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tv   Fast Money Halftime Report  CNBC  January 20, 2022 12:00pm-1:00pm EST

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will be in stock carl, you want to shop at an amazon store or a t.j. max >> that's going to be a classic. >> meanwhile, a great programming note >> that's right, before we go, carl tomorrow airbnb ceo and brian check offy will be live on tech check. you don't want to miss that and he's decided to live in an airbnb >> let's get to the half carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center inside the correction wreckage how much are stocks likely to drop is there anything to buy now and how to protect your own portfolios we're discussing and debating all of that with the investment committee, joining me is jason snipe, jon najarian and i'll
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show you exactly what's happening in the market at the moment the s&p with a nice bounce technology bouncing back today and the nasdaq trying to regain 14,600 on its way to doing just that and the ten-year note yield 183 and just pushing 184 there's been a lot of technical damage lately, dr. j, so many different sectors and the indices are either below the 50-day, the 200-day and the nasdaq is in correction territory yesterday. what do you make of the bounce are you a believer in it should we be >> well, when you and i talked last week twice scott from overseas i was saying we are more likely to bounce at that 200-day for the qqq than we are to burn right through it it doesn't mean that it's an all clear that has been sounded, but i'll be watching and thus far the volumes are very good. so one of the things, again, that you and i discussed was when you see a bounce and it's
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not coming on volume and we've still got three-plus hours of trading left, when you're not seeing volume then i'm very suspicious of that bounce. so if the volumes that were in the first two and a half hours of trading today continue, scott, then i'm going to say, yeah, they probably can go higher from here after they coddle out of late shorts in the shorts, and basically took the market higher into that. >> josh. we oversold or not sold enough you know, you had some interesting commentary today on the reformed that i urged everybody to check out about using the opportunity of this bounce to be a seller of things you may be overexposed in rather than a believer in some sort of long term comeback for some of the most devastated names. >> yeah. i think it's -- look
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it's so tempting when you are down 20%, 30% in a stock it's tempting to look at a day like today and be, like, thank god and you form this idea in your imagination that if you just hang tight all of those names are coming back to where you bought them as though that's an important number to the markets, and you'll be able to get out even i think our egos would prefer us to be able to do that. i think people, they overemphasize that possibility in their own mind, especially when the declines have been as quick as they've been. just in the year to date period. it's really remarkable looking at some of the stocks that we talk about on the air every day. how quickly they've declined and many of them declined from already having been down big from last february so i think days like today typically, they don't represent the end of whatever the trend has been i think they represent just the sellers taking a break, and so i
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don't suggest that you look at your whole portfolio and just indiscriminately say i'm using the bounce, i'm using the bounce, but in certain situations where stocks have kept you up at night and you're over concentrated in a given name, you're fixated on a stock because it's not cooperating with you, those are the situations where you want to say, okay, i don't want to be the guy that pukes at the bottom, but i've got this name now that's up 7% having lost 20% in the last two weeks and i don't want to be as big in that name anymore or i don't want to be in this anyway. the reason i bought it was it was going up and now that reason doesn't exist and there is no fundamental reason why i still want to be an investor in this company. a lot of traders become investors because the initial purchase goes against them this is a nice chance to rearrange some things and make moves. and i'm not just speaking prescriptively with everyone else i'm doing that with positions in my own personal portfolio.
