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tv   Fast Money  CNBC  April 11, 2019 5:00pm-6:01pm EDT

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and they've underperformed significantly for the market and not an impossible environment to beat. >> the market will extrapolate and seize it at the right time of the cycle to grab a hold of these big ones. >> tomorrow on "closing bell" the cfo of wells fargo will join us to discuss the outgoing ceo as well as the earnings tomorrow on "closing bell." that does it for today >> great to be here, and we're going to send it over to times square because "fast money" begins right now. yep. there we are "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square i'm melissa lee and our investors are mike tapper and guy adami and wall street is bracing for earnings season and there are two stocks that could be big winners and he tells us the name as it gears up for what could be a $100 billion public offering we will bring you all of the
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latest detail, but first we start off with disney's investor day which is set to kick off any minute the media giant is widely expected to unveil the streaming service and ceo bob iger is set to stage at any moment and it's rangebound, and a slew of analysts on wall street have been out with bullish notes in the past two weeks, and for what more we can expect from disney, julia boorstin and great to have you here at the nasdaq. >> great to be here, melissa. >> the streams service is front and center what do we expect to know about the streaming service when this is all said and done >> i expect bob iger to focus on the content on the platform. the premium plans show casing new original shows around marvel, star wars and national geographic which they recently acquired from fox and pixar and all of the disney content is there, including the vault 500 movies as well as 7,000 tv episodes from the tv vault and i think he'll be starting off
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talking about the content and then there are the big questions. we are hoping that he will announce a price tag there were a lot of expectations that we will get a price and he said it would be less than netflix. so we're looking at the $5 to $8 range and the $6 to $8 range and the specific timing and there are reports that will come out before november and by the end of the year, october, november would make sense in terms of getting it out before the key holiday season. >> you are talking to analysts and how do they assess what the total market could be with this? >> there are two things. the total market and also the cost and that's how we determine the value proposition here and there's some hope that disney's cfo will give expectations for how this will all impact the company's bottom line. the investment and content and the investment in the technology platform and what that will do to earnings guidance going forward. a lot of analysts are bullish that disney could very well reach the scale of netflix over the next couple of years and over the next ten years especially if you look at
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combining disney plus with espn plus as well as hulu >> that's what i wanted to ask you, do you think netflix and you covered netflix, and does netflix have too much of a head start? >> i think they're different services netflix is like basic cable. a little bit of something for everyone for parent, for kids, if you want to get sucked into a show like "house of cards" and documentary, there's really something for everyone and not as much name-brand content and they have established some familiar show, but they're not starting off with stuff that's of the name-brand recognition that you have on disney. so disney's really a family service and also it's going to be must see if you're a star wars fan they will have a live-action "star wars" show that will be so high production value and the same value as you would see on a movie theater and they'll try to suck people in who are true fans of their brands. >> julia, great to see you >> we'll check in with her later on as the meeting progresses and
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meantime let's trade disney and talk about the sentiment change that we've seen in just the past couple of weeks and tim, i know you're a shareholders. what do you think? is this warranted? this is a dramatic change. >> you could make the argument and i get trades in the range of 95 to 120? what breaks us out of the range? >> this is what breaks us out of the range. we knew this moment was coming, but if you listen to the street and you talk to analysts and people that are long the stock, i need a hybrid approach to value and i have the formal multiple and we start to look at even in netflix, so if you think there's room for more than two svod plays and no question there is, this is what they call the pivot that's a major catalyst to the stock and again, a multiple that trades at a premium to its peer group now has an additional reason for trading at a premium. >> streaming video on demand >> so cool >> there is room the skinny bundle will have a lot of other pieces to it.
