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tv   Fast Money  CNBC  October 8, 2019 5:00pm-6:00pm EDT

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i don't know what the market is waiting for except it wants this round of trade talks out of the way. quit worrying about handy capping. and then we'll see we're still in the anxious range we've been in since august or so. >> we close down 1.5% on the s&p fiechd ut out of time that does it for "closing bell." >> "fast money" begins right now. >> live fl the nasdaq market site over looking times square this is "fast money. our traders on the desk. tonight on fast, forget disney buy why tobagole could be the biggest threat to netflix. we'll explain plus a trader says this stock could set up for a breakout process we bring you the name but a double whammy for the markets. stocks finishes in the red as the u.s. turned up heat on china. the s&p 500 losing more than 1.5% on the day. eamon javers with us from the white house we are kick it off
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with steve liesman and fresh comments frommed fed chairman. >> jerome powell sieve times said interest rate policy depends on the economic data he added the economy is overall in good shape despite troubles on the horizontale >> many indicator show a strong labor market solid job gates. unemployment at half century low and rising prime i age participation. there are risks. prin will i from global developments growth around the world mass weakened the last year and a half and uncertainties apprehend trade and, brexit and other issues close risks >> what's did are does it mean for the outlook process? he appeared neutral about what the fed would do at the late october meeting. markets took his comments as affirming expect aches for rate cuts jp morgan if the fed leadership wanted to push back gesticulate against expectations we think
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powell would have chosen language not calling out downside risk. speaking in denver, the fed chair said the central bank will increase the size of the balance sheet on permanent days. reducing the policy from last year which swild swelled during the financial crisis trying to get more to a normal level. >> growth of the balance sheet for reserve management purposes should in no way be cuffed kuchzed with the large scale asset purchase plasma we deployed after the financial crisis neither of the recent technical issues for the purchases of treasury bills we contemplate to resolve them should materially alter the stance of monetary policy. >> this was an opportunity for powell to change the market expectations for the october meeting. and he seems to have chosen not to do so so another quarter point will be delivered by the fed around halloween, guys. >> steve increasing the size of the balance sheet can that be be considered qe. >> if you want i mean, look- what they have to
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do is permanently replace the temporary operations they have done to get -- dsh to provide greater liquidity it's about $200 billion of work they need to do. the smallest quantitative easing they did was 600 billion and then they grow the balance sheet based on the economy i want noh an intent to lower long-term interest rates it's an attempt to provide ample reserves to keep the funds rate where they put it. it's not intenten and not in actual size or not in execution is it quantitative easing i would argue. >> steve liesman now to the other headline rocking markets today, the trump administration turning up the heat on china ahead of thursday's trade talks let's get to eamon at the white house with the details. >> the trade talks are scheduled for thursday and friday. that's when the higher level officials will meet to hash out all the differences.
