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tv   Fast Money  CNBC  June 19, 2019 5:00pm-6:00pm EDT

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a well-executed dovish tone from the fed chair without any dovish action in supportive markets but only slightly up, 0.3%. >> how will the president respond i think is one question and how far will this market go in pricing in more cuts. the fed shifted into that position the market was already there and the rates went down even further today. so will the market expect more, more, more, more accommodation >> we will have to wait and see. s&p finishing 0.3% that does it for "closing bell." >> "fast money" begins right now. >> "fast money" starts right now. live from the nasdaq market center overlooking new york city's time square i'm melissa leer we have traders on the desk. tonight, the s&p 500 is less than 1% away from record highs and a top technician says there's one beaten down group of stocks that's the best bet to kaech the rally. we start off with the federal reserve chairman jerome powell sitting on the sidelines with no rate cut let's get to our economics reporter steve liesman who was
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at the news conference today steve. >> thanks very much, melissa the federal reserve left interest rates unchanged at the june meeting but made a major change in the outlook, suggesting maybe a cut ahead, maybe in the next month's meeting in july. effectively ended the policy of patience as it was born, actually signalled where it wouldn't do anything for several months, instead it is now emphasizing uncertainties in the economic outlook and, quote, it would act as appropriate in economic expansion. remember back in march no federal official forecast a rate cut in 2019. now eight are on board with rate cuts, at least one this year, and seven of those forecast two cuts, and the fed chair saying even though they aren't forecasting cuts, well, they're leaning that way. >> the number of those that wrote down a flat race pass agree that the case for additional accommodation has strengthened since our may meeting. uncertainty surrounding the baseline outlook have clearly risen since our last meeting
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it is important that monetary policy not overreact to any individual data point or short-term swing in sentiment. doing so would risk adding even more uncertainty to the outlook. >> reporter: okay. so what's it going to take for the feds to actually cut, things you really care about? powell made clear the committee wants to see more clarity in just how weak the economy is and he wants to know how trade talks with china will work out if concerns about the economy are proven right in the data, it seems clear the fed will respond. it could happen as soon as july, melissa, pointing all weeks to this events, the g20 meeting with xi, the jobs report coming in early july from june, and then the gdp report and the other data during the month of july, that's what it is going to take to seal the deal. >> i think what you mention, steve, in terms of how many votes in favor of a cut this time versus the last meeting, that change is pretty remarkable in such a short amount of time we are having a great discussion with fred michigan on power lunch as soon as the decision
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came out he said it is important that the fed doesn't follow the market. that seems at least from my standpoint, from any other market participant standpoint has been going on since, you know, late last year or so i wonder what your take on that is, in terms of where you think the fed is in relation to the market >> reporter: well, i think the first thing, to your first point, you know, shakespeare wrote turn around is fed play. that's exactly what he said, and it happened not so often but it does happen. so that's the one thing. the other, it is a sharp turnabout and i have rarely seen it i have to say in about 20 years of covering the federal reserve. there's this big, we weren't cutting and now we're cutting. there's this very weird iterative process going on, melissa, where essentially the market prices to what the fed thinks it is going to do, and the fed prices to what the market thinks it wants to do it is like a circle there, and i think the marketmay have this one right but it has got to show up in the data the fed is kind of like, hey,
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the market has got some information. i'm not so unhumble that i'm going to ignore what the market is saying. it doesn't mean i'm going to act on it, but it did really make a change in the outlook to kind of meet the market halfway. we'll see if the data confirm it now. >> karen has a question. >> yes so in the past it seemed to me the fed didn't care so much what the market did, and so i'm wondering now that you say the fed seems to, you know, have -- to get some signal from the market, how can you differentiate that from what they're getting from the trump administration, which i know they try to ignore and have their, you know, independence be the main thing they like to talk about. how does that fit together >> look, they can't ignore it, karen. it is -- the criticism is withering, it is unprecedented, it is unusual. i think it stiffens their backbone a little bit. they wouldn't mind proving the administration wrong what so weird about it, karen, is how do you prove the administration wrong you prove them right about their growth outlook if you get the better growth,
