tv Fast Money CNBC December 31, 2021 5:00pm-5:30pm EST
tickers and say what if you bought 20% in eempach one of th. a happy and healthy new year to you, mike and to all of our viewers. >> happy new year to every one here is to 2022. fast money begins now. tonight, we just closed out a monster year on wall street. we await the ball drop do you stick with what is working? is it without the old or in with the new strategy diz nig disney very bad year is a magical turn around going to work. a true sign of the times
radio shack getting a big makeover and i has everything to do with the crypto craze we'll explain. we start off with the live look at time square fast money home in normal times. we are less than seven hours away from ringing in the new year you have every reason to celebrate. the s&p surging 27% to hand in the best year since 2019 and you couldn't miss every single sector posting gains led by energy, tech, financials as we gear up for a new year, we want to know the top trade for 2022 let's go around the horn could be sec s.e.tor, stock karen, kick it off >> my top trade probably not all that surprising is banks it's really based on a few things pu the main premise is i think the fed will raise rates
they telegraphed it over and over again i think value stocks will be where you want to be heavily weighed in kryour portfolio banks are clearly value stocks they will be able to grow loans that's been weighing on the growth i like the value i think we'll see some very nice returns on top of nice returns in 2021. bank s my top industry of the year >> you got do see that spread expand i know there's plenty of reasons why that's not the reason why banks make money that's not the reason why the stocks will go higher but yet it is because that's the way it's been i'm curious what your take on what the yield curve will bring us next year will be in relationship to karen's trade.
>> i think the fed will be reluctant to raise rates in the front end to an extent where it inverts yield curve and leads to rece recessionary pressures they have alltel graphed their intention in terms of tapering and raising rates. that will be baked in. i do think as long as the yields curve remains somewhat steep that will bode well for banks. we got to ten year and that's telling a slightly different stories. we can't have a robust outlook or commodities and negative outlook on growth. that's going be reconciled and if it does, and that yield curve remains normalized, i think the banks will do well >> you like financials >> we have been trimming financials i have exchanges which are part of financials. we have been trimming banks. we think the growth of gdp will decelerate the fed may raise rate a little
bit but the other factor is the macro factors will weigh on them and we might be better off in other sectors. >> steve, you like value also. different sector but also value. sd >> i do. do you want me to comment on the financials >> hold up your board. you've been holding onto your board since the last show which is like two nights ago >> i've been itching to get this thing right up here. here we are. for me, it's the value trade as well i do believe -- there we go. cover my face. this is the pestbest i've ever looked on television for me social security value think about this, china was a huge problem, huge head wind now you start to see recently china pmi surprised to the upside we had the variant that actually put a little fly in the ointment here, so to speak. that's going away. i think value will out perform
probably as soon as next month i think the fed will raise as much as every one thinks that will actually steepen the curve. i think financials will be okay. i think global chemical names, tse and i think dow will be the place you'll put your money. >> ydo you also like the chemica sector, that sort of bucket and value? >> i do because i think we'll see growth and building. i think they are related to infrastructure as well i like that valuation. steve and i are very much aligned on that value being
where you want to be and the flip side of that is i don't want to be i actively don't want to be in super high fliers. this is on your notion that the fed won't raise as soon as everybody thinks >> sorry, i thought you were asking me for my pick. >> i'm asking you for your pick which is on your notion that the fed won't raise. >> got it. got it my pick here is emerging markets. it's preds indicated on a few things melissa's comment about nowithstanding we have a very frothy market many the domestic market we have what looks to be a robust outlook on commodities. we have negative sentiment in brazil and china i think brazil is a bit more warranted. the negative sentiment in china sets up well for somewhat of a
contrarian trade here. you kind of loop in what steve said about pmi, if we get a pick up in global growth, as you've seen that froth in the u.s., you will see that move to other pockets in terms of the emx brazil you will see some out flows into those other emerging countries and em will be my top pick for 2022 if for no other reason that i think it will out perform what has historically worked throughout 2021. >> nadine, you like china >> i do. we've been entering a bit into china. we had a nice little boost this week em should do better but you have to pick your spots china should be better next year you could go with fxi which is
more broad based or invest locally, that will be preferenced too. >> karen, i notice the twitter feed, a thread you posted a couple of days ago and you talked about baba being a mistake. i'm wondering if you think it's time to relook at some of these names that had been shot down be i the chinese government maybe they can turn a page in 2022 >> you don't have do make it back where you lost it if they were to do a spin and have ant and their cloud business and the mall business and alibaba all together and spin out the government can do whatever they want with us, how would you value that and i just don't know it all. that could be right. it could be bounce and i won't
feel bad about it if i'm not there for it because i feel really bad if i made the same mistake twice. sdplp nadine lets get to your top sector for next year >> we have the xlre. it's along the line of being defensive. it does well when inflation decel decelerates. whether or not the growth in gdp is accelerating or decelerating. the price right now at 51.80 is call it in the middle of our range. i'd like to pick this up closer to 49.70
don't go rush out monday to get that especially because it's at a 26% volatility discount. what do i want there is to be a premium and people worried it's got two to one downside be patient and get their under 49.70. you'll have a good run into 2022 >> what does the chart master see in new year? let's get to carter worth of worth charting what are you looking at? >> it's got two sectors to talk about and i'm away from the dean -- nadine the first isindustrials. it's no good take a look at this chart. there's the four, five year chart. the red line drawn along the top. it broke out to new highs. if you're a relative performance to the other choices you could have made, looks like that bottom panel would have put the whole thing in it's called negative alpha not working, not performing.