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i've lightened up in uber and i've lightened up in crowdstrike. i still have most of my position on and i don't want to be as big as i've been because i don't foresee those stocks being back at 52-week highs any time soon and i want the flexibility there are other situations, though, judge, where i just started buying, and i was able to use this volatility to add and roblox is an example of that i've lowered my average price. the selling there has been unbelievable another name on holdings i just started buying it a very, very fast 10% came out of the name. i was able to add to my position there, so i think it's situational. it's not an across the board macro call it's just about using these opportunities to get yourself in a better position mentally >> okay. >> so again, just to underscore the fact that you've been buying a little on the dip of roblox and on holdings. i don't want that to get glossed over even though you do say you've been trimming some of your positions
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i look at stocks like naturally i go to this place, and i go here a lot because it's the area where there's been so much carnage and it's the ark stocks. it's the cathie wood-type names. it's the shopifys, the blocks, the coinbases. 30%, 40% off of the 52-week highs and the spotifys and the twilios, 40 and 50% respectively off the 52-week highs and the palantir, 58% and 54% respectively josh, are we talking about those kinds of names are ones that they could be a pipe dream that they could get back to where they once were because they've come down so fast. are you referring to those types of stocks if not those directly? >> look, i think it's very difficult to make the case that a lot of those stocks were at those prior levels for any reason other than they were going up
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nothing attracts a crowd like a crowd and people become very confident in their holdings when everyday rewards them with more green on the screen. that cycle, though, also works in reverse that psychology and in bear markets both for the broader market and for individual stocks you always have these massive one or two-day bounces that give the longs a little bit of comfort like, all right. i've seen the worst of it and maybe scare some of the shorts, but that repeatedly frustrates the longs because you get this reprieve and you get this where the pressure seems to be coming off and that's it. i went through it and now things will get back to normal and then that downtrend resumes and if you've been in the stocks that you're referencing for most of the last year they've been going down almost every month with these little sharp rallies in between to kind of keep you hanging on and that's exactly
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the types of stocks that i am referring to, yes. i don't think that people trapped in them don't feel as bullish as they did as when they first bought them. human nature keeps them from booking things and i get it. i don't want to do it either so days like today, my take is you really have to use a day like today to make some big decisions. >> let's go to one of those investors, committee member who is thinking about big decisions in the portfolio and that's jason snipe. jase, you own twilio, shopify and maybe some others. i'm wondering how you're thinking about those stocks that have been sitting there with a lot of red all over the place. >>. >> a lot of these names have been feeling pain since part of early last year and a lot of it
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started to happen in november. i think what's important to note here you have to right size some of these names for me on a shopify or a twilio and some of the names that you referenced, the business models is what you need to believe in, but i'm not saying it would be pouring into these names at this point because a lot of them are still trying to find a bottom and you're trying to find support levels and obviously, we've talked a lot about from a policy perspective where we're going and taking the oceans of liquidity out of the market and moving into a tightening cycle and the impact it has on high multiple names like the ones we're talking about. making sure i'm right sizing the portfolio and thebarbell for m going forward is the cyclical oriented names and you can still abandon growth even though names like microsoft are 11% off its 52-week high so starting to look at some of
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them, shopify is another one over 40% off the 52-week high and they can look appetizing, but you have to be careful in this market where we are all multiples in valuations are starting to be reset sure >> but jase, look. i think we need to forget about the question of pouring in it's now a question of whether it's time to pour out. i think that's the crux of of j josh's argument not to use the question that hey, is this so attractive to i need to buy more of the stock they loved, but taking advantage of a situation to repurpose, rebalance some of the names that you have loved for so long and simply have to come to the realization that they're never going to have to get back to where they once were >> yeah. it's a great point, scott, and i think even as we look at the ark names, one of the things that cathie wood always takes about is your time horizon