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then the fed is going to have been right what is that, past perfect tense, something like that going to have been right about not cutting rates or at least even raising rates in december so, look, there's at least some chance that happens. the economy is supposed to weaken they have this 2.1% gdp growth in there, and i think when -- if you start pointing towards a weaker than 2% number, it was a one handle on it, that's when you will be able to say, you know what? for sure the fed is cutting here again, the markets are part of the process. the fed does not want to leave the market in the lurch and have major adjustments, but it is not going to do it if you are pointing towards strength. by the way, there's one other interesting aspect here that you guys may want to talk about, which is does the fed cut if the market is at or above all-time highs? it is a weird scenario. >> that was the other question that came up in our discussions this afternoon steve, thank you so much. >> pleasure. >> great to see you. steve liesman, our chief
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economic correspondent. >> thank you. >> on the fed on the side, stocks are about this month away from all-time highs. what do you do, guys >> it is pretty amazing. i thought i was probably the only one that thought the fed had to really say everything right, had to be more dovish than they possibly could be and the market -- otherwise the market would soften in a meaningful way and here we are steve thought we would go higher and we're higher for today, at least for today. it is impressive price action. we are effectively at all-time hice what do you do now try to put your dog on the side, i think the fed is making a mistake. it doesn't matter what i think despite my views on the broader market, health care has been trading well i think you stay there and you stay with the mining sector as women. it is absolutely concerning though and i say it again for the fifth day in a row, that utilities continue to make all-time highs there's something amiss in my world. >> but the low rates kind of reaction >> that's clearly what it is, but i mean you can't -- the market is driven by utilities. it is problematic. >> and real estate but i think the fed should keep
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this in their back pocket. i think they have this for the marketplace, and who is going to short the market knowing that the fed is going to cut? now we are at 100% chance. but if there's no cut in july, then you still have the same ability to say, well, there will be one next time they're not raising rates. i think that's the important thing. they're dovish. >> well, closely monitored means we could very well cut and that -- i think it was the most important part of the language if you look at the dot plot, basically eight want nothing, seven want possibly 50 bases points you have the dynamic where the market gets everything they want i would agree, the market is priced in so much good news here here is the one part of the after classes that we see rallying. >> the right cut >> exactly. >> yes. >> and to be clear, i don't think rate cuts are good news. i wish the market was responding really to the fundamentals and the top down, not what seemingly is the bottom up what i mean by that is, look, for equity valuations lower rates are just mechanically good it means your input cost, your
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discount rate, whatever you do your valuation on changes the valuation of stocks. they're worth more in this environment to belabor this point. but here is something an after class that has actually been rallying and it is good news look at high yield, at credit spread high yield is back up if you own the jnk, the hyg, we are back with the blow off in january of 2018 in other words you have seen credit recover all the way back, even if it means the fed is giving everybody a lifeline. that's a sign things have healed somewhat even though i'm not sure they are. >> is it dissonance when you see them do so well, we have 20-year lows, german bones, sen-year yield, negative a quarter percent or something >> yes and no. a jump over the spread of whatever the baseline is -- >> directionally i guess. >> directionally, yes. i shored some hyg. i believe the fed got it right today. why move when you will get a lot
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more data by july 30th and steve touched on a lot of it plus, all of the things with the g20 and whether we have any kind of trade deal, also we'll start to see earnings. that's to me the most important thing. this is a lot of noise around the most important thing, which is earnings and what are the outlooks for the second half of the year i think that to me is the most scary part you know, this is -- as worried as i've been, i feel like we're saying it is 100% priced in, then where is the upside, the side, the knee jerk? >> the side isn't bad. it is the economy does better, powell has a little bit of a safeguard that he doesn't have to raise so you have the economy doing better, you have earnings doing better so you still get the market rally. if the economy does worse, then he could always cut. if trade is worse -- >> there's no scenario where the market goes down, that makes no sense to me. >> i understand it is one offs, but can you put -- can you put any type of rationality on the
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bounce that we've seen from 20722 in the s&p to now its positioning? people were so negative on the lows and now they had to catch up. >> right. >> and, of course -- >> yes. >> where we're two months the other way? >> people are still in opposition the other way. >> really? >> volumes have been light inflation, there's no sign of inflation. the phillips curve is dead so you have global inflation, nonexistent. >> this is an absolute goldilocks is what you are saying. >> it is goldilocks. >> may i ask this question the last time we were at these levels on the s&p 500, how would you characterize the risk environment then versus now. guys >> it is interesting i think the risks are exactly the same. >> exact, okay. >> the only thing that changed is the commentary out of the federal reserve. >> and trade. >> pardon me >> trade seems closer. >> i think it is different. >> well, i'll push back on that, okay, but we can agree to disagree i think the only thing that changed is the fed commentary. >> when i look at the, quote,
