tv Fast Money CNBC July 24, 2015 5:00pm-5:31pm EDT
kind of weird. but taking over the steering system is -- and the brakes is scary stuff. >> great to have you here. >> thank you. >> we really appreciate it. that does it for us on "the closing bell." wonderful you have to here on this friday. enjoy your weekend. "fast money" is up next. live from the nasdaq marketsite overlooking new york city's times square. this is "fast money." i'm melissa lee. the traders on the desk are tim seymour, david seaberg, brian kelly and guy adami. tonight on "fast" it is official, oil in a bear market. and one of our traders thinks this is only the beginning of the slide. we'll tell you what it is he's looking at. plus socially awkward or socially acceptable? facebook, twitter and linkedin on board for results next week. which name could bring the biggest surprise? our traders take their position. first to the big story, the dow closing to near session lows having its worst week since january and is now negative for the month. meantime the s&p and the nasdaq were busy logging their worst weeks since the end of march. more pain to come especially given next week is going to be
the busiest week for s&p 500 earnings. david seaberg. >> we were 2-1 better for sale on the desk. when you have some data that comes out that's a little bit skewed and you also have some of the biggest growth companies like a biogen come out and say the earnings aren't great, it scares people. the entire biotech sector took a sell-off today. you know, pushing everything else down. look, it was a pretty decent sell deck. >> we've talked on this desk on and off whether the breadth in the market has kind of disappeared and how negative that could be and the extent of the negativity, and i have to say when you start to see some of the moves we've seen even in some of the big cap stocks like amazon and google over the last couple weeks that to me is also another sign that you don't -- you're not supposed to soo these types of moves. if you look at this week earnings were, eh, not so good. but if you look around the earnings spectrum, a lot of major asset classes were under a ton of pressure. bond flows were one of the biggest we've seen in months last week. emerging markets down 5 1/2. commodities down 4%. it's a very scary time. markets don't to me feel like they're within 1% to 2% of
recent all-time highs, which is where we were on tuesday. vix up 13% today. not a time people are feeling comfortable. >> did china concerns rear their ugly head again today given the data we got overnight? >> somewhat. a little bit. i think a lot of that is priced into people's models at this point in time. i think the bigger thing today was actually the u.s. housing. we had that number that came in really bad. not only that, when you had great earnings like amazon had, they made money, we've had a couple blockbusters and the market couldn't hold its gain. that to me is a big sentiment change whether it's people taking profits or there's something else going on and we'll talk about commodities in a bit but that is concerning for me going into next week. >> it was across the board. david mentioned biogen, certainly had an impact on the xlv, the health care sector, energy, materials, financials. >> banks. if you look at what the s&p did, we traded back toward all-time highs late last week, early this week. vix pushed down to 12 like we
talked about being support, and then everything unraveled. i think you're at key levels now for everything. ten-year yields, 2 1/4% right there. that's been support. the russell, the iwm, 121 right there. that's been support. the transports have been lousy for a while, so forget about that, but the s&p's the last one. 2050, 54's been support. we'll see next week. >> where are we then in what we do with the markets? do you look at this and say this is your chance to buy the market? >> it depends how long-term your outlook is and how much risk you want to take on your books. i sold financials today p i sold citibank which held for a long time. >> you sold out completely? >> i sold out completely. i sold some blackstone. i cut that position in half. we're plates where couple of these companies are starting to run into some questions. the private equity space and people dealing in less liquid assets, that maybe one of the reasons why blackstone sold off more than others but when i look at markets right now i think it's a time that actually if you look at the commodity space and you have a longer-term outlook it's a very, very interesting
time but i'm not sure now is the time you have to get in there. >> obviously extremely bifurcated. i look at the very high growth sectors and say they're starting to show signs of cracking a little bit here. especially the larger cap biotech names. when you see them start to pull back like this it gets very concerning. it's scary. i pulled out of the market completely about a week before earnings and i'm staying out for a period of time because i'm really worried about the market coming into new lows. >> what do you do here? >> i don't think you have to buy this dip on monday morning. i think you can wait. i think you can wait and see how earnings come out. we also know from guidance that earnings next quarter are actually going to be in earnings decline it's looking at right now. quarter over quarter decline. we're only a couple percent off the high. you don't need to rush in and buy this market. i think if we get a 5% or a 10% correction then you can reevaluate. >> who cares what you thought of the price avgs amazon, pretty much closing at the lows of the session. granted, still 10% increase in today's session despite the broad tape. >> xwroerd market didn't help. it it opened up 10% and closed up 10% we'd be saying what an
incredible day amazon had. it's all relative. maybe it shouldn't have been that high in the first place although i said last night you stay with it and i do think you stay with it. tim and i went back and forth a little bit. we'll see what happens next quarter. but the last three, four quarters for amazon have been fantastic. i think the next couple will be fantastic again. so i stilt think that stock trajectory is higher. >> let's turn to a major culprit behind today's sell-off and a story of the week certainly and that would be oil. down about 6% this week and b.k. thinks the commodity is actually heading lower. b.k., what are you seeing? >> there's a lot of moving parts with oil. you had mentioned china earlier. that is one thing that has been baked into this already. we already know that story. but i wanted to focus more importantly on the u.s. fundamentals and the fundamentals behind what's going on in oil. so first chart i have here, u.s. crude oil production. now, remember, we have had a massive decline in rig counts. we were up about 1600 rigs. we're now down in the 700, 800 and even today we actually picked up a little bit in rig counts. even though rig counts have cut in half, look at this this. four-week moving average of oil production in the u.s.