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disney will be one of those. it's not going to be a netflix killer it will be in conjunction with that, but i don't believe that the price point's going to work. >> really? i don't believe the five to eight will work. it will be ten and high are than that why? because of how much they have to spend to make it >> netflix already raised its prices, so i think they have some flexibility on that side. >> it is positive for them, but i still think we're stuck in that trading range i don't think that this is enough to break us out of that 120 and i wouldn't buy it until it does break out of the trading range. >> i still need prf that the content strategy will be wrong i would much rather be in netflix and it's a much better play when it comes to streaming. there's a lot of potential when it comes to disney and they do have a legacy library of content, but i'm just really concerned that the new content isn't going to overwhelm >> netflix right now is in the business, and it makes its content and disney has a library
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and it's akin to the netflix acquisition of content disney has its own studio so it also makes its content, so why are you so skeptical that it won't compete against netflix when it has a proven studio with franchises that have proven to work like a star wars? >> i don't think anybody's content is close to disney's if anything, anyone has been licensing the old content and they lose the revenue stream >> i don't disagree, but we're talking about a streaming game here and a pure play on streaming is netflix so when disney tries to play streaming, it comes along with a valuation that you're not getting the growth angle that you get with netflix, so it will never be able to compete as long as stock price. >> the other parts of disney and x streaming business will weigh the valuation down because the old media companies have a lower valuation than netflix and theme park and the lower valuation of netflix and that affects the overall -- >> it's interesting. we talked about this and i'm not
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breaking any ground here ask disney got a lifeline thrown back at them last summer when sports gambling was legalized basically. we talked about it last night. it was a $99 stock and basically, sort of, it was failing in a lot of ways gambling came in and it saved espn and the stock is 18% higher than what it was and but for the move in december when all stocks fell and the stocks have been going up for the last year i'm with steve i don't think it needs to compete on price with netflix. thaw need to compete on an experience with netflix. i don't think they're going to beat them necessarily, but i don't know if it matters there's probably room for both, but i also agree with steve that until you see this at 120, so for me, i wait until they report on may 4th >> you're making the comparison with netflix what if you just took a look at disney's business, what it's valued at and what its offerings are. it doesn't have to be a netflix. >> no. correct. i do think it's possibly -- if this disney plus service
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impresses, i do think the stock could easily pop 15% over the course of a few months thereafter so there's certainly upside and the valuation's incredibly reasonable, but when i try to compare it to netflix and i look at the netflix content and what i see is i see addictive shows where people binge watch i'm not seeing addictive binge watching kind of shows or content with disney. >> i just think that i look at netflix, and i think it's completely the opposite. i think netflix has done a nice job of getting into content and the whole netflix story is that they've got subs and international growth and disney needs to get to that, but disney's content to me is proven and i would look at the core and say it's 7 bucks a share at 15 times and it's $110 or $115 stock alone. >> i don't understand why this is -- >> the point, i guess -- >> it hasn't started yet and it's want going to be the
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parabell onic broke, you're getting too much noise they mach a ton of money in parks and the media. if their content strat sxree were so great why didn't they roll it out ten years ago? >> they didn't do this overnight. they started in 2009 this is a pivot and a counter punch to fang and if there is a legacy player out there and the industries that have been disrupted to me disney has theable to do this they can do this through theme parks and lodging. >> but they're doing all of that now and -- they're doing all of that now and disney is up 6% or 7% against netflix up multiples of that year to date they've gotten a different multiple than netflix will get and they'll always get a different multiple than netflix will get if you want a growth play or a streaming play, you've got to go with netflix there will be a lot of noise around this, and it could be successful, but i think people are stuck into this trading range where disney is going to
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be something they buy for the kids if you have young kids. netflix is something that the whole family uses. >> i've got two young kids and they would throw netflix out and keep youtube i don't know that netflix is that cutting edge. >> i think that's a good point and that is all of the other competition outside of netflix and this new disney streaming platform netflix in its last conference call mentioned what as competition for their service? fortnite fortnite specifically and we're talking about a much broader universe in terms of percentage of time ofio you a your eyeball in different directions. >> it's done such a great job of the land grab. it's hard for me to imagine them going away and tim was alluding to this and there's probably room for both disney and netflix. i'm not saying there's a zero-sum game and i think they can go higher. for me, given where the market is and given the potential for the market to have a bit of a sell-off and given the fact that