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but ahead of that what we have seen now is in flurry of actions and threats back and forth from the chinese side to the u.s. side and vice versa laid out some of them here on this graphic you can keep track of everythinghappening. the u.s. versus china first of all, the u.s. is talking about restricting government investments in chinese companies. that's one idea under discussion also black lifting a number of firms on the chinese side. and then finally the visa restrictions we saw on chinese officials in the wake of the crackdown that we saw in china on a minority group there. all those actions or threats taken by the u.s. side on the chinese side, though, this action against the nba is one key area where they are putting pressure on an american entity in a visible and very public way. and we're also seeing criticism from the chinese media anyway of apple, inc, over an app that some protesters are using to navigate in hong kong during the
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protests saying that apple is not sensitive to the feelings of the chinese people a lot of tension points ahead of the talks thursday and friday. we'll see if any of that moves the needle the president says he doesn't want a small deal. he still wants that big deal he is talking about, the big unknown this week is whether this impeachment effort against the president is going to change the dynamic here in any way as the chinese sit down with their american counterparts, melissa. >> eamon, is the chinese delegation in town >> there are lower levels here now yes. i don't know when the higher level officials will be in town. about but we have seen some already arrive so yes but we'll see whether they actually go forward with the meetings because at this point you would say that just about anything could happen here the expectation is everybody will sit down around a table and hash it out later in the week. >> eamon, thank you. eamon javers at the white house. this seems to be like the -- we
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are turning up the heat gradually degree by degree as we approach october 11th. >> it's that whole you put the frog in the thing of water. >> boiling point when does it feel the boil? >> i'm not sure. >> are we get bag being to frogs. >> nobody does that to frogs. >> nobody. >> no frogsy injured or harmed. >> in the making of the show. >> making of the show. >> but. >> the more you know. >> love the music. >> and you wonder if -- you know mr. powell's comments today, president trump said is a now the fed finally has my back. now i can ratchet up trade tension talks. without question i'm a conspiracy theorist it makes sense. wall it nag you want, that's exactly what it is quantitative easing. because this time last year we were on autopilot for reduction and now on autopilot the other way with the s&p 500 effectively at all-time highs. i think it's crazy the reason the market soltd off
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in my opinion was the rhetoric we talked about president trump. the fed might have your back but, again i'll say again, this started in march of 2018 it's now october i don't think we're any closer today than we were 18 months ago. >> so eamon said something interesting about the trade talks later this woke. he said anything could happen. i think that's unically anything could happen i think it's likely not a lot happens. >> isn't that something. >> well, zblot i think that falls under anything back to the boiling frogs. >> my point -- my point very simply is give the rhetoric early this week and over the weekend the likelihood of a broad deal that is going to be great for economic growth globally and great for the stock market is not likely at this point now we have the situation where we get some deal where each side could maybe save a little face. maybe that's focused on trafrs or everything falls apart. the president has a tantrum pulse the negotiators which don't think for a second that couldn't happen. that could happen. and i think that would be more of what we had today on in the
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markets we would see the s&p lower on those. >> i would think for the chinese saving face could mean pulling out of the talks walking from the table and not engaging. >> what should be very concerning for the markets is not only is doing nothing something but walking away is very bad and the which this administration rightly or wrongly but treating china much like we have treated outlaw at law nations. apologies, russia. when you start to talk about restricting visa access. you start to talk about some of the restrictions more on the sanctions line with nothing to do with trade. you get into a treatment that's very different it's very insulting if you are the chinese. again i'm not speaking to is it warranted or not i think china policy right now is very popular in the country but when i look at markets and what the reliance on the fed and today back to was this qe or whatever it was? powell went out of his way i thought he made it clear to