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unquote, smart money, and i would say people in retail and the folks in the wealth management community and a big chunk if not the chunk of the asset base has been relatively bullish. if you look at guys paid to basically assess risk, i think they've been awfully short maybe not net short, but they've certainly not been long. if you look at long positioning of hedge funds, we're at five years lows in terms of net long positioning which tells me it could go higher. >> do we need a rate cut and do we need it before july tony, great to have you with us. >> great to be here. >> we should remind them that your price target for end of the year is 2950. >> getting kind of bearish. >> maybe >> you know, a price target on valuation at this point in the year is kind of stupid, so we're focused on our 3350 target for next year and i think it might be a little too low as well. >> what happens between now and
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the end of next year to give us 400 points to the upside >> inflation stays low, the fed gets easy. remember the 1995 analog it is playing out almost exactly, from every angle that i can find it is almost exactly like that environment. you don't go into a recession. we're up and different i agree with most of the bears yes, the economy is almost slowing. it almost looks like it is going to go negative that's the bull story. that's always been the bull story, because it takes rates down as long as you know you're not going into recession, that gives you upside in equity remember the average pe multiple when core inflation is between 1% and 3% is 19 times. it was there for most of' 16 and' 17. >> could we have had almost a synthetic recession? and what i mean by that is if you look at the .2 spreads and that's been the point where we had the inversion and you follow for the last 30 years, you find
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we've done what we were supposed to do in a recession >> that's a great point. this is something i will posit for everybody. in the 1950s the market gra drup wills and depending on which index, it ga drquadrupled or qud interest rates were around similar levels to today and you had very brief recessions. we've had three almost recessions this cycle. we had the european debt crisis which caused a 19.6% drop in the market i'm sorry, folks that's 20% to me we're not -- then we had 2015-16, clearly a global industrial crisis on energy price and commodity collapse then we had 19.8%, again i will round that up to 20%, in the fourth quarter of last year and now the slowdown so we've had almost three recession-like scenarios and the market has traded that way we're not ten years into a market cycle we're five or six months into a
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market psyche it we h cycle we had a 20% drop. >> if the economy does better, he doesn't cut and the market drops. if the economy does worst he drops. is it goldilocks do you see the goldilocks? and i know you are more conservative than i. i will follow your opinion. >> with goldilocks. >> i don't think -- i don't think there's a world right now in my world where the economic data is going to get aggressively better. i mean the whole bull story is that it gets worse it is going to get worse from here what made the fed go from tightening on february 1st, '95 to cutting in july just a few months later a negative payroll report. i would be blown away if we don't get at some point either a negative to the recent one or a negative payroll. >> to press on steve's other point, if the data comes up a little bit better then does your 3350 go out the window because you had just prefaced the whole thing saying bulls want the softening in the data, that's the playbook. >> i don't think it will go that high, but, again, you have to go into a sustained recession
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i think it is important to talk about that for a second. how do you know if you are going into a recession or not? people come on tv all the sitime and say the treasury bond market is telling you we're going into a recession. as tim pointed out the rest of credit is ripping. high-yield debt ripping. you know you have an economic problem when high-yield, the yield on high-yield paper is spiking because nobody wants it and they're selling it at the same time treasury yields are going down that's what creates the gap. what is happening today is it is widening a little bit because treasury yields are going down faster than high yields. so there's no areas of credit mortgage credit, agency credit, corporate credit that i can find that show we're in -- we have a problem here and you want to get really scared. >> tony, great to see you as always >> thank you for having me. >> guys, what do you think >> it is fascinating the bull case is that things get worse, and tony is right
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he's exactly right think how preposterous that is it goes to show to me everything is predicated on what central banks do not only here but globally there's a madness to that. last night i'm flipping around, watching president trump talk about the greatest economy in the history of our republic. something is -- there's something askew there. i mean i think i know what it is but it doesn't really matter, but you can't have in my opinion, even considering rate cuts in the greatest economy in the history of the united states. >> all right coming up, it is cloud nine after adobe source is all-time high today and oracle is skyrocketing after the earnings report the conference call is underway. we will bring you the laidest 4ed line alphabet faces shareholders at its annual meeting today what is wrong with the stocks. slack goes direct. get ready to make a public debut torr moowwe will tell you what is atk for this unicorn live from times square in new york city, much more "fast
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money" right after this.