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disney has peaked at these levels a number of times i would rather wait to report on may 4th. >> our next guest says even if disney jumps into the wars, in the netflix will reign supreme matthew thornton, good to have you with us. >> thank you for joining us. >> thank you for having me. >> do you think netflix's position is so secure you're not even going to bother >> yeah. we'll listen in to see what the details are around pricing and timing and stlr a couple of key points and these are not exact alternative services you know, disney is on it's pixar and lucas and this is family content if you look at netflix and the most searched shows on the netflix platform these are predominantly adult drama, comedy, horror, suspense, mma, documentaries and lots and lots of international, local content and it's "stranger things" and "orange is the new
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black" and "bird box," "the crown. these are not perfectly complimentary products here. >> i wonder if you look further out into the future, if you take a look at netflix and because it is so many things to so many different people if even the ailly will face greater competition by people who want to have the aversion of bundles and why can't i do a disney discovery for the documentaries and non-fiction shows and maybe a bbc and things like that and just skip over netflix altogether is that a scenario that you're even thinking of or concerned about? >> it is, but i think what netflix's friend his been complexity and confusion there are so many different products and solutions out there. some of them a little more mainstream and some of them very nechy. netflix all along has been very
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simple i can see any time i want and it's a massive selection of content and the pricing is very straightforward and so long at everything away from netflix as a consumer, this benefits netflix. >> he stated fortnite was the biggest competition and what other levers can netflix pull? >> we know disney have other levers and what lever can netflix grow is it going top on becaming where we see the other stocks and do you think they will buy out any of these or will there be m and a in the gaming space i think the leverages are getting pulled more near-term that are tangible in my view that will range from things like merchandising which they've started with, of course, building consumer and goods and
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stranger things for video games, as an example and things like product placement and i know people will ask if netflix will get into the game of advertising. it may not be advertising the way you and i bfrpg it and it will be within those hundreds of millions of poem on the platform and lot original content and brand sponsors are very eager to get their spots policed in their shows. and they're starting to test out and putting some of their, dee channels on sirius xm, for example. but again, if you fast forward five years from now, and if orange is the new black is being viewed by no one on the netflix platform in the u.s. or uk or pick your market there's nothing to stop them from re-licensing at 100% margin to other networks they have quite a few levers to
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pull and the one we didn't mention is pricing if you look at developing markets and i call it $10 a month they can certainly lower down on mobile-only plans and bring it down to $3 a month to drive fastering a cell raising and penetration in a market like india, for there are still levers to be here. >> thank you for being here. matthew thornton of suntrust robinson-humphrey. what do we think what do we think what do you want to hear today >> to me i want to understand also just how the forecast can be cash flow accretive and what this means in the short-term valuation and the medium term and we don't know where the adoption will be we can make the assumption that a company of this scale and the international global platform can compete where we already have amazon prime and netflix doing this if anyone can compete, disney absolutely can that's what i expect to hear. >> guy >> i want to hear that espn is on solid footing which it probably is.
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there was a number of time when people thought they'd have to sell espn and that's done a 180 there. we're not competing with netflix. we feel there's room for all of us and that makes a lot of sense and disney is doing everything right and my only problem that valuation is a bit of a concern in this environment in fact other the market has run up una, baited and then the earnings by the way, it's may 8th and not the 4th and i would be concerned that it's topping out. >> we will be monitoring disney's investor throughout the hour we'll tell you what the ride-sharing giant says that has shares of lyft taking a had the in the after-hours session later, wall street's bracing for earnings season and a tom technician says there are two names that are a screaming buy he'll join us. we are live from times square in new york city. much more "fast money" right much more "fast money" right after thisholder. cfa institute.
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it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. welcome back to "fast money. uber filing in the last hour leslie picker about an hour ago the 300-page document is filled with details about the company's web of businesses. you've got ride sharing, uber eats which is their food delivery service, freight and other bets now looking at uber's core platform contribution margin, this is what the company makes after direct expenses for its key businesses that is negative 3% for the fourth quarter and as you can see from that chart there, it has been steadily declining since the first quarter of 2018.