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say don't confuse balance sheet management with a larger scale asset purchase like we used to do that was the reason where the market clawed back almost all it lost gone to sell off and effectively closed on the lows i think less fed is certainly still a big issue for this market even if today he did say we'll leave our options open for the next three weeks. >> i still think the restrictions on the chinese and some of the other rhetoric going on, i think that's the bigger story here we all focus on powell we all do that for all the right reasons. we understand and basically according to liesman now we're talking about interest rate cut again. maybe before the end of the year that is almost a given sort of baked in i think still it comes down to the trade war thing. that's why we sold off that commentary today was enough to get the market really pushing do the zoun downside process we have holding mel at about a 19 vix. finished over 20 why? because late in the day late in the day even though revisiting the low late in the day that was
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a harsh selloff. that was a nice big move to the downside that has stirring up concerns i think people have. i don't know i grow with you on one thing, guy when you said we are no better than we were 18 months ago in terms of negotiation maybe we are better because both economies are suffering. i think the chinese are suffering more than we are by a significant amount but i think we're both suffering to some degree because we are starting to see weakness in some of the numbers we aren't seeing the win we were seeing for a while and maintaining as well as we were we have more losses. i think there is pressure on both sides right now and that will got get us further along maybe. >> what did the market moel tell with us the accuracy. >> we have powell saying data depended .fed future went up about five points -- five process percentage points as he was speaking he got up to chose to 807% likelihood of a rate cut in october so what do the markets tell us the markets told us that china
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trade will trump whatever the fed can do but the powell put is debt. >> that was my point. >> it's no longer -- if you ever thought it was it's no longer. >> that was the point maebd i didn't make it clearly enough. but i think that's right when i say i understand what pete says, both sides are absolutely the hurting. but i think for president trump he wants to save face. he is a very proud man everything is about winning. and president xi in china, the chinese are very proud people. i'm hard pressed to belief they are coming to some resolution over the next -- that's my opinion. we'll see how it plays out what does it tell us i have no idea why the dollar is at strong as it is making zero sense to me tp but gold topped oh out, the miners topped out in early september, all seem to consolidate president levels i think the trade back on and again we have this a while is the gold trade if there is a winner out of this it's gdx and gold it's disbelieve to guy's point you hit on the dollar in but in
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terms of galled. paper today. unusual activity was there again today. we have seen it time and again it had taken a pullback down to where it is now but they're buying and they're buying time >> haven safe havens with are back in gold and dplar. >> the santa trade is sort of wak in terms of shall it dsh yeah the silver and gold. >> santa and see santa trade. >> how did the song go, pete. >> i'm not doing it right now. >> silver and gold. >> it the burl ives trade. >> burl ives. >> back to you in the joshua tree years. >> done for that the bottom line is we have a case where if you listen to the fed who is steep ening the curve talking about treasury purchases that's having people reaching for yield and pushing lower in terms terms of the deplacing frayed semis up 2.6%. they are continuing on the front line of will they woept they, traded back down to the 50 this
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was as big a down move as we have seen in the semi conductors in weeks even though a lot of roll tilt in the space i kind of agree with the crew. it's difficult to see how we break out of some of the trades. and that continues to support i think whether it's staples, utilities, whether also defensive kind of big box retailers which are trading at premiums that i think you have to be very careful about because if all the stuff is coming down as everybody's calling for it, the consumer is going to be in a very difficult place as soon as the end of the year. and i -- i mean that because we are going to see the fed was asked about payroll numbers. talked about the downward revision to payrolls at 153 average the the past three months be careful of that. >> it feels similar but in different ways to q 4 last year. at the end of the day the government shutdown was the thing that took out the air from the consumer in the near term and the negative welt effect with the stock market going down
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process utilities and staples acted well until november, late november the s&p already in adown turn last year but when the bottom fell out in december utilities and staplings with went down 10, 12% in line with the market again you see utilities trading at high valueses and staples at high valueses. you have to expect the s&p takes a leg lower that those two groups will follow schutt. >> that's exactly with what carter said yesterday. >> it i was in the market zone >> it was in the market zone that fancy segment. >> got to check it out coming up the blue jeans indicate being lee va shares after results, what they say about the state of the consumer. plus a allgaier to the netflix in the streaming pace. not who you might expect but the kids love it times from times square in new york city. much more after this much more after ♪his