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why areyou on that trajectory? is it a one-year time horizon or a five-time horizon, so a name like twilio, shopify or block, that might be a raid and that might be an opportunity to get out on a bounce like this. we have seen some of these intraday bounces over the last several days and then trading lower at the end of the day so it could be an opportunity, but i think it's important to right size and also look at your time horizon from an investment perspective to be able to make these types of decisions let's pivot away from stocks like this to ones that we maybe could suggest are more fundamentally sound, for lack of a better description it comes to my mind and more fundamentally sound and we can be better believers in what the story is and what the trajectory of the
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business is rather than relying so far into the future with whatever the company is ultimately going to deliver. mega tech tallfalls into this category and even they're not, mun and this has been one of the areas of the market that's held up and it's had the broader indices from having a substantive direction from meta and microsoft and apple and alphabet have held up, but now nvidia is 27% off its 52-week high amazon, 17 meta, 15 microsoft 11 alphabet, 9. apple, 7 1/2 >> look at how the bounces are >> yeah. yeah well, look, part of the question is -- brenda, what are we supposed to think about the way these stocks have come down. are the bounces anything to believe in because they're as josh said, weak, and if you get a lookout below on these names, you've got big, big problems in
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the broad market yeah we have to come back and look at what's going to be important this year and we think more than anything the fundamentals are going to be important and pricing power is going to be important. we're not counting on a valuation expansion. certainly not like what we've seen over the last couple of years. in fact, we can get valuation coming down quite a bit for the broader market we look at what is going to drive this market going forward? it's earnings growth so booking at the companies that have solid earnings growth that are much easier to value, not on profitable companies and companies that are highly profitable like the microsofts of the world and seeing that they're now down double digits from their high. i'm not saying they can't go lower, but i think this is a good moment to add exposure to those who may be underexposed and there not many people underexposed and that does provide an opportunity and as we
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look to next week, obviously a huge week and not only with earnings, but also the fed and i think it will be a moment where the markets are refocused on fundamentals in terms of the earnings story here, and so i think it will be an important point, but i do think from a big picture standpoint this isn't a bad moment to be adding exposure i'm not saying go all in at all, but i do think this is providing a little bit of an opportunity here for those really high-quality names >> josh, i'll come back to you to finish the point that i think that you wanted to make about the bounces in some of these names. >> this is down 1% for a lot of the big cap growth stocks and i'm not saying that the rally can't build strength who the hell knows, right? on a one-day basis and the back open rip that's dominated by some of the lowest quality stocks that has been hit the hardest and not historically the
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most favorable backdrop to be able to say, okay, we've seen the worst of it and i'm long amazon fundamentally i think it's one of the best companies in the world, but this ain't it this, to me, looking at it as a shareholder and maybe even possibly as somebody that might want to add to the position at some point, you look at amazon and you say there's no conviction that amazon has seen its worst and apple started to roll over for the first time yesterday and microsoft has been the strongest and continues to be today that stock is just astounding. nvidia, which i also own these are not a great bounce and these are very high quality situations, but it doesn't matter if people have stock to sell they're going to get hit eventually and arguably, some of them already have in the case of amazon and nvidia. so i feel like if you want to be the person that says i'm going to nail the bounce perfectly, okay, this probably isn't the final bounce
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we probably have not seen the worst of it. the president of the united states yesterday gave a speech basically predicting a hot war in europe. am i the only person that saw that i think you guys carried it out on the air if you have sentiment, regardless of how you feel it's going to resolve in the interim without resolution, we should not feel as though we're seeing the bounce, and i just feel that that's realistic and if you end up in that it's not the end of the world if you end up in this. >> so, let's, if we could try to rise above the plan's coming up. we've hit some turbulence, right? we get through the clouds and let's try to look beyond the current environment that we're in which feels bad and may, frankly, get worse before it gets better whether you're finding some kind of bottom in the nasdaq and other areas of the market that have been pretty hard hit >> we tried to do that yesterday
