tv Fast Money CNBC March 16, 2018 5:00pm-5:31pm EDT
that's a big f and don't we have to take a risk >> the trade-offs are mismatches. >> i think corporate america is a lap dog for china. the market is too big. >> possible, but the idea of putting a price umbrella on steel as a mechanism. >> it is a weird battle to be fighting when you went want to win the i don't have all war. >> that does it for "closing bell." "fast money" begins right now. >> "fast money" starts right now live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders on the panel today -- item item, david daliberti, stephen clarke, and guy adami. there is one name the chart master says is about to break out as soon as next week when you see the chart you might be pressing the buy button, too. steve wynn is long gone he and his ex-wife can sell their stakes in the company.
can the business thrive. first we start off with the rise of the banks. in 2018 they are one of the best performing sectors the group moving higher today on the ten-year anniversary of the collapse of bear stearns look how far the banks have come the financial etf at prefinancial crisis levels this comes as congress works to decrease all the rules created in the wake of the financial crisis is there still money in the bank >> yes and tim said this for gooit quite some time. i think we have all said it for different reasons. my main reason is in '07 and '08. they traded at three times, three and a half times price to book that was ridiculous. at the trough of the financial crisis most banks traded below book equally ridiculous i think in this environment, interest rates where they are the banks should be trading closer to 178 or 1.9 times citi means there is significant upside for citi, even at goldman
sachs, who a lot of people want to shoot against still has upside as well base on that math. >> guy hit on 99.9% of the top ib, but you have to throw in there corporate tax rate. >> see you later show is over >> those are the tail winds. >> the .1% that we didn't talk about, that's probably 30% of the overall importance of this is the corporate tax rate, cut now you see the tail wind -- if you look at the xlf short that we flashed up there that accounts for all the regulation being taken off. that's not going to happen there is going to be some regulation slapped on to it. and there is not going to be 30/1 leverage anymore. that's a big point you are not going to have the upside that you had back then or the upside potential money can still go there but you won't see big bang for your buck anymore. >> i think of it as he would agree that bank prop desks are no longer a pea nile vehicle, and their sales and trading business is less profitable.
i think if you think about the core part of what a lot of investors would be looking for with banks, which is that the capital side of their business -- they are going to be giving capital back. they have less regulatory pressure look at the two year, it's at 9.5 year highs and look at libor. people want to talk about the flat yield curve not so good. but guess what, bank are becoming more profitable he have single day i don't think they have to go back to those valuations but i do think they are a din buy for a lot of the market that wants a valuation they can believe in. >> we've soon 20% returns last year and the year before in the s&p banks. will we see a similar year was that in anticipation of the points these guys mentioned. >> it was as a result of the positive chains. i think the incremental dollar is going into a financial or a tech when you are getting that money, that's where it goes i think we are at an important
inflection point political when you think about banks. from a long term structure from a political perspective, because a third of the senate democrats right now do support changes to dodd/frank that is supportive of banks and sort of their activity i look at that and say that's probably the bige tail win in my opinion for banks. and obviously the capital returns policies that citi and jp morgan all these banks put into place is making them bullish. >> originalal banking. the kre is up 8% it's double, outdone the xlf if you are looking for big banks to continue that ascent higher i think you are better off going with the kre versus the xlf, all things being equal. >> going back to prices. citi last, i think they reported in january, their fourth quarter, the book value of the stock was $1 the stock closed at $73. effectively trading book value right now. if you think 1.8 is ridiculous 1.5 is not, it's $35 i can do that math and that gets you a $105 stock
i think there is room left the stocks have run a lot but it doesn't mean they can't run more in this environment. >> citi bank has not really run. >> hasn't? >> citi bank is basically flat as much as i think the financials have been defensive during the last six weeks of this volatility, whatever we are calling it citi bank has been a lager. it has the most leverage in this economy. it is the cheapest, and i don't think they have gotten enough of the benefit of the doubt. >> you talk about the trading business and the profitability of the trading desk, i say volatility is coming back. definitely that plagued the industry for a long time. if we are an indication of what the rest of the world is going to look like i look at the issuance, off the charts i look at the volumes we are seeing at the institutional level. it's come back significantly if volatility picks up and m&a, it could be another tail wind.