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welcome back to "fast money" we have a new goes alert on slack ahead of its direct listing tomorrow let's get to leslie pick art on the detals. >> reporter: hey, melissa.
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the new york stock exchange revealing a reference price it where slack will begin trading of $26 it does not raise capital for the company, so that $26 per share price is not the price by which they will be offering shares to investors. it is rather a psychological benchmark so when the market making begins tomorrow, when buyers and sellers are matched right here on the floor of the new york stock exchange by the designated market maker, then they have a psychological benchmark by which to start that process. so $26 a share represents about double where they last raised private fundraising in august 2018 at about $11.91 per share. so quite a big jump up for those investors who participated in their series h round melissa. >> what are the comps since last, leslie >> a lot -- well, they didn't have a roadshow coming with direct listing. >> right. >> they only had the investor day, but a lot of investors are looking at a bunch of sass companies, service companies, workday is one
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dropbox is actually one because the potential total addressable market for slack could be this opportunity to be kind of an app for all means of an enterprise they're looking at various companies that participate in that kind of subscription model, that can potentially move beyond messaging, which is what slack is currently known for, to provide various services for the enterprise also, people are looking at pager duty and zoom video communications that are recent ipos that, of course, are more than double what they -- their ipo price at this point. also subscription revenues with enterprise at the target customer. >> leslie thank you. let's trade this could be it the next unicorn direct listing puts a different spin on this she mentioned the comp, but in terms of how it trades tomorrow maybe a better comp could be spot i don't know. >> the structure that it is not an ipo, it is not an ipo, it is really interesting it is a company representative of the fire hose of money coming
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into the community and how people are doing it differently. we talked about lyft and uber. it is a company with almost $900 million on its balance sheet if you look at the perspective. they could do nothing for ten years at the current rate and have a balance sheet that's surviving. i'm not to speak about the competitive threats from people like microsoft, but it makes it interesting for the market to flip the balance sheets. >> in terms of the direct listing, karen, usually you get underwriting support, right? that will be one sort of factor in how it trades tomorrow. >> right i was wondering since they're doing it this way, more efficient. >> cheaper. >> significantly cheaper. >> yes. >> right do they maybe not get the coverage i think it is an interesting sort of egalitarian structure to line up buyers and sellers this way. i wonder what it means for valuation for facebook, for, you know, any sense, whatsapp. >> not only do you not have the support, you don't have the lockup you have people that want to sell stock, you have them
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converting b class shares to a class shares you don't have the lockup. you get a little more pressure on it, but i think you get a truer picture of what the real market is versus having a normal -- >> the discovery process is more efficient. >> yes, you have the reference point of 26 and we can gauge it from there >> yes. >> can i go second derivative? >> yes, i love it. the farther along a derivative you go -- >> i want you to know that we've been bullish on exchanges for a long time. nasdaq had a bullish move. it is basically 96.5, the same level we topped at september of 2018 i think you start to take profits in some of these names year over year volumes have been up everything is great but they've run too far, too fast, number one. number two, egalitarian is not a great haiku word. >> oh. >> you could say it is egalitarian and that's your second line. >>, no, no. >> that also works at a second line. >> i'm melissa lee you are watching "fast money" on
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cnbc first on business world live, here is what else is coming up tonight. >> i'm sorry for being direct. >> slack is taking off with a direct listing tomorrow. but if history is any indication, it might be a dangerous sign for investors we've got those details. plus, stocks are soaring back to all-time highs with tech leading the way. and a top technician says thers e'one beaten down group that can help you catch the rally. he will be here to explain there's more "fast money" right after this
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welcome back to "fast money" huawei ceo is speaking to our very own deidro bosa where he told her he is not worried about