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with rick rieder of black rock and here's what he said in his market view despite everything that's happening now to keep your eye on the big picture of what stocks can do this year here's rieder and we'll talk on the other side. >> we've come a long way and maybe we paused. listen, i think at the end of the year i still think equities will be the best asset class relative to the bond market. i think equities can be up 10% this year. how they get there i think is unclear and i'm looking at chair powell and talks about where policies can be and how quickly they feel like they have to bring the economy or inflation back down again. >> now the issue obviously that has everyone captivate side the move in interest rates and the ten-year pushing to 1-9 yesterday has everyone taking the next leap forward and maybe
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it's 2-2, 2 1/4 and rieder thinking he's getting into the end of this run. >> that's the important point. we'll get there in the next month or two or it will take four or five months to get there. i think that's where we're going, but i don't think some of the radical calls that have quite frankly dislocated a lot of investors that gosh, the fed is so far beyond the curve they'll end up how fast they're going with rates and that will push rates dramatically higher i just don't think so. >> let's bring in our market headliner for today and see how rick rieder has to say he's the chief investment officer at meryl. it's good to see you, chris. welcome back. >> thanks, scott appreciate it. >> two things there from rieder i'd love to get your opinion on, whether you think we can do 10% in equities this year despite
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how bad we feel and what we're experiencing now and the rates have gone up a fair amount and we're getting toward the end of the road what do you think? >> yeah. i think that's a really good part of the whole story here it is tough to say what we end the year at. there are so much gyrations going on, we have a whole new regime at the federal reserve. we know all these things and we know where the fed is going, four or five hikes and we know inflation is stickier and longer what we don't know is how much the profit cycle itself will outdo the valuation decline and it's simple math if the profit growth is higher than the valuation decline for this year you have a positive market from our perspective, there is a market that's in the revaluation that reset tech is being split and the money that's coming out of the
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split part and the unprofitable area is going into the less market cap areas like energy and the the indices will struggle to get ahead of themselves. however, if you had a dollar today and you're looking at all of the asset classes and the equity and that's the different and more attractive than bonds we think this is a buffalo market, it's in the family, and it can get tired it roams quite a bit it's rather heavy and it's a grind out across the prairie type of market where you get these vortex periods for the long term investor, let's talk about it. the five-year investor, these are fantastic buying opportunities in the equity space and a part of the market that will have the length of stay the high-quality is producing solid free cash flow
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>>. >> i'll pick at what you said a little bit we know all of this stuff is in front of us and you threw out four to five hikes and plus quantitative tightening and we may know all of that's happening, chris, but the market doesn't have to like it and valuations don't have to make sense where they are today if all of that is going to happen and we're in the process of figuring out what a true or correct valuation is for stocks in the environment which you just described we may know everything is coming, but we don't know what the appropriate valuation of the market should be under the scenario where you laid out. >> that's the beauty of the market you nailed it, scott it's the process of figuring out what the valuation number is on the future and on the next 12 months and on the next 24 months if you put a checklist down and you have above average nominal
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gdp growth and you have operating leverage and you build a profit cycle that's still going forward. you get growth there and you get growth and profits this year and you add a normal growth for '23, that valuation decline and that reset and we're trying to figure out what that is should still stay in the 20s and here's why the capital efficiency in this economy, even in the globe, but in this modern-day economy and the capital efficiency is three times greater than the post world war ii median period and that's a fancy way of saying we use money so much better today per employee and that goes a lot farther and it creates a different backdrop and if that's the case then valuations have to remain above what most strategists and economists believe is from the last few decades. from my perspective, pick a number you also seem to suggest that
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earnings growth will be robust enough to offset the interest rate hike or a change in policy or some of the things that the fed is likely probably at this point going to do, but the economy looks like it may be slowing off of great levels, of course, but nonetheless slowing. certainly, still above average and phenomenal gdp growth, 8%, 9%, 10%. split that in half and you get the real number and you still get revenue numbers and beats much better than what we experienced and obviously slower than next year, even if it's 10, 11%, that could batch the valuation decline and you get a flat market and if you beat that and you get 14, 15% growth which is certainly in the cards and you get a positive trending
