believe, baa baa for the first time in a while might be interesting for a trade here. >> coming up, gaining altitude, shares of boeing taking off on the become of a surprise profprofit and cme group ceo terry
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duffy will join us to talking earning stocks and more. you won't want to miss that interview. we're back right after this. like you become an agent of innovation with invesco qqq
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shares are sharply lower in
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the after hours, seema mody has got the story. >> shares of uber falling a block of 45 million shares being offered by goldman sachs, that according to bloomberg this would be an equity offering that would thereby dilute existing shareholders. we have reached out to uber for comment, and yes, we are looking at shares of uber down about 4% here in extended trade melissa. >> seema, thank you. seema mody, guy, what do you make of this headline? >> i don't know what today is, the 28th or something. august 4th you're making a face i'm asking a question. >> you have a calendar app, so check it. >> i'm looking at it now, august 4th would be next wednesday, not tuesday. wednesday. why do i bring that up because uber's going to report on wednesday this is how my mind works. if earnings are going to be great, they would wait in my opinion until around that time to have a headline like this come out why would you do ahead of earnings that's just the way -- not saying anything, that's how i think, though. that's a trader's mentality. the more you know, the more you know put that music up.
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>> you think about the worst-case scenario conspiracy theory-esque explanation. >> what's today's date >> like i said, the 28th. >> i look at a couple of dates back in november of 2020, it looks like the chart is rolling over to those levels so not to be -- so maybe i just caught his pessimism, but when i look at the chart, it's definitely a continuation of the roll here. so i'd have to agree that this is a setup that is definitely one for the bears. >> pete, why don't you weigh in? >> what date is it, pete >> no, not all that. pete, don't laugh. that just encourages them. do not laugh answer the question, what do you think of uber? >> i'm sorry sure you know, i actually own calls and hear mel, and i'm a little disappointed that i do because i've tried to teach myself not to be involved in this name because of the fact that they still have not proven to us when they all tell us when they're going to start making money, but they need to start making money.
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they're not, and that's sort of one of the biggest problems i've got with the stock that's why i'm in the options, not the stock itself i've got to tell you something, it's story lines like this that hit, and there will be some other story line there's all kind of reasons for people to have pressure on this stock. right now when you look at it against some of the other levels like steve was pointing out. 44 bucks, that seems like a level we've seen before. we've tested it. i think there's a lot more room to the downside. coming up, cme group ceo terry duffy joins us exclusively on the back of posting better than expected results today. we'll dive into the earnings, the rise of the retail investor and much more. the earnings keep on coming, amazon is on deck for tomorrow we'll tell you how options traders are priming for this report "fast money" is back in two.
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and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business... you can pick the best plan for each employee and only pay for the features they need. welcome back to "fast money. cme group posting better than expected earnings this morning the company is up more than 17% this year. joining us now for an exclusive interview, cme group chairman and ceo terry duffy. he's also a friend of "fast money. hey, terry, great to see you. >> thanks, melissa, appreciate you having me. >> trading volumes sound like
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they were driven strongly by ad futures as well as treasuries, and i'm wondering what you foresee in this quarter and what you've seen so far this quarter because we've seen some pretty whip saw action when it comes to the moves in treasuries. >> we have, melissa. you know, we're up exponentially in our interest rate complex, which at these price levels one would probably question how could that be, but we are. we listen to chair powell talk this afternoon, but i think there's a lot of confusion, even at this low interest rate environment that we're at right now. where can it go? can it go much lower when you look at real interest rates, are they essentially negative, and what does that mean for the economies i think there's a lot of people trying to position themselves. we're looking at, you know, huge increases in the back month of our dollar options contract today of open interest, of positions staying open a th there's a lot of information that people are concerned about right now going forward in the rate markets.