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a potential $30 million revenue miss after the white house's ban on the company >> translator: if 30 billion is impacted, then we can reach around 100 billion usd, and the financial statement, if i may, i saw that we're still growing around 20% we expect to see some slowing of the growth, but we haven't seen that yet, but we are making adjustments internally so we project there might be a slowdown, but until yesterday's report i didn't see any slowdown, and we don't know what will be the growth by the end of the year but we believe the $30 billion u.s. will be a small thing and we can withstand that. we're not a public company we don't attach importance to high numbers we focus on the performance, the quality of the performance >> this is a very different message than we are hearing on the u.s. side from the chip makers, the suppliers. so it is huawei's ceo down
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playing this what does it say about the trade war between the u.s. and china, tim? >> i don't expect him to say anything else and yet we listen to broadcom and a bunch of companies say it is a big deal, u.s. companies are scrambling component wise and certainly guys that were playing into huawei as an empire. the interesting thing is as huawei's fortunes fared worse and we have headlines on where they are, less profitable significantly on the top line, you have seen csi and local chinese stocks start to rally. this is a sense it is coming to a head of some kind, but i don't think that interview -- i don't take it as face value. >> right but you take the shanghai, the csi moving higher as -- >> markets are telling us something very different. >> that's there's progress on trade. >> for sure. >> karen. >> i couldn't believe a word of that it just sounded so ab serd on so many levels. >> if you listen to the interview, there are other
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portions where you are like, really no, we don't talk to the government, why would we talk to the government why are u.s. talking to the administration all the time. we don't have time to do that. it is hard for me to fathom the government doesn't call them or they don't call the government as much as the ones here. >> exactly. >> go. >> that's why you can't believe it the whole thing is out the window, but to tim's point when you start to see these exchanges and the stocks that are china, u.s. trade reliant start to rally, it is telling you something. that's, again, the positioning it is a beta position because whatever was positioned in the market here is two or three times x what it is in the trade-related stocks so you get a larger ramp, a larger bullish tail wind whenever you see things get more positive. >> our next guest says despite all of the trade fears the tech rally is brewing and chip stocks will lead the way higher let's go to mark newton with newton advisors, what are you
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looking at >> hi, melissa if anything i'm betting on a rebound in the group for the next couple of months. near term over sold conditions combined with the recent stability in the sector along with the ongoing bearish sentiment. you look at the equal weight tech, this is the etf for technology versus the broader market when i look at this, you see the ongoing up trend it is not showing any signs of deterioration. so we know about the antitrust regulation against tech. huawei implications of this being potentially hurting this tech sector. this is not really hurting technology all that substantially. we have seen a decline of 10% to 20% in many tech stocks, but technology relatively speaking is still if good shape next look at semiconductors. we heard rump's reelection campaign getting ticked off about meeting with president xi. we see the stocks jump to the highest level in five days this sector was beaten up badly,
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down 12% from its high about 200 points had in the sox. however it is up 150% since the last couple of years, since the 2016 lows. i'm looking at the break of the down trend since late april. we rallied in early june and we pulled back and we are making another move my thinking is we get up to 1500, about a 7% gain in the stocks over the next two to three months i'm looking at the time frame specifically in the middle part of august up to september. these are the ways i would play it micron technology, mu, stock last year peaked out around $64 in late may. it has been cut in half. we are seeing evidence of it stabilizing in the last few weeks. the stock jumped in the last few days it is an excellent risk/reward i am projecting a move from 34 to 38 in the next couple of months another is xilinx, one where the stock pulled back literally of 50% of everything it has done in the next couple of years an important area of support