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requirements and you're now close to that 8%, a couple of ticks below what rick was talking about and the key is going to be all of this liquidity drain that people have talked about, and we know that and it's probably taken the balance sheet to 7 trillion if we put a hundred billion cap in from 9 trillion plus that's still 40% or larger than where we were pre-pandemic it's an important time to exhale, rebalance your portfolio, get back to the basics and stick to the fundamentals and use these opportunities for the longer term investor that can think past this year as a way to arj in average in the length of stay. >>a i big reason at the outset when you said it's a great buying opportunity and you were very careful to say in what part of the market you suggested it was and what it wasn't, and i'm thinking about the kind of
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extremely high multiple and valuation stocks within a tech landscape that is notable that you did not mention specifically, and i know exactly what you were referring to josh brown has a question for you, chris, before we wrap up. go ahead, josh >> hey, chris. i appreciate all of your comments and i agree with you. if your time horizon is longer than five years for most people watching it is, we won't remember what went on in the last week or two i want to ask you about, if you're thinking about now with, say your traditional portfolio and you have stocks and picked income yesterday the german bund traded in the positive for the first time in two years, four years, whatever it is and now there are actual yields on what we would traditionally consider risk-free assets and treasurys, for example. isn't this what you want to happen if you're building a diversified portfolio? >> i understand in real terms it's not great, but just in nominal terms, the fact that you don't have to be full ney
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stocks, you can own fixed income and you can get some sort of return from away from the stock market even if it's painful for multiples and short term and isn't it a more constructive environment in the intermediate and short term to have choices away from the equity market from someone in the 60s and 70s trying to have their money do something? >> absolutely. this recalibration is exactly that it's the interplay and the rise in yields that's making some parts of the market that were not attractive before now attractive that's another good part about investing. money is always recycling and money is always coming in if you have dividends or bonds and you're getting cash flow in and thankfully as yields rise you can buy into a higher yielding environment. yes. 105 and 19 and we're probably going and drifting higher, but to your point, josh, you're correct and this is the reason why the recalibration that's going on could potentially last
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into the middle part of the year and not totally the valuation reset and the recalibration of money and you have risk parody funds and think of the sovereign wealth funds thinking as you said, the german bond market now turning positive ask if we get to real positive yields that's a whole different story and this is a recalibration, this does allow diversification for the first time in a few years to start to work again. yes. >> hey, chris. i appreciate it very much. that's chris hyzy from merrill lynch, bank of america doc has unusual activity ghafr is the day and we're back rit teth your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do.
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to build a future of unlimited possibilities. let's do some calls of the day now and we'll top it out with apd, downgraded piper. dr. j, you own amd calls and cramer says this cuts was a, quote, wrong-headed cut. what do you think? and i mentioned you don't hear much negativity around amd >> no, you don't, scott, and the reason you don't is, of course, only boeing has a bigger backlo than any of these big semiconductors and the fact that advanced microdevices got this downgrade, i understand if it's because part of a note said that it was just a tremendous year for them and taking some money
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off the table is something that smart investors and traders do all of the time, but i wasn't really taken by the note that caused me to exit my positions or anything, i just think you hammer out calls against the position and you continue to hold because i think that demand is going to push prices up and push the price of the stock higher >> next we've got visa, mastercard and paypal all named top 2022 picks and morgan stanley. it's super relevant to us today. brenda, you own paypal and visa and paypal has been squirrely lately the return is down, six months down 40% >> paypal solved the correction for fundamental reasons. there was a disappointment, but it led to a reset of expectations where expectations got ahead of themselves here and this company is a leader within