>> is -- in a better position than morgan stai stanley. >> i don't think so. i hear what david is saying. volatility is god for banks. if you think about this ped over the last couple of months but banks are still firing people. i don't think sales and trading is a good business i don't think the margins are there, i don't think the edge is there. i think bank are going to be making it in positioning and merchant banking: it's been proving speed compression is a higher margin. it's predictable. >> i disagree. trading size has gotten more fish and technology oriented which helped us cut cost i look at the back office functionality which is going to be eliminated when you look at the blockchain implementation. includes the cost cutting. there is a tremendous amount of cost cutting that happened in this model. >> are you talking clan point of
view. >> i'm talking across the board. >> you think sales and trading is better off than it was ten years ago. >> no. but i think there has been a fat of cut out of the model and efficiencies created through electronic means of execution that offed a much more -- >> would you rather. >> you are cutting costs >> why do you insist on self would you rather i'm not calling for it i don't want to play it. >> somebody is doing their own would you rather >> fine, what do you want to do? give yourself your own choices >> the etf, or the kre i would be buyer of jp morgan. it has proven itself time and time again. >> do you know what i would rather do. >> what -- for more on where the key players of the bear stearns collapse are now kate kelly joins us, author of street fighters, the last 72 hours of bear stearns, the toughest firm on wall street welcome, kate. used to be part of the cnbc
family still is as a contributor. >> back in 2008, heck yeah i remember that like it was yesterday. >> jimmy cane. >> jimmy cane -- where are they now. jimmy cane retired and he has been laying low. there was a story in "vanity fair" in 2014 what he was up to. a chair on the charity circuit playing golf frankly, there hasn't been much in the also year other than he sued andrew lavthal for an outstanding loan into her business and said he is still worth $400 million in 2015 in that "vanity fair" piece. partly from the bear stock when the price was raised he is doing okay. >> warren specter. >> the chairman of a private credit investment firm that i was not familiar with until i looked into it today
bounded by some bear stearns alumni he executive produced a film in 2011 that was executive directed by his late wife from what i under he splits his time between martha's vineyard and florida. he left bear before the financial crisis really got going. the credit crisis was brewing. he left with much of his wealth intact. >> and alan schwartz everybody can remember that interview he did with faber on the brink of collapse. >> at the conference at the breakers and david confronted him with this question about how a counter-party didn't want to face him on a cds. and he didn't know about it. a deer this the headlights moments. he is actively making deals. he was known for investment. >> abouting and m&a. he is the executive chairman of guggenheim partners. a small investment boutique. their fingerprint, i was looking at lead tables are all over some
major deals. scripps tribune, the walt disney, 21st century fox deal. he is actively engaged. >> awful these guys were top dogs at bear stearns at the time of the collapse effectively and they seem to be doing a-okay right now. is it surprised looking back that none of them were charged with anything either by the s.e.c.er by prosecutors? >> two layers to your questions. there were 14,000 employees a lot of them lost their jobs. a lot were wiped out the stock was owned one third by bear employees that was devastating for many. orthopedic bear stearns employees were relatively better off than lehman employees because at least they got taken over boy a universal bank that was well resourced and they had an ier chance to look for new jobs. in terms of the criminal charges, that's an interesting question so there was a trial of ravel chi any and matthew tanin, who ran the high grade structured credit fund that
collapse in 2007, a year before bear itself collapsed and there was a question whether there was criminal securities fraud in the marks and investor communications they were acquitted. in terms of that it's well-known there have been almost no successful criminal prosecutions of financial crisis players. the only one is the credit suisse's mortgage backed securities assets. and he is still serving time but everybody else more or less got off. >> amazing kate, thank you. good to see you. >> you too can i add one thin >> of course. >> i was talking to a bear stearns alum today who was a great source of mine on the book he said in terms of my wre recollections the sounds of st. patty's day bagpipes will forever trigger ptsd >> that's kate's book "street fighters". >> first of all i want a signed
copy, number one >> i think that can be arranged. >> so the big argumentor the big question was can bear stearns happen again >> are we safe from another collapse the rollback of the regulations is that a prudent thin. >> there can always be another run on the bank theoretically. that's effectively what happened to tim's point, you said this now a couple years bank are sober capitalized now that the next problem is not going to manifest itself in a financial crisis. >> i also look, and i listen to this administration and hear them talk about regulation and deregulation all the time. i also hear them talk about the need for regulation in the banking sector i as someone who want to see some mod dumb but very happy the see a lot of the regulation has lightened up in the stli, i think it is a great balance right now. with great balance sheets. i think it's time to look at the sector. >> coming up, there is one name the chart master says is about
to break out. plus, a number of stocks in the s&p 500 has gone parabolic our traders think a couple of them can go even higher. we will give you the names as bitcoin collapses, the once loved bitcoin stocks are getting slammed but there is one traders are buying we will strain you are tcngwahi "fast money" from times square in fork city much more fast right after this. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management. you ok there, kurt? we're about to move. karate helps... relieve some of the house-buying... stress. at least you don't have to worry about homeowners insurance. call geico.