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near 102 you are seeing signs of it starting to reignite, starting to lift. i'm betting on a rebound in xilinx of 5% to 10% in the weeks ahead. i do like this group i think it has been beaten up unfairly until we see more signs of broader deterioration in the tech space, it makes perfect sense on the eve of what could be a trade deal. >> a 7% move on the stocks in the next couple of months would be an enormous move. i'm curious. what is the context in terms of the broader market's move for that to happen >> my thinking is sa&p gets up t 3040 and 3070 in the fall. i think the recent movement is constructive with stocks heading into today'd fs fed meeting. you know, health care, industrials and discretionary moved to take technology's pace recently but tech is showing evidence of stabilizing. if we can get them working in
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the same direction, we could still see gains during a time when sentiment is understandably subdued given the ongoing threat of potential global cooldown in the economy along with trade tension that hasn't been resolved so people seem to be on the sidelines as tony dwyer said, you know, betting potential too bearish on the hedge fund side i'm betting on that in the months ahead. >> thanks, good to see you, mark newton. >> good to see you xilinx rings a bell. remember we go over to the board, do the pitch? last year we talked about how everybody was talking about them this year, 5g, the whole thing, mark is right, the stock sold off. but i bet they are in the crosshairs of the biggest chap makers i wouldn't be surprised if it was gobbled up at some point >> technology and obviously the semis are at the epi center of
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the entire trade issue if you think we're going to see positive headlines going forward, this is where you want to be. i agree with mark 99%, but if you look at micron, it is depending on d ramp pricing. if you get a pop of 10%, take it, sold, get out of your position because d ram has done nothing and i expect micron to retrace the mobile mower. >> i don't have exposure i understand what you're saying about if the market -- if they go up 7%, the market goes up something like 4 is what he was saying the flip side though to me would be that these go down significantly more than the markets if the market goes down, let's say, 4%. i don't love -- it is not like screaming to me. >> we keep talking about macro we keep blanketing trade war dynamics, smh obviously at the center of the storm. but what we're hearing bottom up company by company is the inventory itself end of cycle. suddenly trade war is the pan
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see panacea for the whole sector i don't think so basically it was a chart that kicked down to the day and looked like it was in trouble. if you look at the mega cap tech, it has outperformed and that's with the reforms on the reg la attorney front. to me, would you rather, here i go doing it by myself. triple qs over the smh. >> did you see that? >> he just did. >> check out shares of oracle. the conference call is underway. we will bring you the latest details. federal reserve chr roaijeme powell weighing in on the new cryptocurrency libra much more still ahead.
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welcome balk to "fast money" check out shares of oracle jumping after reported earnings briefly hitting an all-time life back to john ford back at headquarters with more john. >> oracle got a nice pop you could just see on the chart, bead on the top and bottom, but faded a bit in the earnings column when the ceo gave the guidance things started looking up. it is above analyst's expectation. here is the flavor. >> this past year we grew 3%, and for fiscal year 2020 i expect total revenue will grow
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faster than last year, constant currency of course, and that we will once again report double digit eps growth. >> they liked that the other ceo mark heard, oracle has two, cited idc's assessment oracle gained more market share in cloud apps than its rivals many analysts wanted to talk about database, which in a way was surprising oracle chairman larry ellison said he is seeing signals from cloud uses that the company's autonomous database is getting strong interest, which he suggested will lead to accelerating growth there. this appears to be another company that has dodged that rumored enterprise spending slowdown i was talking to adobe ceo this morning after their earnings outperformed and adobe increasingly is an enterprise company. he too expected continued strong momentum throughout the year, despite that kind of tepid guidance they gave it didn't race their full-year forecast adobe never raises full year
