tv Fast Money CNBC January 18, 2022 5:00pm-6:00pm EST
matures. >> i want to say congratulations to my best friend, lauren, who had a baby today i know she's watching it in the hospital that's why i'm mentioning it. we can end the show on a good note. >> congratulations from all of us at "closing bell. what a great note to end the show on for this evening "fast money" picks up now. ♪ tonight on "fast money," there's much more pain ahead for the major averages and maybe your money just how much further he says some stocks can fall and what moves he's making right now. the shares of amc completing their round trip back to earth is this the end of the reddit revolution plus, oil and gas burning hot again. energy, once again, outperforming the overall market after this big run, really just how much gas is left in the tank welcome, everybody, this is
"fast money. i'm clearly not melissa. i'm brian. she'll be back soon. tonight's trader lineup, perfect for a big market day like today. all right. we have got a lot of really interesting stories and pieces of news to get to. let us begin with the macro markets and your money another tough day for big tech the nasdaq getting whacked, down more than 2.5% now at its lowest level since october. the index, now down more than 10% since its november record. the s&p and the dow dropping sharply to begin their trading week random but interesting, 109 s&p 500 stocks are now down 20% or more from their recent highs meaning roughly 20% of that index is technically speaking in a bear market. there are two big reasons. the sell-off and the shift, number one, earnings and guidance, overall, haven't been
great. also inflation the spike in ten year yields, borrowing costs, they're going up and up. big tech gets hit hard as rates rise because valuations are higher look at the moves lower. names like meta, alphabet, and microsoft. let's start there. more losses for big tech the names that i don't need to remind you control all the major indices and most of the danger etfs anything you look at that says we can find support and right quick? >> i love that random but interesting -- somebody should do a segment on that on a show it would be brilliant. can you find support absolutely obviously you mentioned some of the names. there are other names that are down 25 to 30% the only thing that's changed is this landscape that you set up the show with, and that's rising rates. i'll go to my danger will robinson section of the show and i find it in the form of two
things, brian, the russell small cap index which theoretically should be off to the races in a rising interest rates environment suggesting that the economy is doing than most names. no we are now below that 210 huge support level. keep an eye on that and the xrt testing huge support around 80 those are things you need to watch. will we find support in those names you mentioned? yes. but the generals are the last to go and we haven't seen that sell-off at apple yet at all >> yeah. tim, the nasdaq closing below its 200-day moving average for the first time since april 21st of 2020. that was, of course, that massive pandemic-led sell-off over a couple of weeks a lot of the comps that we're starting to compare now to, not only with this, oil prices, whatever, are starting to go back prepandemic >> yeah, this was not turnaround tuesday. this was turn down tuesday
if you think about the qqq, the nasdaq, it's underperformed the s&p by 8% in the last six weeks. if you look at the nasdaq and where it had not hit the 200 day since -- go back to june of 2019, if you really want to throw the pandemic out the window and really then before that was back to august or september of 2018 which really hit its peak around the fed, you know, moving higher on interest rates. we know what happened at the end of the year in 2018. and i just think today's move is as much about that parade of fed stars that spoke out on thursday and i think, you know, the short end of the curve is more interesting than the long end of the curve. look what they did to the two-year note, over 1% for the first time in a couple of years. we have a case here where we heard on thursday whether it was three bid, four offered, those are the rate hike scenarios that
we're now equating in 2022 not '23. at least based upon the fed that spoke the other day. whether the fed can execute on that, i think is really the big test they can say all they want and we've been wanting the fed to at least give you some indication that they're going to do this a long time ago. and it's an asset bubble that i think ultimately will still support value, cyclical, commodities and even banks but the divergence between banks and, you know, what i think the fundamentals are is especially as rates go higher is probably creating an opportunity. >> you know, dan, obviously, tim hitting on the rate story, a massive part of it i wonder looking at notes, listening to analysts, strategists, the earnings that we are seeing have not been that great. the guidance from companies have not been that great. delta air lines, some of the big banks, i know rates are sort of getting all the blame and attention. is there something else at work