welcome back to foichl as the s&p climbs back from the february lows some stocks are going parabolic, soaring to record highs despite all the volatility for more we go to dominic chu. >> well of course i'm high on life, melissa, i get to work with the "fast money" team all of us here at cnbc on a daily basis, yes i'm high on life the overall market seems to be in a consolidation phase there is a 50 day moving average in the s&p 500 there are a handful of larger cap stocks that found a way to get back to recent highs and extent themselves above their longer term trend prices we looked at a s&p 500 turns out there are 40 stocks trading within 2% of their at least 52 week highs or per among those, half of them, at least 20% above their 200 day
average price. among the stand outs in that list of 20 companies payments network mastercard. enterprise software company sales force.com 26% above that trend line our screen wouldn't be complete without some of the red hot chip stocks nvidia, 30% above the 200 day moving average and adobe systems now 34% above its trend line thanks in part to a robust earnings report traders have a lot of different ways to characterize momentum. this is simply our way of looking at it. back over to you guys. >> thank you dom it's friday. we like to play games. >> we do >> we are going to play a game right now. are these stocks high and going higher or are they too high? higher or too high do you understand. >> do you understand that guy are they high or i going high. >> two choices
let's give this a whirl. master scarred going higher or is it too high. >> going higher, mel >> why. >> if you look at the payment systems they are well positioned also attached to consumer growth i think consumer credit is alive and well mastercard going higher. >> i agree this is a company you can put your kids' money and their kids' money in and grandkids' money in steady eddie going to continue to move up and to the right. it is a god long term solid flight >> going higher. long term trends are undeniable. it's still moving higher >> do you understand how to play this game now? are you ready to chime in. >> is it going to tap out or continue to move up? right? >> give it a try. >> which one. >> mastercard. >> yes, mastercard. >> you have been bullish on them since the inception this show. it's going higher. >> higher. >> highering monte >> i had my doubts but you did it. >> it's only a half hour show.
sales force, tim >> too high. >> it's not going to go higher >> too high. i think the valuation has always been a question. and therefore you could have said that a year ago and been very, very wrong i think you are getting to a place where people understand there is a lot of competition in the software space i would rather own oracle here. >> i would say it's going to continue to go higher. great execution, international growth i mean, the company just put up a great quarter. and ai investment. i mean this is a company moving in the right direction. >> nice die veggence of opinion there. nvidia, grasso. >> higher. without question equity he connected houses, connected cars, connected lives. people are using their lap tops and cell phones. everywhere, it's going higher. >> connected lives >> we are like connected, the five of us tonight no sorry. adobe. >> no, no. >> oh, nvidia?