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this early, so overall these two companies that report early in the cycle sounding pretty bullish. >> thank you, john fortt back at headquarters john, what are you seeing with oracle >> i think revenue beat, eps beat, 13 times forward easternings, refuse nuf growth is here, the stock is cheap on valuation. if you want to play, and i'm glad you asked, mel, we talked adobe last night adobe is twice, 2.5 times the valuation. you know what? you might get 2.5 times the stock per form answer. we said they will raise their price targets, a few did today i think oracle goes higher from here. >> this is annuity, what people are paying for that's bullish. >> steve >> i'm going a little bit out of on the would you rather. they're not exactly in the same space, but s.a.p. and oracle are always compared. s.a.p. is up 32% year-to-date and oracle up 16%. i think the real interesting
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dynamic is that salesforce used to be the quote, unquote, cool kids in the room and those were the established gray-haired gentlemen in the room or ladies in the room. now you have crm up 12%. you are starting to get the change of the guard where you are going back to the more established companies. so i would go either s.a.p. or oracle and s.a.p. has been the one that's been the leader. >> oracle is kind of interesting. i wonder just on historical pe, it is cheap to itself by a fair amount you know, if they've actually turned and momentum is -- then it is not expensive at all >> all right take a look at our kramer cam. jim is talking to the adobe ceo following the company's big earnings beat. that is coming up on mad money at the top of the hours. he plus, revealing that facebook discussed libra with the fed chair ahead of the currency unveiling. hechael bu chella will be re to explain why it could be the beginning of a crypto
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jo j
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facebook i believe has made quite broad rounds in -- around the world really with regulators, supervisors and lots of people to discuss their plans, and that certainly includes us. you know, it is something we're looking at you know, there are potential
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benefits here. there are also potential risks, particularly of a currency that could -- you know, that could potentially have large application. >> that was fed chair powell today addressing facebook's big cryptocurrency unveil this week, this as lawmakers pushing back on the tech giant, calling for facebook to put a halt on its libra launch plans the next guest says it is only the beginning of the crypto renaissance. let's bring in mike bucella, partner of block capital good to see you again. >> good to see you. >> you think that libra is going to help the crypto community in general because a small percentage of people who adopt libra actually diversify, that could be a tail wind i don't understand how people who use libra, wouldn't use libra wouldn't be interested in diversifying into other coins. >> sure. at the start this is more of a global announcement than a facebook announcement. facebook is one equal part of 28 members, soon to be 100 over the course of five years that will affect anything that touches
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transfer of value. i think the things they've done right is obviously a lot of regulatory push back the things they've done right is, for example, they registered with finsin already. done they have msb licenses in 50 states they've taken the regulatory step forward first they focused on a lot of what cryptocurrencies represent are grassroot users. they are creating what is hopefully a valuable assess for the digital crypto assess industry going forward and provided a clear and transparent roadmap to doing so. >> right i get all of that but i'm trying to figure out why it is good for the crypto community i feel like this embodies exactly what crypto was supposed to be and never became, or it hasn't become yet. >> well, you have to separate the ideologies of both the reason they can coexist is because the folks who invest in bitcoin are hedging against trade wars, are hedging against
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currency wars. they don't trust governments they're initially back in the on- set of crypto assets, they were the punk and anarchist groups. >> sure. >> the reason this will eventually work is if you own 1% of those 2.7 billion monthly users and they're using libra's wallet or a competitive wallet, the potential for them to diversify their crypto assets into a -- i would consider this consortium its own sovereign now, that could be something appealing. >> why do you think facebook users want to do that if they haven't done it already? i guess that's what -- i'm trying to make a link between what that draw is. >> there are still many people who want to own crypto assets but rrnt comfortable with the ui, the ux facebook is an expert the user interface and user experience. they will make it almost seamless for you to transfer your fiat dollars into libra tokens and hopefully to support additional tokens. >> that's what tether was supposed to be but never was.