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>> not only a participant in the show from time to time, but he's an avid viewer. >> every night >> every night >> it's crazy, i love it it's fantastic. >> i don't know what pomp is i'm not really sure what circumstance is, but there's a lot of it going on here at the nasdaq because tomorrow robinhood's going to list. thoughts on that ipo, potential headwinds. thoughts in general about the retail investor. >> you know, guy, thank you. i think the retail investor, it's really interesting with the ipo that's potentially coming with robinhood, i think the price is somewhere between 38 and 52, still a pretty broad range going into tonight, so we'll see where that shakes out tomorrow you'll have a market cap somewhere, around $36.5 billion. so pretty sizable company coming out. you know, it just goes to show you how many people want to be in control of their own destiny when it comes to trading and i think that's actually a really good sign i think one of the things that not only robinhood and maybe some of the other brokers got to look at from a headwind
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stan standpoint, is there's a whole lot of concern or question from some of the regulators, as you know, especially from the s.e.c. around the payment for order flow and what does it mean going forward. i think that's one of the things that they're going to have to try to explain to potential investors going forward as long as other people are as well. this whole payment with the addition of reddit and some of the game stock trading people have really taken notice to market structure. one of the things they've taken notice of is payment for overflow so i think that will be very topical when it comes to the ipo and beyond. >> in your opinion, terry, is that something that is broken about the markets? is that something that needs to be fixed do you think that retail investors are getting best price as well as best execution? >> okay >> you know what, i think the retail investors, what they want is access to the marketplace and they want to make sure they can participate like everybody else, and they are getting that access not only with robinhood but with other platforms around the world
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and having that direct access. that's something very important. the whole payment for order flow, there's so many pros and cons to it, melissa. i don't think we have enough time in this show or any other shows to debate this on live tv. it's going to be something that's going to be around for a long time to come unless the regulators intervene and make a decision on, which i don't think they will in the near-term it will be a headwind. it's going to be out there for conversation. >> with the rise of the retail investor, terry, cme has launched micro futures, and i think it was your cfo who said it's $100 million a year business from nothing a couple of years ago, and i'm wondering if you get a sense, you know, it was launch and the thought was it could be a retail product, but it could also be hedge funds. i'm wondering who is using this product, where you're seeing the most growth. >> across the board, melissa it's really interesting, i said on the call also today that because of the price growth of some of the products that we list for trade, take the equity markets just in general, look at the value of the s&p 500, where
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it's at today versus where it was at when cme first listed it back in the early '80s the growth of the value of the s&p 500 is unbelievable, so people need a little bit contract to manage we created the e mini and went to the micro in the equities, and we're doing the same thing as it relates to the cryptocurrencies with bitcoin, west texas media, think about where the market was a year and a half ago, west texas intermedi intermediate, that's been a market that's got alot of interest people want to participate in that market on both sides from the commercial and the retail side we want to offer them contracts that allows them to do so. >> hey, terry, it's tim. so right, the microtreasuries, the wti future, the new products were clearly evident in your numbers out today. i think for investors the
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question is really is there more growth coming? it's a finely oiled machine. you guys have evolved in the environment, and the question is i think on top-line growth and ultimately profitability can you talk about that? >> tim, it's a good question, and obviously it's always hard to predict volume. we're very tractionally driven on our revenue roughly 75% of our revenue are derived from transactions. our data business has gotten much bigger. it's a whole new constituency of participants who are trading our markets who never did before we acquired the next businesses four years ago you're talking about 150 bank participants that never traded futures before that are going to have access to futures in a very short period of time being on a single platform. so there in and of itself is the great growth perspective you don't need just retail to grow you have to constantly introduce commercials into your marketplace and then in return retail follows and also the
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market makers will follow as well so hard to predict the growth, tim, but at the same time, i think we're goidoing a lot of things that create the capital efficiencies that make platforms. >> we'll have you back. >> melissa, i only have one question for you, what day is it >> see, he pays attention. he's got to get the -- >> and don't laugh at him, no encouraging of this. terry, good to see you, thank you. terry duffy, chairman and ceo of the cme. what's your take on this stock >> let's talk technicals first, so the bigger the base, the higher in outer space. that's one sort of so it's been building a base since about may around these levels i think that you can blast out of here. you're getting aggravated with just guy or guy and me >> both. >> thank you. >> i think you can move substantially higher from here the retail investor is where the
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puck is going, and he's doing all the right things to cater to that investor and grow his transactional base. >> that would be the longer the base the higher in space >> that's what i said. >> she's into partenon as well >> amazon is on deck to report tomorrow after the bell. should you add this e onto your cart we'll have the options action next icy hot. ice works fast. heat makes it last. feel the power of contrast therapy, so you can rise from pain.
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you've got more on that uber story we brought you earlier, deirdre bosa's got it. >> hai'm hearing from two sourcs familiar that this is soft bank selling a significant portion of its uber stick to make up for losses that it has seen in chinese ride hailing company didi remember that didi recently went public and amidst the crackdown from beijing has lost a lot of its value. stake has decreased by about $4 billion, so when i'm hearing is that soft bank is now selling a substantial portion, 45 million shares which represents about one-third of its uber stake to make up for those losses in didi we will get more details when they file the -- but for now, sources are telling me this is
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soft bank going to market. >> deirdre, thank you, tim seymour, we were talking about the chinese crackdown, you mentioned softbank specifically. and we're all wondering who would have felt the most pain with this massive liquidation of chinese tech stocks and here softbank is feeling some pain apparently. >> >> yeah, no question, and there were a lot of questions of were there big accounts. in this case these guys were monsters that felt the pain in a couple of recent blowups not good news also you don't necessarily sell something you're feeling good about as a function of something else you lost, and i don't think this is, you know, a margin call per se so it's concerning, obviously, core shareholder, somebody who's been there from the beginning taking some chips f e ofthtable. i don't like that news. up next, final trades. ♪♪
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a world of possibility opens. ♪ u.s. bank. we'll get there together. ♪ time for the final trade, tim. >> i'm expecting upward revisions on eps for ford, take ford. >> pete. >> microfutures, i'm going to go with cme group. >> steve
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>> general electric, ge, 21 and 21, got to believe >> guy. >> you see that amd there, sister i know you did >> that's it >> that's it back to you. >> thanks for watching "fast money. we'll see you back here at 5:00 for more "fast." meantimedo, n't go anywhere. "mad 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 is not to entertain but teach, put into context and we need that so call me a 1-800-743-cnbc or tweet me @jimcramer. everybody has an opinion on short sellers.


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