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the payment processing industry in terms of innovation and also growth we think that's going to continue into this year. also i have some exciting developments with venmo being accepted now on amazon we don't expect a huge financial con from bugz, but it adds legit mass toe the venmo platform and we still think this is an interesting opportunity for a name that was once beloved and has been incredibly profitable and still has a lot of opportunity ahead of itself. >> jason snipe, you own paypal, as well. what do you make of the recent decline? this was a very much loved stock and it's been in the penalty box. >> yeah. it's been a tough run down on the other side not too long ago it was up over 300. so i agree with a lot of what brenda already just said i think payment volumes, though, have been surging. that trend was not changing and it was up 26% in the last quarter. so i think this might be an
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opportunity again and it's an expensive stock and it fits in that bucket, but i do think there are some opportunities here and there's definitely opportunities for the long term that provided the tailwind so i like it here. >> so, josh brown, where does pay pol -- paypal fall that we talked about in the outset of the show today it's down 42.5% from the 52-week high is this one of those i need to buy it now because the fundamentals are so sound or i need to run for the hills because the stock has been trashed in a relatively short period of time and it's now sitting around 40% from its high >> yeah. i like the stock this is one of those that i've used bounces to lighten up on, but i've been dead wrong on this because close to 300 i was beating the drum and you've got to be in paypal. i've been very wrong in this name, and i really did not anticipate the relentlessness
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with which the market would be selling off the fin tech names and paypal was not nearly as expected and they came out and changed the story. the expectation was for 20% growth and 22 and they came out and said more like 15 and a lot of that selling was warranted and i had been wrong in the name despite the fact that it's currently trading right around my original average cost and i'm sticking with most of my position here and i'm looking to stay with the stock for the long term and i think pay pal ultimately will own very important real estate on everyone's smartphones we're not going to have ten fin tech apps and we're headed to a point where everyone will use two or three super apps that will enable you to do everything from paying your bills to buying
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crypto, trading stocks and having managed money on your phone, et cetera we're not going to want a woel screen full of these so i think paypal is positioned better than most and you look at sofi and getting the bank charter and a nice reaction in the stocks and that's not even close to where these names will have to go in order to beat that super app. i think ven nmo in sor stores i big part of the reopening overall. and this company is positioned better than any other so i want to stay with my core position for the long term. >> a couple of great days for sofi as we show you the stock on the screen lastly, doc, ford. you bought ford march '22 calls and this is a stock that got hammered yesterday and it was the worst day in eight month, and i remember we did it live on the show when we were flagged to it, and there was something to
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see. this was a stock that had such a great run and then -- bang, as you like to say, got hammered and now you got some calls tell me why. >> well, scott, there are six different strikes of options, pal options that have traded over 20,000 contracts and each one representing 3 million worth of stock this is very heavy activity and after that washout yesterday and do we know it's the washout? no, we don't, but we do know that they were just hammering on the stock and this morning it opened down and turn around and went positive and now it's back to unchanged or perhaps a little down right here, but i'm hoping to sell more calls against these march '22s i have two full cycles before march to do that and i like the upside here with the f-150 lightning and so forth out there. so yeah, i'm comfortable with
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the position, and i'm looking for more upside here >> all right good stuff, doc. thank you. let's get the headlines now with rahel solomon. hi, rahel. >> hi, scott here's what's happening at this hour president biden warns any russian troop movement into ukraine will be considered an inval invasion and he's made that clear to president putin a minor incursion might trigger a smaller response from the u.s. and nato allies. the cia now saying that most cases of havana syndrome were probably not caused by a foreign adversary. most cases that have been reviewed have been linked to known medical conditions or environmental factors. hundreds of american officials have attributed symptoms to brain injuries and the first at the u.s. embassy in havana a federal trial in connection with the death of george floyd they are charged of depriving floyd of the constitutional rights while acting under government authority and near tahiti, a pristine coral reef
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has been found that appears to be untouched by climate change researchers say the two-mile long reef is deeper than most and it may be protecting it from the bleaching effects of ocean waters and the find suggests there may be more unknown reefs. scott, i'll send it back to you. thank you very much. n hel solomon. johas more unusual activity trades coming up next. gets a. ugh ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay...