here, though >> yeah. it's decelerating growth and what we're willing to pay for it, i guess, is really the thing. we're anniversarying these really easy comps year over year if you think about 2021, of what they were compared to in 2020. we had this black hole in 2020 listen, with rates going up, i didn't take a lot to get investors to revalue some of the largest growth names in the market and we've been seeing this and talking about it on the show for months and months it feels like a year where the highest valuation, the highest growth, but the least profitable sort of names were getting killed look at what's down, crypto is down 40% those are the big ones look at what's going on in spac land it's devastation so, you know, there's been a lot of really bad action under the hood i'll say this, the question that you asked guy, what do you go to where is support look at microsoft. it's down about 10% from its all-time highs there's more room to go. if it gets back to 280, which
would be a great technical support level, probably a very reasonable valuation level, that's where you want to buy that i'm going to play a game guy says 157 in apple. that would be a down -- at least 15% from its recent highs. amazon, if you see that below 3100, near 3,000 support, google, alphabet near 25,500, then you have 15 to 20% decline from the biggest names in the market and you buy the qqq, the nasdaq 100. those four stocks make up 30% of the weight and we know about the devastation in the index and all those other names that are down 50, 60%. to me, that's the trade. you're probably going to have that opportunity to buy the nasdaq 100 probably five, six, seven percent lower over the next few weeks >> bear with me here, i'm going to talk a little tom brady i feel like the market is a little tom brady-ish
for 20 years, whenever he's down in a big game, you expect him to come back. call it the derek jeter market, if you want. you think, don't worry they're going to come back and, by the way, the qqq, the nasdaq 100, every time it's been down, 2018, 2020, 2014, it has come back to dan's point we're right on that 200 day moving average do you feellike it's going to be a brady-go market yeah investors are going to buy them again. it will make a comeback. >> listen, i don't want to talk about tom brady after what he did to my eagles this weekend. it's a little bit of a sore spot i see where you're going with that dan stole my thunder a little bit. i think what's going on right now in the market actually creates an opportunity in big tech i think it's going to take a little bit more time to play out, but i think we get back into say sometime in the second quarter and all of a sudden you're going to start to see data decouple from the rising rate and four to five rate hike
expectations that the market is currently pricing in then i think you're going to have a big opportunity to buy the microsofts, googles, apples of the world possibility down 10% from where they are today. i think that's going to take time you have the narrative of, maybe we're going to get a 50-basis point in march maybe we will, maybe we won't. i think that's starting to steep into investor psychology bond yields usually peak when positioning gets extreme we haven't seen that yet flows aren't that weak there are people betting on rising rates to see a big paem peak in rates. that's why i think technology is a risk to the market on friday we talked about this risk from the top issue, and i think it's still there you have the percentage of nasdaq 100 stocks above their 200-day move average, somewhere around 50% right now weak internals and we've had a lot better breath under the surface to
support the overall market i still see risks there. we always talk about meyers soft i think there's probably more room to go on the downside and then facebook, google, just getting to that 200 day moving average. for me, i don't think it's going to be enough to prop up the index over the next couple of months. >> staying with football, guy, we saw what happened to jalen hurts and murray last night. these young quarterbacks have been a tough time. and i bring it up for this reason, people ask me what's the greatest market list now, and i say listen to you. but i will say this, there are probably 30 to 40% of hedge fund managers and investment advisers who have never managed client money in a rising rate or inflationary environment you got to go back ten years to really find that extended period and guess what, you get out of college at 23, 24, you're 34, 35 years old right now.