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the company says that margin will continue to decline in periods of high investments. it's clear 2018, a big investment year for them adjusted ebitda, also a metric of profitability has been declining over 2018 which the company says is a result of the investments in their, quote, other bet segment and it largely encompasses freight in 2017 as well as what they define as new mobility which includes e bikes and e-scooters while these certain metrics tied to profitability have been on the decline, uber is show casing bookings on the ride-sharing platform nearly doubling to 5.4 billion from 2018 from two years prior and it's direct comp in the ride sharing segment which is lyft which went public two weeks ago and the filing sent stocks lower in after-hours training and while it's indisputable that it's the number one player and the two do
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dispute specific market share numbers. melissa? >> grasso, what do you make of uber >> i would bet if you dead anyone about the ibm market this would be the stock that everyone knows in the space they have a lot of people they can pull from to create revenue, they have eat, freight, they is scooters and bikes lyft, you don't get that i think this will be successful and they don't have a tough act to follow with lift how this has turned out by far and i think it will be successful and the bar has been lowered dramatically for them >> we talked about this. what is the retailer investor, the guy or gal sitting at home when it priced at $72 and opened in the 80s if you've been in a lyft and heard about lyft for the last six months you are clearly under water and this game, in my opinion it's set up against us i don't know how that sets up for uber going forward, but in terms of what it says for the broader market, i think it's
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troubling. obviously the broader market has done fine and if you're at home watching and here's my chance to get a couple of dollars, as a matter of fact, i lost money. >> the difference is how inefficient is one versus the other and they have 72 billion in the fall and if you look at lyft, the bottom line is these two companies have raised more money in the private markets than any two companies in history. so these guys, uber has raised 20 billion and you have softbank with 16.5% and the guys who seem to have been a part of any big tech ipo and it's the smartest money in the world are they suddenly now going to run to the hills i don't know, but the bottom line is very, very smart people have been in this stock for a long time, but it doesn't necessarily mean that this is a company that has no value and the assumption that you can impi impute litt upon uber right now is probably flawed. >> the ride sharing market is growing only at 4% per year
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right now. so it's really important that you do have diversified revenue stream so that's why i would definitely at this point prefer uber over lyft, plus uber's actually making money lyft is still losing money hand over fist. >> for more on uber head over to i'm melissa lee, you're watching fastmoney first on cnbc worldwide. >> longer and financially viable ware losing money. >> amazon's ceo jeff bezos says the online giant could face multibillion losses, but it's all part of the master plan. we have details. >> plus there's an under the radar risk creeping up on wall street. >> why has no one ever told me about this >> okay, okay, calm down we'll explain why the big banks d in trouble. there's much more fast money right after this quick break
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>> welcome back to "fast money." wall street is bracing as the, let's get to bob pisani at the new york stock exchange. >> jamie dimon is about to help the trading community is on edge as j.p. morgan gets ready to kick off earnings season and that, of course, is tomorrow a know lifts have been fretting that earnings have turned negative for the first quarter now expected to be down 2.5% for the s&p 500. this is the first down quarter since the second quarter of 2016, but early returns indicate analysts may be a little too pessimistic here for a change. overall, 25 companies have already reported first quarter results. 84% are beating expectations that's a lot higher than normal, but the more important thing is they're beating by a much wider margin than usual, 7.5
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percentage points they're beating by that's much more than the typical 3.5% beat. so why is this happening it's happening because analysts overreacted in december on concerns over a global slowdown led by china and europe and they cut the numbers too much if companies beat estimates by anything close than seven percentage points and the earnings are likely to be up in the low single digits and not down and no earnings recession and the markets could still turn down if economic data from china and europe continues to decline and the biggest obstacle the market faces might not be earnings it's just valuations and the stocks are expensive right now back to you, melissa >> bob pisani at the new york stock exchange we discussed that before how the s&p 500 in terms of foreign valuation and is that the same level as it was before we pulled back severely last fall. some sectors have exceeded their forward p-e ratios how do you feel about valuations >> i hate to always do this, but
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we're from the 2.4 tenure where people are thinking we're out of recession and there is a tina approach to this and you get to a place where it is expectations as bob pointed out i don't care so much about valuation because the market has been able to price whatever it wants. >> i agree the whole tina thing, where else are you going to put your money to work? you can't make money in cash you can't make money in bonds so you have to put it in stocks as far as earnings season is concerned, what we are really looking for is good guidance, even if earnings are bad, you can easily get through a bad quarter by providing a very, very positive outlook. >> as earnings season gets under way, our next guest says there are a few stocks poised to be big winners and let's go off the chart with rob sluymer >> it's important to stay focus on the long-term perspective of the market we keep coming back to this point and the 2 hun-week moving
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average and again in december of 2018, to us, that's a major cycle low. the market has moved back into a lot of resistance here there's a lot of concern in the 2800, 2900, 3000 level that the market starts to get overbought. this indicator is the percentage of stocks with the rising weekly momentum and how many stocks are turned up and rising the key point similar to what w saw in 2016 when the market went through a pause after the initial surge, we're seeing the same thing and we had this indicator a couple of weeks ago and we're starting to get this minor downtick that's just telling us that less than 90% of the stocks and we're seeing a few of the names starting to drift off. the market is relatively high and it's overbought. >> we don't think it's a major decline and somewhere in the 3%, 5% sort of decline level, but some of these leaders and the software names have run a long way.