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>> tether didn't have master card, visa backing, facebook. >> it didn't have the dollars behind it. >> correct. >> many problems. >> so to the extent that you think users want to be in cryptocurrencies, to the extent that those are speculators, this is not a speculation at all. this is the anti-speculation it is pegged at, you know, whatever the basket is. >> yes. >> so i don't get that part of it. >> so, again, it shouldn't be viewed as a speculation, as a speculative asset. all right. this is backed by usd, euro, yen, pound the idea is that it remains a stable asset pegged to those basket of currencies, but what it is going to do is open up a payments ecosystem or a value transfer system that didn't exist before there are 90 million companies in the facebook ecosystem. if you include the entire consortium of large tech companies, venture capitalist firms, i think venture firms, i was at goldman yesterday and the opening remarks from david solomon were, you know, about
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obviously not going by it, but they touched on this potentially disruptive factor. >> i think what karen is getting to is the scepticism of a facebook user of libra would be the kind of person, even a percentage of them, that would speculate on other digital assets. >> right so, again, i go back to many people who want to access this space but are too nervous to at the moment. >> right. >> it may be 1%, it may be 5%. >> piece that together with if a trade deal happens and a lot of people in this space are saying, oh, you know, there's an almost exact negative correlation to when china put tariffs on in may and the s&p 500 and bitcoin. if we reach a deal, what other catalyst is there? >> for the -- >> for -- >> for nonsovereign assets, for crypto >> yes. >> again, it represents digital value in a way we never had before this is the -- you know, let's take bitcoin for example it is the largest of them all, and clearly the dominant player in this space. that is a digital store value that cannot be inflated.
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it cannot be touched, it cannot be confiscated that's what the real inherent in bitcoin -- >> but the catalyst to go beyond 9,000, to go to 10, to go to 15. >> an alternative asset. >> so it is the same stuff that existed before. >> the driver performance of bitcoin this year, it was well-known facebook announced this a while ago. it is not a shock to anyone. the real drivers of what has happened in bitcoin were all of the other announcements thus far. fidelity launching their custody product, whole foods, at&t, nordstrom, other companies accepting cryptocurrencies then each of the exchanges that are developing better and faster trading engines. we are looking at variant swaps in crypto options now which is exciting to have. >> mike, good to see you mike bucella. >> thank you. >> tim, what do you think? >> i think facebook had a huge benefit from the news and the reality is when mike talks about there's been interest and speculation, there's been interest at a timewith uncertainty around the fed it sounds like it is the new gold that's not really the essence and the -- you know, the ethos
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for why people said they were coming forward with crypto it is why we knew crypto was a popular place for people to trade and be speculating because it was wildly volatile, because the markets weren't as efficient. so ultimately when i hear some of the biggest payments folks in the world are developing this network together, that's peer-to-peer payments. it doesn't necessarily mean it is all crypto, but, again, i think the reason for crypto has been more about speculation. >> mike touched on this but second derivative again, i think banks are being dissen franchised by the things mike and tim were talking about, which is why in my opinion, you know, there might be upside in banks but it is sort of mitigated and limited in this environment. >> coming up, as slack announces pricing for direct listing, shares of spotify have been stuck in no man's land after its direct listing lasyet ar direct listing lasyet ar we have that
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very high borrow costs
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essentially because of the interest, where it will be more like spotify not a high short interest, tight spreads and no real discount in the forward prices it will be interesting when we see slack actually list, whether that's what we see something more like spotify and something like less beyond uber and lyft. >> i'm glad you are getting around tonight, mic. thanks f tt keorhami khouw the full action, friday, 5:30. up next, "final trade.
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time for the final trade tim. >> stock for gotten decoupled from the trade war is apple in my view. i think it gets back to the fundamentals that make it a buy. it is nothing else for the capital markets activity. >> chairwoman. >> yes, when we talked about a couple of months ago when it traded down it wasn't when the market was down. it was when fears of health care for all. in april it hit a low of 227, now here at 291. i think we have to take money off the table. >> steven. >> bausch health companies, a name you don't talk about a lot. technically it is setting up
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well. >> guy. >> i know what the chair woman is saying with anthem. i respect it buff i will say again. >> that's okay. >> the crosshairs are lifted from the space unh has been performing well i think you stay with united health. >> all right that does it for us. see you back here tomorrow at 5:00 more familiar in the 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 my job is not just to entertain but also to educate and teach you so-call me 184 -- 180 who caused the slowdown the fed in the kitchen with the bone headed december rate hike t


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