and i wonder if it's going to be that -- do people just make mistakes because it's a new thing? it is the eagles, sorry. >> listen, i mean, jeff mills -- not to cosasts a pirgss. if you believe in the mantra, don't fight the fed, when we're talking about the fed adding liquidity and by fighting the fed you're being bearish, by fighting the fed now, if you think about it, when they've completely turned course correctly, by the way, in my opinion, by being bullish now, you're effectively fighting the fed. to answer your question, many of the participants in the market have never had to fight the fed on this side of the equation by the way, maybe this market is more virginia tech of a decade
or so ago when they were everybody's darling, only to fall into obscurity the last eight or ten years >> i think guy's audio is going -- guy, are you there? >> okay. just quickly before i go to dan. punching me in the gut it hurt. it only hurts because it's true. tim, is there anything to that, though this could be a completely different macro economic environment. rising inflation, rising rates anything we have seen in more than a decade? >> deep breath it's deep breath time on the show i think, look, i say this all the time more fed equals more volatility. the last time you had central banks trying to take liquidity out of the market was 2018 that was the last down year for markets. at some point, there's a limit to what the fed can truly do there's also a dynamic here. look, we really truly get past omicron and i think markets really properly reopen
we have global cyclicality do you think the economy is going to be significantly weaker when we remove this headwind i don't. we could test it as i said, we haven't really properly done that when you remove omicron all the way back to 2019. i do think, you know, look at a lululemon with a 20 rsi, nike with 20 rsi, again, these are relative strength indicators it just means that things are oversold they can be quickly -- that can change very quickly. but i will point out that there's been a dramatic move here and i don't expect the sky to come falling tomorrow >> that's a good news. some comfort there, that deep breath moment as you said. let's move on. your next guest sees more pain ahead for tech stocks. dan, you just heard our commentary let's take a deep breath,
everybody, and let's do that we're only back to three-month lows we're still triple where we were five or six years ago. what do you see as the main risks to this market right now >> yeah, first of all, brian, i think i've been nodding my head like the whole segment so far. i agree with a lot of the comments being made. just to be clear, we'll get into the risks, i think tech is a risk but we've had such a tremendous move, a lot of this has been driven by the move faster in rates. we've seen this movie before these things don't go in straight lines i wouldn't be surprised at some point to see a little bit of a reversal here. i think when you get back to the real risks, not just that are going to define your portfolios over the next six months, if you just think over the next ten years, you know, the key risks that are going to define your portfolios, i think, really, come down to how are you going to position relative to the bubble we're seeing in markets and relative to interest rates i think those are the key risks
that infovestors need to be focused on and i think there's both of those represent huge risks that we haven't really scratched the service on what those are going to do to pe people's portfolios. >> what do we do then? give us some actionable advice, dan. >> if you look back, probably the most comparable period, you know, obviously a lot of differences was the tech bubble to what we're seeing today if you look back then, i think there's a couple important takeaways. first of all, the first takeaway, it's never too early to sell. tech stocks were basically doubled the last year of the tech bubble. but i didn't matter. if you were out during the crash, you made your money backhand over fist by being out of that risk markets on a three year basis, five year basis. i didn't matter. it's never too early to sell the
bubble the second big takeaway, the only way to protect from a bubble, is to get away from it there's a lot of people out there advocating that you can buy, you know, movement to the steady cash flow names, the subscription names, the cheaper names, the established leaders, the future technology winners. if you go back and look at how that worked in the tech bubble, they all went down if you think about, there were 63 stocks in the tech sector at the peak of the market during the tech bubble, basically they all underperformed they all wentdown more than th market, even if you think about future winners like amazon, amazon was down 96%. it wasn't the exception. it was the rule. >> dan, jeff here. i think really important question with so many investors getting passive exposure to the broad market can the broad market continue to rise without technology at its back >> you know, i think it's a really good question, jeff i would say in the near term, it probably can but i think, you know, the reality is, i think there's massive downside risk.