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>> there's still leadership and we like them long term and i think something like a mastercard, you're seeing the relative strength roll over. we saw names like adobe and crm and some of these stocks writing calls off existing positions and taking money off the table and going to earnings and we'll try to buy them on pullbacks later on and right up here, right now, we think we'll get some sort of pullback and we should bank some of that going into earnings season on the other side, names that don't have a lot of momentum in them, names like electronic arts went to this huge bear market in 2018 they're just starting to recover in that sort of 95 to 110 trading range. it's right at the 50-day i think that is a timely name and the expectations look low from the standpoint, and i think you can get the stock back to the 120 level back where we saw it in 2018 and i think that's really a timely name and the last name i want to highlight is
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it's representative of the broad market cycle and a bilge move of the four-year moving average and again here in 2019, the relative performance started to improve early in 2015 and '16 and we're seeing the same thing here going into 2019 and the second quarter. so around these levels we're buyers of the stock and we want to earn particularly on near-term weakness and we have the cyclical names as we near the bounce in 2016 whatever chop, churn and consolidation that we have in the second quarter and we'll build exposure to the equity market. >> why don't you come on over? evan will bring the chai ♪ ♪ >> i think this music -- >> generic, awful music. >> i think it could be an upgrade. >> it's growing on me. >> you're not easily impressed >> do you want me to be easily impressed? >> i appreciate the way you hold tough. >> anyway, they're kicking off earnings season tomorrow, rob. how are we looking
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>> very weak they've been on the downtrend and it has not recovered and they're very oversold and expectations are low and the stocks have gone into consolidations for the last call it six weeks or so and many of the energy names look like and they can pop to the upside and i think it will take time for stocks to rebuild their leadership and that's a second-half story. >> the same thing to popping to the upside and i noticed energy names and we've seen the oil complex move higher, but a lot of the sub sector has sort of been, you know, sideways kind of grind -- exactly do you see the same ability for energy to pop? >> i do. the only comment or hedge i would have is oil runs 60, 64 and it's a big band of resistance right around the 200-week moving average and it will come back similar to what we see in the market and it will be tough for the stocks to drive to the upside. if you push me on it long, short, and i would be long bank ps. >> i'm sorry
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this tug-of-war the s&p 500 does that favor the bulls or the bears in your know >> in the near-term the market would start to stall out, and the momentum indicator that's a pretty good way of getting a sense of the breadth in the market, and i think we have about a quarter of sideways chart. >> we like mastercard, but we own visa it should be able to weather the storm better in the event of an economic downturn. how do you feel about visa >> they're basically the same chart more or less i.t. processors, paypal, mastercard all in established clouds and software stocks, there have to be great fundamentals for those stocks to have ripped so far and i just think the positioning in those names is probably overdone and you get a little bit of a pullback and i would be adding on those pullback. rob sluymer. so take some money off before earnings season. >> i've been thinking about that for a long time and i've been
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wrong. i agree. stocks have to prove themselves. april 24th you have caterpillar and boeing it will be a huge day so i would like to see what they say on that thing. >> as banks gear up for earnings there's one under the radar that could be looking beneath the fur fas. jeff bezos says goet ready for the multibillion stock the traders will weigh in. much more "fast money" right after this
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>> welcome back to "fast money," amazon ceo jeff bezos making its annual letter to shareholders where he warned there could be big failures in the horizon. amazon will be experimenting at the right scale for a company of our size of course, we won't undertake such experiments cavalierly, but not all good bets will ultimately pay out is amazon worth this risk? is there any other company out there that being get away with making multibillion-dollar bets that could fail? >> there probably are. i think amazon can definitely get away with it i love the comment what it says to me is that amazon is going to continue to invest they're going to continue to innovate and they'll continue to roll out new products and services and you want to hear this from the ceo of a company you're going to try new things and not everything's going to work you might step up to the plate five times and you strike out once and you get four great hits and that is what leads to companies' success.