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after hours. here are the take aways from the earnings report. first it continuing to expand internationally. revenue up 14% up 9% in asia. process experiencing troubles in the americas where it saw a 3% decline in net revenue coup in part to weakness in the wholesale business lee sigh alsos says the stronger u.s. dollar will negatively impact full-year results now after going public in march and pricing at $17 a share levi stock has struggled off by by more than 22% from the april highs but got to upfwrad one from jp morgan and one from guggenheim talk bag unlocking more growth from the direct to consumer channel and expanding outside the u.s. the conference call kicked off just and we'll keep you updated on anything the management sasz for now the stock up 0.5% in extended trade >> trouble in wholesale equaling trouble distributing through places like department stores, et cetera. third parties. >> right and they're saying wholesale
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around 30% of the business and trending down as other parts of the business grow. it gets to a place where -- it may seem easy to say this now after the stock moved. although it had a rally of a off the terrible run whie the premium when you look at the apparel companies even though koovg carving out a brand trade. do you have a company like this trading north of 20. i think the market is making a correction on something that made no sense at that time. >> fair. but i have it closer to 18 i understand what you are saying forward valuation in terms of forward multiple but then you look and say wait a second, operating margin 12.2. process inventories which are important are flat year over year sales growth 3.8%. you're saying to yourself, maybe it's not as ridiculous a stock as you would think on the surface. yorng you have to run out with bowing hands but i don't think this is nearly as negative a story as you might
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look a at on the surface it's not as expensive as might might think. >> when are those stone washed. >> guy wears the. >> we have gone through a number of. >> he wears the stipper. >> 501. >> if you look at macies can't get out of its way at $15 been like this for months at 10-ier lows whatever the heck it is. it tells you we are overstored in the department store. >> but are with are they dwroeing investing in online? we talk to direct to consumer that stuff you lack at asia, asia china and europe great growth over there. where are they growing and where are they losing? losing in the biggest area almost to be expected because they are pulling away from all the -- the tj maxx and everybody else pulling away and trying to get the better margins if you focuses on where they grow, i find it impressive. >> well. >> up 14% in china, 9% in
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europe there are growth juries that are impressive and we know they are moving to the women's category it's like lulu going to the men's category it's something they need to expand a are doing it. >> by the way, it we just -- the if the folks at home want to sent gifts whiches from time to time, 501 joins, 34-32. >> that's interesting -- that's kind of stubby legs isn't it. >> 34, 32. >> he has a small torso. >> i think it's a 30 >> up if i could get them they content. >> 34-30. >> they wind chill the show, levi watches. >> we're not getting threw the door of the studio there are going to be boxes of boxes of 32 x 34. >> the teen haves spoken, the kids crowned a new king in the streaming wars we tell you who and later the trader says this
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to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium. welcome back to "fast money. more bad news for netflix as piperafterry reveals the real streaming king may have lost the crown. retires get to jewely boorts within the details. >> netflix shares under pressure, down about 30% from highs the company hit on may 1st. but while the stock has been dogged by concerns about a slough of competition hitting in the weeks years and rising content contests one big concern could be a
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nearly 15-year-old company youtube. the free ad supported service making gains on netflix giving up the long-held lead on daily video consumption among teens. according the piper jahfari teen survey the youtube has the biggest piece of deanno teen dale video consumption at 37. five percentage points higher than six months earlier beating netflix which has 35%. that share has dropped 2 percentage points from the prior survey now it's worth noting that both of the company dwarf traditional cable tv clinicing to 12%. howl u and amazon flat at 7 and 3% respective. >> analysts are weighing in on netflix ace rivals aegis capital lowered the price target for the stock and reduced subscriber estimates following analysis of usage in 56 countries. now the stock was bolstered a bit by more bullish report from