i'm talking about a bubble in what you could argue, you know, reaches out across almost 50% of the market so it's hard to think that you're going to see a bubble deflate in that huge portion of the market without it taking down the overall indices i completely agree that when the bubble does collapse, it's going to take down the major indices away from it that's not to say that there aren't opportunities what happens in a bubble, like, people focus on the negative but it creates vacuums and scarcities of capitals in other parts of the markets we have a saying, returns are greatest when capital is scarce. you create massive scarsties of capital, that's where the opportunity is you want to be careful when owning the broad market. just think, during the tech bubble, stocks were up over 40% when the market was collapsing. >> good points almost deep breaths in a way
thank you. dan nathan, your take on what dan suzuki had to say. >> i like that he agreed with all of us. i will say this, if you've been watching "fast money," i'm sure our twitter is lighting up, saying the "fast money" bros are all negative here. i think that the reasons that we've been negative of late and maybe some less than others is all the reasons why the market is going down right now. and so, you know, all the stuff that kind of creates volatility to tim's point is going up we have a rising dollar. we have rising rates if you go back again to at last time where fed funds in late 2018 got to 2.5%. we're basically at zero. we're starting to see this volatility if the fed were to kind of aggressively start to hike, then you will see the stock market. you will see the s&p 500 down 20%. you know why i know that we had that happen in a great economy back in 2018 and i don't think we're in a great economy. i think we're in an economy that has been propped up by trillions
of dollars of stimulus with monetary and physical of late and the valuations in almost every risk asset has gone haywire. we're due for a correction of that sort of sentiment so that's what's going on right here i don't think anyone needs to panic. dan's point, you can sell down, you can sell there stocks are not going down 96%. it's not 1999. it's not 2000. one thing that might be really healthy is a correction of 10, 15, maybe 20%. put a little fear back in risk asset holders and that's probably what happens here in the first half of 2022 >> a little tough love in the market thank you. we have got a lot more to do coming up, a breakdown, goldman sachs gets hit as earnings disappoint we'll have more on why the big banks are spending big bucks plus the deal of the year so far. microsoft buying activision for over 68 billion.
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welcome back to "fast money. goldman sachs investors got a bit of a gut punch today shares fell 7% you had earnings disappointing in part because of higher expenses they got to pay more to keep that top talent. get ready. morgan stanley, bank of america, other big banks are on deck to report their earnings later on this week. tim seymour, how do you read it? how should we look at these names heading into their earnings >> well, i think this is an overreaction but i think we expected banks to have some trouble going into earning season banks are still up 10% or so on average. so i think jp morgan's report after these numbers was don't throw the baby out with the bath water. and, again, if you look at those numbers, they were excellent numbers. if we look at, you know, more of the investment bank-focused banks, of which gold man still is, even though they evolved
over the years slowly, it's really a case where capital markets remain strong. i think their sales and trading business, while down a bit, is still very strong. if you look it again, banks relative to themselves, not relative to the rest of the market that has people a little concerned now. so in other words, we know they're cheap. we know they're cheap to the market are they cheap to themselves goldman sachs, you know, 1.1 times tangible book. hardly expensive even relative to itself in my view >> and i'm loving deep breath seymour today. the median return this year in, like, two weeks is an 18% gain let's be clear, goldman sachs is not a bank we call it a bank. it's an investment bank. it trades. they're not taking real deposits here i'm looking at mnt up 18%. companies that do -- i called it
this morning, boring but sexy because they take money and make loans. those banks are doing great. we got to separate how we use the term "bank," do we not >> yeah, i think that that's exactly right. if you look at the way just large banks verses regionals are trading, it's clear what's going on if you looked at jp morgan, bank of america, citi, none of these banks broke out to new all-time highs. e the kbw, far more weighed towards these large cap banks, a lot more regionals in there. you saw the way they traded on friday same thing happened today. so i think there's a lot to what you're talking about and just to button up that point. if you look at, say, the blackstones of the world or blackrocks of the world, if my
thesis plays out that later in the year you see interest rates actually back off a little bit, those are the names that are going to win and those are the names that have been losing by a lot. you throw in there s&p global, cme group, i think some of those financials can be interesting in the second half of the year when the fed is unable to do what the market is currently pricing in. >> tim, your take on the banks -- or guy, rather. sorry. >> tim, guy. at its zenith, jp morgan was trading close to 2.6 times tangible book. what's happened here, valuations are starting to matter when jp morgan comes out and reports a tangible book of $71, people are doing that math and what's the right valuation if you think it's two times, then you have $142 stock but i don't think you have a