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>> when a company or ceo tells you to be worried. you should probably be worried and he's signaling something here and you should take the lead and sell the stock. >> he's had the ability to turn on the spigot whenever he wants. >> because he's going to spend a whole bunch of money and you don't want to be there when he's doing that. >> he's being given to comment on how you started off no one else can get away with what jeff get away with amazon having said that, he has the ability to turn on earnings when he wants to turn on earnings and shut them off when he wants to shut them off and i think we've grown accustom to amazon showing some signs of life and showing some profits and now he's telling you, all, but telling you there's going to be no profits there because he's going to be working on these growth year things and i should say you should probably take profits while you still have them in amazon >> speaking of amazon, coming up on "mad money," cramer is interview macy's ceo about matching its minimum wage and find out what he said right at
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the top of the hour and kicking off earnings season tomorrow and there is one under the radar risk to the group that could lead ttrblo oue ahead. we will explain. much more "fast money" straight ahead.
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money. while the markets and economy have climbed back from the financi financial crisis in the last decade so have credit scores it's much harder to get a high credit score, we've seen a rising number of missed payments by borrowers our next guest says the banks could be the ones to ultimately pay the price. chris from moody's analytics great to have you with us. >> thank you so much >> why do you think these scores, the number of people, i believe with more than 700 has grown dramatically over the past few years. why are these scores inflated, in your view >> yeah. that's rate. so the average credit score has risen over the last ten years, right? we've gone from a cyclical low around a 686 fico score in 2009 to a 704 fico score average today and it's about a 20-point swing and it's great that people are paying their bills and getting higher scores, but that's also a function of the economy overall. right, we have a strong labor market and wages are growing and
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it's easier to have a high credit score than it used to be. it's important to think about the meaning of those credit scores and a 700 credit score today is just under average and a 700 credit score back in the height of the recession and that was pretty good and it was actually better than average and it has shifted. >> explain to me why this is a bad thing or why this could be masking some sort of hidden risk for the banks or for credit card issuers? >> yeah. so the issue is that the -- again, the meaning of the score may be quite different today versus what it was and it's particularly true in the lower end of the spectrum. if you're thinking of subprime borrowers in 2009 with unemployment going through the roof and house prices falling through the floor it's easy to get to miss payments and get a low score, and the score less than 620, for example, that's probably an indication of some real risk, right because the labor market is strong you should have an easier time
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to make out your pages t and the average household can, so a lender or bank with a portfolio that's skewed toward the subprime, i think that's something to at least keep an eye on it's not saying there's going to be a massive loss, but it's certainly a higher risk. >> so you're not sounding an alarm right now, chris, but when you take a look out, what are some of the factors that you'll be watching to say, you what this could be a problem at this point. the economy turns a little bit and when interest rates go higher maybe the payments are harder to make and what are the key factors you're watching? >> it is the economy and we know the worst loans are made in the best of times. if this is the best of time for consumers this is the time to be especially vigilant. if unemployment starts to tick up, you will see some stress on households who are on the edge and you will see losses start to
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increase any type of labor market weakness and it's a risk for the revolving products that are out there. it's also to think about the different product categories and we're not so worried about other moages given tight lending stand ars and more worried about personal loan, auto loans and some of the credit card portfolios that have gone deeper into the credit spectrum those are the things to answer about or the portfolios to worry about. >> chris, thanks so much for joining us chris of moody's analytics should we be concerned maybe not at this moment in time, but further down the line. >> what would concern me is the following. the expectation that the banks have the -- or the understanding that they have never looked this good and the standards have never been more stringent and it has people in some sense of complacency and we saw that in the fourth quarter and we saw that in december having said all of that i brought this up and i said high yield is going to fresh highs