take a look at the second chart. this is the reit sector. same circumstance of two panel chart. on the top, reits. they break out underperformance is starting to change you get the tower, the storage name that's been on fire and look to be continuing. this would be favorite >> how about your outlook for 2022 overall >> since the '09, we only had three down years
2015 a down year down less than 1%. the question is, do we get another robust year or not the last 15 years is never once predicted it why would you? no one wants to hear that. it's always higher looking ahead. do we have a down year we'll see. the bigger question is is the upside potential bigger than the downside risk? i would say no >> all right we'll see you again in a few minutes in options action. carter has a bold call for the new year he sees this one sector out performing the broader markets in 2022. he'll lay out the charts on the way. let's trade carter's pick. does steve grasso like real estate >> you know, carter and nadine
touched on all of this carter said the xlre is up 42% year to date for the last three months, it's up 16% from the last month, it's up 9% which means it's not running out of momentum. i'm a little weary of investing in it at this point. nadine lhit it on the head wait for a pull back or entry. i don't think it will be where you see the most gains i'd rather play the under performers going into 2022 >> karen, you've got some industrials. i'm wonder what your take is on carter's prognostication about it being a sector under performing >> right i flinch a bit when he said that i look at the notes earlier and that divergence is as wide as it's been.
they're not all the same not all industrials are the same there's a lot that out performed. united rentals had a big year up 40%. u.p.s. had a good year fedex flat for the year. disappointing. coming up, you've got questions. they've got answers. they have gone from selling cords to selling crypto. disney in the dumps the shares coming in dead last for the year for the dow is there no more magic in the trade? we'll debate that next much more fast straight ahead.
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investors fleeing on if park business would take another hit. disappointing sub numbers. booking investors are accustomed to supper charge growth. will 2022 be a more magical one for disney would you jump on this disney train into the new year? >> i would it can't get any less pmagical. there's no magic in that wand this year. by default, i'm going to say yes. you mention the sub growth i think it has the upside exposure i think you'll see some normalization in the studio segment of their business as well the streaming really that led to like a massive expansion of price to equity multiples and you see that converge. i think that sets up positively as it's said needs outside p/e ratios don't bode well going forward. you start to see some of that
abate. >> how do you think about d disney's valuation at this point? one point the streaming business, one could say was so over valued for what it was banking on the growth of it and they came in with numbers that disappointed where are we at now? >> it's still not cheap. i think it's still price for some kind of magic maybe not like, you know, i don't know who is the great magician is. david blaine may be more o of a las vegas kind of magic act. it's not cheap at 20 times ebitda i know a lot of the hotels and cruises and disney land and theme parks can come back more than they have already i don't think all of the air is out of the streaming
that whole sector came down. i t i city there's a little more froth in the sector. it should be fantastic but it's 25 times next year ebitda. i don't think it will be down next year. >> then the question is you wanted a roping trade or a stock that was really leveraged to roping, would it be a disney or something elsewhere you don't have the streaming over hang or the other side, if you wanted a streaming name, would you go with disney or a pure play >> it's a multi-level question in terms of disney, while we like the company, it's funny because this is one name that we get questions from from clients like can you put it in our portfolio. there's a beloved aspect to this name we like the hulu asset, the ad revenues on there but they are spending a lot it's about monetizing the
digital assets i think there's other ways to make money to answer your first question i wouldn't invest just on that. it's about 4.5% down side. 2.6 upside on a near term basis. people aren't paying for protection right now it's a little bit complacent to get a little bit cheaper it could be a solid trade. next, radio shack is getting a major facelift check out the five worst performing s&p 500 names we'll be right back.
welcome back new year, new radio shack. a big siphon time s the 1 100-year-old two time bankrupt retailer announcing plans to rebrand as the crypto currency. is this a smart move for the shack? i never thought we would talk about radio shack on this show here we are. >> right you bring your radio in and they bring you some bit coin? i don't get how they will do
th that. >> radio, beta max >> guy will have a field day with that. i think they will be very late to the party i would not get on the slash meta slash bitcoin radio track train. >> you had to wonder what radio shack was going to do with name like radio shack you see the stores and if you do they are independently ordinary personed -- operated, by the way. this could be a way to revive this brand >> does this reek of a meme stock, does it not it doesn't really matter i agree with karen i don't think it makes a ton of sense but it really does give some fodder for people to play
with. it's name they had there's only so much of a market for a watch battery that somebody doesn't use anymore time for the final trade your first trade in the new year let's go around the horn what do you say? >> sticking with the real estate theme. zillow i think the cash brand will abate an they're back to their core business. >> karen >> i love zillow but i'm sticking to bank of america. i'm happy to be here every day it's such an honor thank you. >> we are the lucky ones
nadine >> equinix >> steve >> i'm going to go with disney down 14% years to date it was up 7% this month. that tells me there's momentum in the game. i think next year will be a ton better price targets are close to $200 is average price target. i think it's a good entry point. disney happy new yier >> that does it for us for 2021. we'll see you next year. don't go anywhere. don't go anywhere. options action is up next. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. machin soon. kick pain in the aspercreme. (kate) this holiday, verizon has the deal that gets better and better and better. get iphone 13 pro, on us, when you trade in your old or damaged phone. (kate) better? (guy) better. (kate) hey. (kate) and up to $1,000 when you switch. (carolers) ♪better♪
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