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oppenheimer with an outperform rating on the stock with be noting data on netflix in india looks promising and the third quarter looks strong enough to keep the service competitive certainly we have a big mix of reports today. but netflix did -- netflix shares ended the day down about 1% back to you. >> sounds great for youtube pu but is google monetizing this leads among the teens? can it zwloo google has monetized. though remember we don't know how much revenue youtube brings in there have been a range of estimates. but the question is what teens are watching on youtube because some of that content is professionally generated which monetizes at a higher rate for the creator putting it on whether a traditional media company and also for youtube it's 3e67. and there is the uetz err generated content which has lower add rates. it's a range and we don't have
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that much information because google doesn't disclose anything specific but it has been a huge money make are though you have to wonder if you look attic tok, did youtube miss the tick-tock trend in could youtube have been tick-tock if they were more aware of rising trends. >> julia, thank you. should netflix be worried? >> about let eye of things i mean when the disney announcement came out good for tim by the way they should be worried about a lot. ant reed hayesings came out last quarter and said you know, the competition is there they seem to be worried the first time since they've been publicly traded. but in terms of gogel, it's had -- it's had activities not unlike amazon, facebook. twice fell to 1,300 no you to 1,200. you have to ask, although they might win the war, the stock hasn't traded particularly well. i think netflix at 250 level we flag the number of times it held it's a tradeable bottom. but in terms of worried to ens a
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the original question absolutely. >> they need another quarter like the last quarter. >> i think this whole first of all just streaming wars and where youtube i wanted to grow up to be a baseball player my 6-year-old wants to be a youtube are. i didn't become a baseball player in case it wasn't avenue. >> you are hurt, i get it if you look at the improve roien youtube and you monetize this. bottom line this is the a arguably one or two global ad company. global media leader in the world with a valuation that makes a lot of sense and i realize there is regular regulatory risks but this is a name you have to own youtube is an important part of that. >> i would think youtube sits right in the target, right, of all the regulators if there is regulatory risk for google, yubtd. >> what kind of regulatory risk. >> it in terms of the fear that it's video -- like extremist videos are uploaded there, that
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it hosting chats by predators. >> i think. >> you know child videos >> nobody wants that, right. clean that off the site is good news for the company. >> right if they're able to keep up with it i think is your point. the idea of some sort of security measures they have to do to be able to keep some of this. >> costs money. >> it does and that's the money they need to pour in there is competition everywhere we know. and netflix halls had the high valuation and one of the things we hung the hat on is international growth and oppenheimer is the bullish thing talking about indian appear promising growths interest will that happen that's what we are banking on if you are long the stock the international growth process can it kick in because we know between all of the providers there is becoming big are and competition. there is no doubt about it. >> yeah just on netflix, the competition for eye owe eyeballs talking about teens, i think that netflix said that e-sports is as big a issue as anything
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else losing marvel and lucas and that content. back to gookle google this is an important point none of you made yet. >> tell us, dan. >> good thing he enlightens us. >> let me tell you what they look relative to snapchat and facebook they being lack the social and the ability to move the content around i have teenager daughters and see how they use it. youtube takes a lot of time and more so than netflix but the ability to share pictures and videos and messages, that's the killer app to use. >> the tick-tock piece of the. >> tick-tock i think is really important part and listen, i thought this a long time. i think a huge blind spot sfoot spot for google oh or alf bet with 7 properties a billion monthly active uters is they have no ability to move that around other than g mail and every attempt at social has not worked out well. >> should they buy some. >> they should by twitter tomorrow and snapchat and just aggregate them that sort of
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thing. but to the point about rgt regulatory stuff it's ard to do that the notion they could chis case ih a owned tick foik is surprising to me. >> i love the tick-tock. >> i have no idea what we are talking. >> those are good minutes. >> you know funny you say like that the green apple tick-tocks tremendous. >> you can't eat a whole thing of them it's very bad. >> a lot of sugar. >> coming up the big brand risk as tensions flair in hong kong we break down what's at stake. plus tim eyeing a stock about to break out and gives us the name and why he says it's a home run. much more "fast money" straight ahead. >> y owned. with more than 85 years of experience over multiple market cycles. with portfolio managers who are encouraged to do what's right over what's popular. focused on helping me achieve my investors' unique goals. can i find an investment firm that gets long term the way i do?