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because volatility is going lower and lower and right now there's zero stress out there on credit. >> i would broaden it out and say my concern would be wall street absolutely made mistakes in '08 and '09 and don't think it wasn't com blissity and my concern is that people are falling into the same trap they did a decade or so ago. >> you can borrow a lot of money because your credit score is good and interest rates are lower right now. >> it doesn't sound like it's as big a problem. it doesn't sound and to tim's point, their balance sheets are fortress like now. >> for the big banks and how about the credit card issuers, discovery financial and capital one financial. these guys are more exposed to these lower. >> and the regional bank, to be clear. they're very credit sensitive and if you start to see mortgage rates kick back higher and i think, if anything, they've been benefiting in the last month and a half. >> financials have lagged the market and with earnings season kicking off tomorrow some traders think the big banks
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could be primed for a move higher and mike ko in san francisco with the options action hi, mike >> hi there, it doesn't seem that the traders in xlf options aren't concerned about the two prior guests have talked about and clients outbased puts by 3 to 1 in the xlf and the most active options were the april 27th call and over 40,000 had traded for 14 cents and by the end of the day over 50,000 had traded and those were bullish banks that xlf could finish which is a day shorter than it normally would be and next thursday, 2.5% higher and the thing i would point out, we have 56% of the constituents of xlf will be reporting their earnings by the end of next week and we can see that price embedded in the options because about two-thirds of all of the move that the options market is implying for the financial sector overall over the course of the next month looks like the options market thinks that all of that will happen within the
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next seven days. so right now maybe because financials are relatively cheap, 13 times earnings overall, they're poised possibly for a move higher. >> all right, mike, thank you. mike ko, for more options act, full shows tomorrow at 5:30 p.m. eastern time coming up, tray up in smoke. what is wrong with the pot stock and tishis a warning sign for more trouble in the space? more trouble in the space? more "fast money" stashlgs head eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
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- anncr: prevagen. healthier brain. better life. welcome back to "fast money," let's get a check back on the disney investor trade bob iger took the stage earlier this hour. so far he plans to create great content and distribute it in innovative ways with the disney plus streaming service and the company said it will likely add a bundle option of disney plus, espn plus and hulu at a discounted price so wants to get more dollars than just the disney service. >> that's fine again, listen, i don't run disney, obviously, for good reason, but i don't think he has to compete on price. i think price is the last thing he has to compete on he has to compete on content and compete on the platform itself,
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but if they'll compete on price they'll probably do quite well. >> what else do you want to hear in relationship to that bundle offer? >> i would be curious to hear what segments they're really going after, too, because we know what's there and everyone's talked to the extent that netflix has gone after a particular kind of audience with a very specific offering and that's interesting and at $15.99 it's not a rounding error and it's expensive. >> head over to as the presentation continues and you won't want to miss the interview with bob iger tomorrow on squawk on the street. time for the final trade tim? >> one of the charts that was brought up before or i think it was anyway, electronic arts and this is a company on valuation has now gotten kind of interesting and i think they're starting to break through with their pipeline and check out ea is in the game. >> mike tepper >> i like american express it is a good play on the strong consumer. >> steve grasso? >> we talked about it earlier with rob, our good friend rob, j.p. morgan. the banks are oversold and j.p. morgan is oversold and look for
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a pop in the bank, j.p. morgan. >> we didn't mention, but tim looks -- >> senatorial. he has two pockets on the front which you can't see. >> anyway, you thought i forgot. semantic, just slowl upside >> see you back tomorrow at 5:00ment for more "fast. "mad money" starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there is 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 the make friends. i'm trying to make you some money. my job is not just to entertain, but to educate and teach you so call me at 1-800-743-cnbc or tweet me at @jimcramer she loves me she loves me not with earnings season kicking off tomorrow, everybody is playing the game, trying to anticipate
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