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all right, doc it's time for unusual activity tell us what you see today >> okay, scott lots of unusual activity today let me just see here a bunch of them went flying by me, scott. so, unfortunately -- >> i have cody doc? i have cody in front of me and i'm looking at the february 9th calls. go ahead february 9th. >> coty, scott does it better than me, folks $8.97. they are the february 9 calls as scott said big buying here. 22,000 and that's 2.2 million
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share equivalent so i'm in those. take a look at snap and this is a put trade. snap, with the stock at 37 in other words, somebody predicting at least a $4 drop between now and march, scott >> all right doc, i appreciate that thank you. netflix shares are higher ahead of earnings after the bell tonight. the stock down 10% in the month and we'll debate that next ahead of the results
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to comcast business internet customers. so boost your bottom line by switching today. comcast business: powering possibilities. all right. netflix is set to report earnings after the bell today. since the pandemic it's only beaten earnings estimates twice. jason, you own it. i watched julia boorstin on "tech check" earlier today tell us that international subs are the thing to watch >> absolutely. netflix has been a tough slay. recently it's down 14% year to date underperformed the market last year and it's up 11% last year, but yeah, the sub editions in media are tough to come by internationally, that's where the opportunity is and that's where the pricing power is they've got a lot of runway there, but it's an expensive stock.
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it's always traditionally traded at a premium so i'm not overly bullish on the name, i don't have a lot of conviction here, but they've invested a lot on the content library and hopefully that will benefit them going forward and going into the later half of 2022 >> sorry, jason. i didn't mean to step on your toes at the end there. dr. j, you own netflix calls and growth in the u.s. and canada has stagnated and everybody is now focused on international asia subs and the content spend and the pricing increase what do you see here >> well, just like jason said, stock down from $700 just a little bit ago it seems like, scott, now trading 523 and it's up 7 bucks on the day. overall netflix and it's one of those reasons that when i heard the folks, josh and the rest of the group talk about being able to weather a 20% drop in stocks, i don't have that kind of fortitude. options are a whole different story and that's why i can stick to things like call spreads in
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netflix or put spreads if i see negative we haven't seen people accumulating this one, scott, since basically november so right now i'm just continuing to hammer out weekly calls against march calls that i own in netflix, and i'll keep doing that because i don't see that big jump in upside activity that would bet me to basically bet along with the smart money that we'd go a lot higher i think it meanders sideways for a while longer, scott. >> okay. >> doc, thank you for that we will be right back. ♪ ♪
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all right, guys. i want to call your breaking news regarding this company. and you can see that stock down 10% on word that it plans to temporarily halt production of its bicycles and treadmills as consumer demand wanes, and the company is looking to control its cost that is according to internal documents obtained by us, by cnbc, in a confidential presentation the company said demand for its equipment has taken a significant drop due to price sensitivity and increasing competition, our lauren thomas who broke the story is going to join "the exchange" at the very top of the hour, so in less than 15 minutes from now you'll get more details on a report obtained by cnbc that is causing
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that stock to go down by about 10% on what has already been a devastating slide for investors. take a look at peloton shares trading at a near 11% decline. you just bought peloton puts, i'm told >> yes, sir. scott, i'm looking right now, i started with the 31 puts i've already bought the 30 puts as well. this thing is just sliding fast, scott. there was, like, 5,000 contracts traded at either of these two strikes ten minutes ago. and in the last ten minutes they're both up over 12,000 contracts. that's a lot of put-buying people are starting to react to that news that our good reporter is breaking. and, wow, these are falling fast these puts are up from 40 cents to over $3 like that literally like a heartbeat so, i'm keeping an eye on that i'll probably take a little off before the end of the show but, yeah, that's not good news
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for this company >> josh, we knew, and we said as much, and most people admitted the fact that there was no way that peloton was going to be able to keep up the level of extraordinary growth that it had during the pandemic once the pandemic started to wane the stock came down considerably as a result of that. reports over the last couple of days have come out of some extremely well-timed insider sales by the creator and ceo of that company and some of the other executives as well and now you have this internal memo obtained by cnbc on news that they're actually cutting their production now as some of that demand has waned. >> look, there are land mines all over the work-from-home segment of the market. and nobody's been immune to all of them. and i've been in some of those, you know, over the last two
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years where i overstayed my welcome. i made money, i could have made more, et cetera. but like out of all of those names this was the most obvious. just because of the sheer mania there was for people to get on waiting lists and get them delivered. you didn't have to know a lot. you just had to know a couple of things number one, most americans are slobs. number two, most people who are physically fit don't actually like to stay home. they actually prefer to be out in public. that's why they get physically fit. so people can see them working out. it's like a whole thing. i don't possess that gene, but, believe me, that's a thing and just think about the history of fitness-related companies on wall street. name one that's been a success there aren't i was on the floor of the new york stock exchange with you, judge, the day fitbit went public they put treadmills, giant treadmills out in front of the exchange i said, oh, this is a short. whatever the camera one was where people could watch you surfing and skiing, nobody wants to watch that.