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. welcome back to "fast money. markets having a wild back half of the day swinging on jerome pall powell and mcheadlines. but ultimately in the red. with markets gloomy we thought it would be a great time to pitch a stock poised for the breakout tim at the plasma. >> we have the power pitch with sysco. i want to tell you wipe. it's been a difficult run for the company and that's why it's an opportunity and sets up well. the core business, still a massive dynamic for them is still 20% into a refresh cycle
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if you look at the security switches for example this is a case where 840,000 enterprise skmerps have to upgrade. and frankly i don't think even in a difficult environment for cap x and op x can people can avoid this one of the important things is security this is a massive opportunity for the company and this is medium or longer toerm student por siskt o when i look at security, as relates to facebook or individual companies at risk. the we hear about the hacks. siskt o is a major player this is a 37 billion-dollar business backup about 907% services and recurring revenue. this is a huge opportunity it's a huge opportunity for a multiple upgrade for the company. and then finally again the switch to software, know know this has been a secular story for siskt o, a good one. it's not often you hear about this microsoft is another company making the shift fl the recurring revenue to the cloud niece guys are hard from
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hardware to software and and if you look at how we value the company. we talk about a blended multiple for a.m. and disney. looking at sysco this is a software revenue hybrid blend with the hardware business, still dominant as a roughly 17 times blended multiple gifting you a 25 times software multiple, i think this makes a ton of sense and in the megacap techland this is a best valuation out there. >> any questions for tim on the desk. >> yeah. >> tim last quarter. >> hi, dan. >> you know heading into that print, i mean, i think verch investors smell everything you outlined and that was a reason to be oft minsk for the system near the multi20 year highs. >> that outlook and how quickly it changed based on global trade and that kind of thing why would you expect that change oefrp the last few months. >> you're talk bag a move clearly this company has gone from -- i wish i could draw
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today. anyway we can see what it did. the bottom line is a case where the company i think rightly pointed out that the environment is changed and they are as susceptible maybe as anyone just because of the sheer size but to me if you look at the multiple here, should they be punished in a way thank even some of the other companies in whether the semi conductor space or those with a huge enterprise business maybe microsoft isn't a fair comparison but that's been very defensive i think sysco is sober in the outline look that's not bad for investors. >> i mo pushback tim do you think it's late in the dwam to get in security? is that side of the business being commodity advertised in this environment >> no, no, no. of the companies that are able to exist across multiple domain platforms, that is sysco that's the reason they dominate
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this place we have heard about other security players even had a couple of ipos that have gone well for the early stage because people get the security trade i think we're early on security. i think the fortune 50 oh companies have to be lgbting a lot of the revenue in op x to. >> fire eye is up 4.5%. >> time to vote rue are you buying the stoo sta pete has written a tome. >> my final trade today. i bought cals the other day more cull buys tim i'm with. >> you can you read throughthe four points. >> chuck rob and a good ceo. transformed not quite with microsoft but moving towards it. i got to tilt it a around. >> doing well. >> there is dicht stuff in there you want to see. long and short tim's are it. >> dan i'm passing here. >> mold op i like the stock higher three months ago but i think that guidance that they gave more this current period i think it's the sort of thing that they
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extend out when they report in a month. you'll have an opportunity to buy lower closer to the december 2018 lows it's a up one down one scenario i think 80s great risk we regard given the unserpent. >> it's home that was fantastic. i know there is a lower third that we have to deal with i'm putting this up and saying nice job by tim buy into the november release. and i think to dan's earlier point i think chuck robins and sysco were punished already for the commentary they made you have seen it bottom it's not a bad play. >> okay, dan not -- we can do this all night. >> dark cloud over the. >> you guys voted but more important are the people at home voting to the pitcher on sysco vote in the twitter poll at "fast money" we reveal the results later np backlash in brand risk as tensions flare in hong kong. our traders weigh in on what the
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what's at stake. and why a financial stock could spell trouble at the car lot details when we return the "halftime report" honors america's veterans again this year if you are a veteran or part of a military family we want you to see us live at the women's permual in armgt, virginia november 8th process tickets free, email your name and phone number to veteran tickets at cnbc.com. the deadline monday, october 14th come see the halftime team honor america's veterans at the women's memorial in armgt virginia november 8th. see you there. forget they're in and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated.