i'm trying to play the game. >> fine. do adobe do whatever you want today i'm through with you i'm through with you adobe. >> who sits next the me from time to time going to be on the next show, dan nathan. six months ago i said if you like amazon you have got to like adobe and he article ed look at it now, all time high. last quarter, 42 operating margins better than expected >> what does it mean higher or too high. >> higher. >> he's having trouble here. >> it's friday >> steve wynn now cleared to sell his stake in the casino giant he founded where does the company and where does the is to stock go from here. >> higher. >> different game. be quiet we are going to break. i'm melissa lee, you are watching cnbc first in business worldwide. in the meantime here's what is coming up on fast. >> i am not a role model. >> neither apparently are a number of top nike executive as
the dow own andent gets rocked by a series of high-profile depart yours what it means for the stock. plus, bitcoin is getting pummelled. but there is one bitcoin stock that surged to a 52-week high. we will give y touhe name, and how to profit, when "fast money" returns. ♪ ♪ wake up early, o. ♪ slap on some cologne ♪ i'm 85 and i wanna go home ♪ ♪ just got a job ♪ as a lifeguard in savannah ♪ ♪ i'm 85 and i wanna go home ♪ ♪ dropping sick beats, they call me dj nana ♪ ♪ 85 and i wanna go don't get mad. get e*trade, kiddo.
>> welcome back to "fast money." shares of winery sorts lower today but they have been climbing above the lows made after wynn faced sexual assault allegations. now wynn and his ex-wife are free to sell their remaining shares of the company. what does it mean. >> you have got to know when to hold them and know when to fold them they fold them over business agreement.
they kept them bound to each other long after the divorce was granted. the shareholder deal kept them from selling their shares without the permission of the others last week they settled with with wynn resorts and withdrew from the shareholder agreement. and yesterday a judge ordered the deal dissolved between the couple they own roughly 21% stake in the company. a massive selloff could make the company a target for a take oef. i sought saturday down with matt mat objection a week ago have other companies made offers to buy wynn resorts either in whole or in part >> we have had no offers to buy wynn resorts. >> would you entertain offers the buy wynn resorts >> as the ceo i have the fiduciary duty to entertain anything but i can tell you we are not for sale and to break up the company that also makes no sense.
to pursue strategic alternatives at a time had he the business is not in trouble is a mistake. >> steve wynn was prohibited from publicly selling more than a third of his shares in any quarter but under certain circumstances excel them privately. analysts point out wynn resports can purchase the shares. matt maddox was described to me as being a whiz at capital markets. is that the place where he is going to put wynn resorts capital. >> talking about steve wynn buying and selling his own shares of the prish yens purchase he made of his own shares had. >> the wynn bottom. >> in 2015. >> the stock was in the 50s. >> it was in the high 50s then. >> to a. >> what did we think about him maybe selling shares now. >> if you loved getting in with him when he was buying shares by
definition you start selling when he is selling my pushback would be he did that by choice then i don't know if he has a choice now. i think the shares are going higher and by the way, this is contessa's first time with us here. >> welcome to the "fast money" set. >> in person, and she did it on her birthday >> i know. on her birthday. happy birthday contessa. >> announced to everybody. >> quickly and when. >> all the charts look similar, ironically, but i think for wynn the worst is over. i would be a buyer with him selling it >> contessa, unk that happy birthday to you. >> final trade time. tim. >> diageo. >> i think if you look at guinness it is a company that's going to be positioned >> dock horton is the name that i love >> alibaba it's going higher. $200 last print shl it's going
higher. >> we have got the greatest pages. she is going to morocco for a couple of weeks. then she is coming back. wynn resorts will get you done mel. >> thank you for all you have done, karen. see you back here monday at five don't move, "options action" is straight after this break. better world for investing. let's always put investors' needs above our own. as investment management professionals, let's measure up. cfa institute. you or joints. something for your heart... but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember.
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hey there. we are live at the nasdaq marketplace on this expiration friday the guys are getting ready behind me. while they are doing that here's what's coming up on the show. >> it's got to be the shoes. >> shoes. >> shoes. >> actually it's the high level executive depart oous weighing on nike shares we will tell you what it could mean for the stock when it reports earnings next week. plus -- ♪ another one bites the dust. >> pretty much sums up what's going on with bitcoin. that crushed a number of bitcoin stocks, except one we will give you the