stock that was trading north of 170 or so. and i think that's what's going on i will mention quickly, that these insurers came within a whisper today of a 52-week high and sold off late. names that are sensitive to higher rates you'll find that in the insurers >> guy, thank you. all right, it has been a very busy tuesday so far. but we have much more to come and here's what's coming up on "fast money" next. >> announcer: game on. some huge moves in the video game space as microsoft nabs activision for more than $68 billion. so is it time to level up on the names? plus, big energy oil hitting a seven-year high. can this trade keep pumping higher much me asmoy"omg or"ft ne cin up [copy machine printing] ♪
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we've had many conversations over the years about various forms of collaboration and as we've started to see the real competition and we're sort of at the beginnings of what the metaverse will be like and in that race for the metaverse, it started to become apparent that there were a variety of resources and talent that we needed for us to continue on that journey >> that was activision blizzard ceo bobby kotick this morning discussing that company's nearly $70 billion buyout by microsoft. obviously, the shares soared on the news still down more than 8% since july that is when the company was hit with a lawsuit alleging numerous accounts of sexual harassment and workplace issues they laid off more than 12 people over the weekend as well. for more on this deal, though, let's bring in jeffrey's analyst
who has been bullish and been right on the start, $85 target, a buy rating obviously, assuming the deal gets closed, andrew, you got to like it. are there any other plays left out there or is this a one-off by microsoft >> this solidifies the deal that it's a big media it has lots of growth and it's very real and going to be here whether it's metaverse or whatever we want to call it. and so, you know, obviously big tech might be interested amazon might be interested they have twitch they have their own streaming service called luna and a couple other big tech companies this has been thought about for years. microsoft pulling the trigger now, validates this entire thesis, it's a put up or shut up if big tech is interested in interactive media, they got to pull the trigger on microsoft.
but there will be such a lead, it will be too late. >> how about big media worried about, again, the lead that these companies are going to have on them it seems to me that you look at a disney or you look at even viacom, someone -- again, they probably can't put this kind of of a deal together because o their balance sheets right now isn't big media more in need of this deal than microsoft was who, again, has made great acquisitions already in this space. >> big media would fit in there. i only talk about big tech, to your point, it would be difficult to structure a deal that would probably work but, no, i mean, media, big media would be there, big tech should be there. we think there are more potential buyers than supply, right? there's really only three global -- globally scaled companies are strong ip other than activision. we think m&a may just be starting >> yeah, go deeper into that, if
you can, andrew. look at roblox my son plays it. and i think, that looks like the metaverse. maybe meta is interested in roblox, maybe google is interested in ea or apple in a take two interactive what other pair-ups, kind of have fun of it we're not going to hold you to it what other pair-ups could happen >> netflix started talking about gaming, if they're serious about gaming, you would think they would try to pair up with somebody probably something on the smaller size simple by at least they don't normally make big acquisitions you could see them acquiring some really good developer like a cd project or something like that why not add a game developer to it discovery has warner interactive. if you think about old media, traditional big media, thab may need -- maybe the other players like the viacoms of the world or
disney would feel like they need a studio to start building the gaming version of the ip they're showing on the big screens, small screens. there are numerous ways to play this at the end of the day it's activision -- it's take two, ea, ubisoft in france, unity might make sense when it comes to making games >> and you got buy ratings, i believe, on all of those great discussion, andrew thank you very much. dan, you got teenagers, right? can you see it you've got euphoria and maybe a video game stream here all on the same platform. hard to comprehend now, but, hey, stranger things have happened >> i'm like you, i'm a girl dad. my girls don't game. i would be more along the lines of what take two did with their acquisition of zynga maybe mobile, social games, make
some sense here. but i agree, roblox makes a lot of sense we're talking about valuation compression. maybe roblox, maybe unity at a certain place, just so you know, roblox was part of my aarp trade in honor of guy there. and i do like it but i guess it comes at the right valuation. another one, the small one might be skillz. we're getting to a phase where all of these names are going to get overturned a little bit. people are going to start gaming them out i don't think we're going to see a rush of more m&a right after these two deals over the last two weeks. >> i got it. i got to give guy a chance to respond to that. >> well, i mean, hopefully he's about a decade too early in his arbitrary given my current age who knows, maybe he's spot on. i don't know what i will say, jeff mills has talked about this for a while. roblox could be a name that we're not talking about as a
publicly traded company anymore, somebody has acquired them coinbase has gotten eviscerated, especially today we're at levels of support and mark mahaney has mentioned numerous times, coinbase he believes will be the bank of the metaverse. maybe there's a play there in terms of all of this >> got to figure it out. somehow this is all going to come down to a cannabis trade as well, if you pick up what i'm putting down that metaverse is something. coming up, high-energy trading. oil hitting a seven-year high. oil stocks are leading the market whatever happened to esg investing. plus, amc you later. all of its gains since may gone. is there any reason to own this stock again? we'll talk about it coming up. >> announcer: get your trades to go with the "fast money" podcast. catch us any time, anywhere.