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welcome back to "fast money. anti-government protests in hong kong showing no signs of easing. and no consumer facing brands caught in the cross hairs. the vf corp. facing backlash after several submissions in the sneaker design toughnys took down a twitter ad showing a model making what appeared to be a gesture used by
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anti-government protesters in hong kong. all following backlash in the sports world chinese run tv stopped airing games after the general manager of the rockets sent out a tweet supporting demonstrators as tensions flare in hong kong are big brands at risk in china. >> i would say they are. no doubt we are seeing -- this is part of the trade war. and part of the trade war becomes all of the back and forth. and they're obviously seeing what president trump is doing. i think there is reactions that will continue and i think that's going to be a problem. and that's part of what we all have to factor in as we invest in this market because you don't know daily which one of these is going to be attacked first. >> and there is a second derivative to this and maybe this is what you imply but the fact is those companies here will be ridiculed by the audience saying hold on you have to stand up for freech free speech if you don't you are a puppet and i don't want to support you. it's a difficult position to be in. >> burned on both sides. protests here from those people who want the company to support
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free speech but also protests in china for them wading into geopolitical affairs. >> pete mentioned this is part of the trade war and bhaes what's part of american brand our white house doesn't have a clear view about what's going on in hong kong right now that's tough for u.s. multinationals right now because it would be easier if the nba could get behind what the president was saying we don't have a clear view one other point, the chinese mainland people, they feel -- that he kind of behind the government here. they get the news one way. they think this is a protest against the government they live under. it's a tricky situation that's playing out was long as the. >> breaking news on johnson & johnson. seema has the details. >> reuters reporting that johnson & johnson must pay $8 billion in punitive damages in a trial over risk of male breast
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growth linked to risperadol. we should note that jury awards like this often get reduced in the process of appeal. but, again, this is so far what we are learning from a report from reuters the stock down 1% in after hours. but a name we will watch for now, back to you. >> thank you very much risperadol is used to treat mental and mood disorders. this could be appealed the stock is down right now. but this is not -- when i heard of breaking news on johnson & johnson involving a juried or trial i thought it was opioids, talc a number of things could have fallen there. >> how how do you trade the stock? it's had bounces and people will say correctly on valuation it's cheap but how can you -- in my opinion you have to wait until october 15th when they report to hear what this they say and how they guide forward before you take a stab at the stock. in i'll say the 125 level held a cup of times but it's been a couple of times. so i think you dwt to wait and
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see what they say on the 15th. the stock trends lower until then. >> you need to check back the reserves they have for litigation for these things. in the opioid issues we heard them on a couple of settlements against them they said we are feeting it but they also indicated that they were not against certain other jurisdictions that were bringing cases and maybe were not going to he will it us that day online but we heard those were wigs where they may have penalties as opposed to those protested with you either way, typy relative to the potential size of exposure. right now i'm not sure the market knows how to value j & j opioid exposious because of the political ramifications. i think they know how to value this process today's announcement i think a lot is in the litigation reserves. >> in a no touch pete in your view. >> yes, so many other better places to be right now and wait. >> such as. >> i love -- merck, pfizer, bristol myers better spots.
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>> betting upon a rocky road for shares of generally mountains lock at our cramer cam jim talking to the domino ceo on the back of earnings results the full interview on "mad money. live at the nasdaq in metis square much more "fast money" still ahead. make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty, because you're better off healthy. ♪ ♪ ♪
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welcome back to "fast money. jp morgan slamming the brakes on the consumer the firm downgrading allied financial warning of increased fundamental risk and warning that a looming recession could take a bite of auto lending. ground grading allied from neutral to overweight. cutting the price if 35 to 33. while it was a you have tough day for banks overall the bigger story might be jp morgan's pessimism around the consumer. they say next year could be the problem. >> i tried to make the point again. i've i don't know if af done it don't confuse the want to spend with the health of the consumer. gdp is north an 54%. u.s. consumers will spend as long as they feel things are good they feel good when the stocks go hire.