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that didn't work bally's total fitness, disaster. go pro remember town sports, new york sports club, philly sports club? lol. none of these work because we're slobs. and the ones that do work are usually a component of a bigger company like nike. so this was always going to be a stretch. and then you think about how many people bought a peloton in 2020 or even early '21 that are now going to put these things on the market in the secondary market to sell there was no way they would be able to have that same level of demand for new machines. so, i'm not saying this can never work, i'm just saying out of all the land mines, this was the easiest to sidestep. >> so, jason, the stock's halted, down just about 11%. i get what josh is saying, and it's funny and all that. at the prior valuation, it may have been ridiculous but we've spent a good portion
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of this show talking about what to do with stocks like this. peloton may never get back to the levels it was, but it certainly may go higher than it is today no one's suggesting necessarily, i don't think, that peloton is not going to be in business in a year or two from now or even in a longer time frame than that. maybe now is a more reasonable valuation. what do you think? >> yeah. so this is a difficult one because i would say this is -- i mean, exactly what the headline of the story was, demand has been waning. so it's completely a demand story. even if you're throwing out the multiple narrative out the window right now, as it relates to demand, i think interactive fitness is strong, it's something that people are interested in. but the physical bikes and the treads where folks are getting past the variant and folks are getting back outside to do their thing, this is a difficult one for me and i must admit it was one that
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i traded in 2020, but for now, another interested i wouldn't put any capital work here >> okay. let me remind you as well that our own reporter cnbc's lauren thomas is the one who broke this story. there's the piece on i urge you to check that out it's about 12:55 right now in the east so you got about five minutes or so before she joins "the exchange" to give more details on a story that is causing a significant further decline in shares of peloton those shares currently halted -- actually they now reopened clearly because they're down about 16.5%. they may get halted repeatedly just because of those new rules at the new york stock exchange in terms of the way that stocks trade, especially when they move rather dramatically in a pretty short period of time so keep your eyes peeled there doesn't look like it's moving obly which tells me it's halted prab yet again we're back with "final trades" right after this
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oil's move lately, very big story. there's mark fisher, mbf clearing ceo, one of the best traders of all time, certainly with oil he's joining us tomorrow to talk about where crude is going next. can't wait for that. let's do "final trades." dr. jay, give me something quick, please. >> starbucks, scott, 99 calls that expire tomorrow, bottom >> okay. brenda, what do you have >> abbott labs
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driven by all those covid tests. >> okay, jason snipe >> bank of america steady loan growth coming back, stay long here >> josh brown? >> carlyle group >> let's take a look at peloton again as we head out before we hand it over to "the exchange. again, that cnbc scoop, shares are still halted, the company halting production of some of its bicycles and treadmills because of waning demand it is a story we just broke. you're going to get more on it right now on "the exchange." guys ♪ thank you, scott hi, everybody. i'm kelly evans. peloton will reopen at 1:07 p.m.'s lauren thomas just broke this story she's going to give us all the details she has in just a moment rk is rallying, the chinese stocks are flying, the semis are higher the nasdaq is leadin


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