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crude back to more than seven-year highs you got demand outstripping supplies, you have geopolitical issues heating up. energy stocks booming this year. tim, what to make of these stocks, these gains right now? >> fascinating on a day when exxon, the biggest of them all, or seemingly, has been, tells you they're going to be carbon neutral by 2050. it's also important -- i talked about 20 rsis. the other side of that spectrum are energy stocks which are up 20, to 25% this year and are trading rsis at 85 to 90 the momentum here, maybe it's just a short-term, they're overbought you hit what i've been saying which is that these are investments, not trades. these are companies that have figured out how to be cash flow positive ands actually even in a world where oil is significantly
lower, exxon has figured out how to be dividend at $35 oil, i believe, or so they tell us. i think this is a really interesting place for investors to be investing. but, look, you've had a big move on the charts, look at conoco, c chevron. a couple of these stocks might be painful in the short run. >> yeah, conocophillips getting an upgrade today from goldman sachs. they're starting to get some love and that's the point it was very easy to be antioil and gas and say, esg, whatever, when they were losing money. now these companies are starting to make money. in some cases, maybe making a lot of money i guarantee you, clients, investors are going to go to their advisers and say figure out a way to make these esgs sensitive so i can own them. >> it's very easy to ignore a
sector when it's not doing well. maybe overbought in the near term you got some consolidation i think there's momentum there for a reason you mentioned sort of the supply/dynamics. i think demand continues to grow this year. i think you have a situation where global demand will continue to grow i think spare capacity is somewhat limited and i think esg ends up being a tail wind for commodity prices less access to capital, higher cost of capital. i think you're going to end up having prices do some of the rebalancing here to entice more supply when you think about some of the emp companies or only services companies, there's a set up there. the setup to me, looks really good it's breaking out above the post-covid high. if you go out to earnings, only trading at 23 times. i think there are still opportunities even after the move that we've seen
>> and you're set up -- setting up, guy, so perfectly with that. i see what he did there, guy i don't think that was an accident by the general jeff mills, lobbing you a softball with a stock that you've been talking about for a while now. >> jeff mills makes no accidents. everything he does is extraordinarily smart and intentional. and, yes, i mean, i agree, halliburton, tim has talked about that for a while you can still make a compelling case that these stocks have significant room to the upside what we haven't mentioned yet are the geopolitical risks that can make oil go even higher than they are now things between russia and ukraine don't appear to be getting better any time soon and i do think something could happen post olympics with china and hong kong. all of which would be supportive of energy prices i thought crude would trade triple digits by the end of 2021 i think that's incorrect but we're going to get there
quickly in 2022. >> coming up, a painful round trip for many amc investors. the stock now under $19. this was a $60 stock less than a year ago up next, what can amc, if anything, teach you about the market right now plus, the gap, gapping down. downgraded at morgan stanley stick around with directv stream i can get live tv and on demand anywhere. look, serena williams... matrix... serena... matrix... serena... matrix... ♪ ♪ ♪ get your tv together with the best of live and on demand.