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when whether or not they own the stock market that's a stock. when it goes pare shaped like this last year wind chill out quickly consumer spending stops stops on a dime. >> the performance of allied is up 33% this year. >> they've been have have been very sensitive to the move down in rates high sensitivity there but some of -- i'm not a dedicated credit guy some of my smartest friends in the street are credit guys and looking at regional banks. looking for cracks they're not tell you credit is getting better that's the trend we're at. i think we peaked in terms of the spreads on credits in terms terms of how heit they are and you need to watch in high yield trade. it's important. >> yeah. >> i think it's a tough investment right now i own calls in allies this stock. >> in allied specifically. >> they made a significant move up you can see on the charts but am i nervous about the banks? absolutely they managed through it. we talk about the big banks all the time but there are regional passengers out there today was a
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downgrade foor us bank it's a buffett nature. it has upside but doesn't mean it can't pull back as the market like what guy is talking about over. >> with jp morgan isn't the only wunl saying trouble in the autos. another one is pumping the brakes dan nathan breaks down the action. >> puts upon g m2.5 times that of calls different trades were saying different things there was a sell are of december 33 puts. 30,000 times of the trade i want to focus on was looking to be a balish roll from january 2020 to the november 33 puts, 10,000 times it loobld opening buyer in the november 30s here. 10,000 times, like i said. these things break even below 30 and i think it's interesting with the levels. look at the chart. this is the chart since start of 2010 if you look at the move we have had over the last month down about 15% it places gm stock
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right below that uptrend that's been in place since the december lows, not a great spot when so far. let's go to the chart since 2010 when the stock reipos you see the uptrend in place from the 2012 lows. we're debting close to there so here is thething. you have to think about we know the auto strike, the gm auto workers have been out for about four weeks now some analysts think that's costing the company $500 to 100 million a day. i think jp morgan said it's cost them about $1.0 billion those are the reasons if you were long gm and hoping for the consumer uptick you might look for protection this one has had a precarious technical spot we don't nope the results. we know in about a month or so process ethis company reports earnings if they don't have a solution to this strike it's going to be a dire outlook going forward. >> are you in gm. >> i'm in gm and the issue of restarting production is a big deal for the company process the
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balance is sheet doesn't concern me whereas ford it does. on valuation it certainly is defendable here. we priced in peak auto was gm for the last two and a half years. i don't think the market is surprised by in slowdown but i think the structural issues at gm might be issues >> if we priced in peak auto for a couple of years, why be in the stock at this point? >> that's been -- that's been the point i've been trying to make po ford is worse than gm "g" has as had oemts it's currently at 40 and been there a number of times. this bearish bet is interesting given the level it's agent .october 29th is the level. quickly dan said something before the show when he said when dan's first hit on the show back he said we were mean to him. i can't say exactly what he said >> i heard you is a i it. >> he is fragile. >> what are you saying
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>> i arbor i that up because tomorrow on the "fast money," tomorrow is wednesday we are having somebody on the maiden voyage doing oa. >> >>, supernice. >> we're not treating him like we treat you you dan. >> sorry about that dan. >> sorry, dan. >> go off now. >> tune no the live show for "options action" friday 5:30 p.m. eastern time. p.m. eastern time. up next, the final trades. ♪ ♪ ♪
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pretty close >> ooh. >> you know what song makes tim feel safe and secure at home tony braks top america not buying the pitch closerest twitter pole a a% said no 45% said yes. >> on a bad tape i think it's a victory. >> final trade time, pete. >> going with unh call buying today. i bought it giddyup zwloo tim seymour. >> let's say i gave you all you need to know sysco i forget the chart i think the fundamentals are interesting. i'm not a chartist. >> bank xlf sell the rally. >> the song is miserable
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but the lyrics it's like jace. >> tony a regular watcher of the show. >> he is the one. >> gdx held one and a half a couple of zbliems "mad money" with jim cramer starts right now. starts right now ♪ my mission is simple, to make you money i'm here to level the playing field for all investors. there's 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 to educate, teach, put it in context. call me at 1-800-743-cnbc or tweet me @jim cramer why is it just so darn hard in this market to make y?

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