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visit indeed.com/hire welcome back to "fast money. check out shares of amc. they're down again in today's session. off about 8.5% this drop now officially wiping out all the gains in the stocks. a big run, all that attention last spring. dan, talk to us. not going to make light of it, a lot of people have lost a lot of money. is there a lesson here from amc. >> yeah, i mean the lesson is, is that there's really no financial movements in the stock
market it's not built that way. and so i know that there is a lot of community that was built in the wall street bets and i know there's a lot of people who learned a lot and we're knew to the markets, but just -- guy says it all the time just because you say you're not selling it, doesn't mean it's not going to go down when you look at amc, gamestop, round tripping most of the moves over the last ten months or so, gamestop still has a lot of room to go, and i don't know what the story is it doesn't make a lot of sense to me, i think the sad thing is these guys are going to continue -- likely to go lower and dragging a lot of investors who probably -- that capital would have been a lot more productive in other places >> yeah, guy, what would you do? you're teaching a class on amc or some of these meme stocks years from now what do you teach? what can we learn from this? avoid making mistakes again. >> listen, you know, they had --
they won they had the game beat in the form of both amc and game stop with some of the rises we saw in the stocks but there was this -- again, i've used the term misguided belief that as long as people held the stocks, they couldn't go lower and they, by definition, at some point would have to go back up look at adam aaron this is -- he's free to do what he wants and i'm sure all of these things were orchestrated in terms of filings. but the man has sold boat loads of stock since november. so to the extent that he's been your fearless leader, he may be, but he's been selling the stock as quickly as he's able to so what are the lessons? the lessons are, don't steal victory or steal defeat from the jaws of victory. and they were victorious for a long time. >> i'm sure a lot of people did make a lot of money. others hold on, diamond hands. m maybe it will come back. coming up, it is really a tail
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welcome back to "fast money," everybody. hope you're having a great tuesday. check out our call of the day, prompting some major selling in one mall name. morgan stanley downgrading the gap to underweight from equal weight, saying the company is likely to see earnings erosions, could continue for the next several years. you got higher costs, jeff mills, out there at your mall that you're hanging out there every weekend. what do you make of that call on gap? >> i think some of the stuff morgan stanley is talking about is this pull forward in demand you had people buy two or three years worth of stuff in one year i don't think the consumers necessarily in bad shape, but you're in a situation where you've had that demand pull forward and you have inflation which is still a problem you saw it last week in the data and consumer demand softens as you move through the year, especially as you see the
transition from goods to services spending, which i think is going to continue throughout the year, i prefer the high end. i think it's a little bit less susceptible to some of the inflation issues that we're talking about. i think you get an opportunity in lieu lieu lemon around 300, nike, 140. i would prefer to focus there in retail versus some of the lower end names. >> tim >> again, jeff points out the bombed out names that are much higher if you think about the gap, great for the folks that were bottom fishing near the lows of the pandemic restructured their business, got out of a lot of bad leases, figured out how to do digital business but, look, there's no way you're walking into gap and spending $60 for a pair of genes. they've trained consumers to walk in there to look for something to be on sale and half price. in an inflationary environment, i think they're going to be
promotional heavy and i think this is a company that struggles with their core brand. >> yeah. and also expenses. if you can get the workers, you're paying them a lot, you can't raise your prices but you got to pay your wages higher it's a bad combo. on the other side of the spectrum, look at kohl's that retailer jumping more than 4% but for this reason, an investor renewed its push to shake up the company's board. it spurred a big options trade that could point to some insider trading in the names. >> we saw four times the average daily options volume in kohl's and a lot of that was the result of the largest trade which was actually in the march 52 1/2, 65 call spread. that was part of a larger, more complex options trade and much of that was actually put on only a couple trading days ago, back on the 13th. if you take a look at the 13,
what you're going to see is that legion partners is actually one of the larger options holders in the name and legion's name came up last february when they were first talking about basically taking an activist position in kohl's so i think what's going on here is that these guys have been sitting around, they've been waiting to see if there's any action and then, of course, they had that one year where they were going to sit on the sidelines and i think these are probably some of the insiders who are basically positioning around the things that they're now talking about. >> really interesting. thank you very much. for more options action, as always, tune into the full show every friday, 5:30 p.m. eastern. your final trades are next it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position.
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big run here. >> dan >> yeah, if guy's gld can't go up in this environment, it's never going up again try playing with calls they look cheap. >> guy said enough >> sorry about ♪ ♪ 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 "mad money." welcome to cramerica my job is not just to entertain, but to teach call m