it's been going up. it's stabilized and may be turning down here. but we're seeing producing an awful lot of oil with half the amount and even less than half the amount of rigs. so when i look at oil, let's take a look at the next chart i've got here. here's crude oil. and we're looking at a couple major things. we had the big drop-off. that was the initial panicked selling of oil. down here we've got $41 marked. that's your most recent low. and down here is about $33 marked. that's your 2008 low. so if we have a stronger dollar and increasing supplies, we might even get increasing supplies from iran, we may be getting increasing supplies from libya, just the supply side of the story could push oil to test those 2008 lows. now, those 2008 lows like i said are between 33 and 41. take roughlit middle of the range, somewhere around $36, $37. you would think that markets would probably overshoot those lows a little bit.
in the 30s i think is a very reasonable place to see oil fall to. >> this is a choice of wti, correct? i'm asking because i'm wondering what you think the spread is going to be. that's been key to this trade. refiners have been the winning part of the sector. >> refiners will probably still do well in terms of wti's going to be much weaker because that production keeps coming on. what is saudi arabia going to do with iran? are they going to cut back or simply do what they've done and ram'll p up production? a lot of people say they don't have enough spare production but they have enough to push these prices down. >> guy adami. mpc reports next week. that's in the refining class. >> and you've got valero and tesoro coming up in a week week, and a half. tesoro closed slightly higher. i'm in the b.k. camp. i think tim would agree. i think refiners are still the place to be. gas demand has not gone down, believe it or not. and actually gas prices are rising while crude oil prices are going down. they seem to be in the perfect storm of things going in their
favor. the refiners you stay with them. >> i agree with that trade. you do stick with the refiners. one thing i found interesting and somebody on the desk pointed out to me, total sold 50% stake in a texas refining company they own. they're very smart, savvy. they sell the torngs buy at the bottom. i find it interesting they're selling one of their highest margin businesses, 50% stake to raise assets. i just thought that was interesting. >> i just want to say i would take a little bit of the other side of b.k. i think we've seen some of the worst price into oil. i think oil demand has not fallen. this stimulates demand. i think u.s. oil production first of all is sequentially now negative. it may be actually negative by the end of the year. iran's supply, let's see what these guys can actually do. i think it's probably already out there in the market. iraq is the big concern. saudi arabia said that they won't -- not necessarily not cut. they just won't cut alone. so all opec has to do is come in here and do something. if they've got someone else on board. but to play for oil going to a
disastrous end here i think it's very late in this trade right now. >> so is it time to buy enp companies degraded? >> the safest place to me would be either in the highest quality enp, anadarko, or a hess which has got a little bit more of a diversified model. i think these are companies that are 40% through the 200-day moving average. this is not where these things should be trading. i think this is, yes, an interesting longer-term opportunity for sure. >> i want to ask b.k. about some of the other commodity-related plays. i think this is an old girlfriend of tim's. decade low in vol. got crushed today after being -- >> after being down yesterday. >> copper has been absolutely destroyed this year. it probably goes lower. in copper i'm not sure i'd press shorts in that. you are seeing demand come off of that. freeport, lots of people thinking that's going to go lower. vale, brazil in itself and tim can speak to this, their economy is really deteriorating.
increasing unemployment, increasing inflation. they've got a stagflationry flf environment as well. >> selling brazil? >> no, i wouldn't be selling brazil. it's all about the currency and on freeport it's all about their license in peru -- in indonesia, excuse me. and this is why this stock is getting hammered. it's not just copper prices. copper by the way fundamentals much better than oil. >> coming up next we'll hear from youtube's ceo on why the growth story could just be starting. plus facebook could it go on an amazon-like run? we'll tell you what investors need to hear. and later ever wondered what it's likes to use the internet in space? we're taking you to the final frontier and we're asking that very question to a real live astronaut currently living on the international space station. all that and much more ahead on "fast."
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top chef.r. soccer. top chef. [whistles] soccer! top chef! [shouting] disco! [singing] say it and see it. the x1 voice remote, only from xfinity. biogen tanking more than 20% on earnings. that brings us to today's buzz kill. the biotech giant getting robbed after lowering its 2015 outlook on lower than expected growth of
its blockbuster ms drug. and this comes as biotech as a group suffered big losses this week and of course ahead of a number of key biotech earnings report next week. david seaburg, you mentioned this 20% pullback. is this your buying opportunity? >> i think it's going to set up as a very good buying opportunity. i look at biogen today, biogen scared people there's no doubt about it. you had celgene come out and scare people again. i look at some setups and a few trades and i think we're going to get to a point where you step in, you buy them. i think you get to buy amgen no, questions asked, at these levels. news came out on celgene, basically scared people in amgen and i'm telling you right now at the stock -- i think 158's where the stock went out. it's a close your eyes buy amgen level. >> to me i'm not sure -- yeah. biotech i'm not sure there ever is a close your eyes and buy. in this type environment. certainly a month ago, certainly six months agoes that's what people were doing. but for the same reason i was raise soing some cash in other s
of the portfolio i think it's a no touch here. i realize a lot of the other bellwethers are with a pullback. valuation could be justified. it's just not me here. >> one point to add, though, i think biogen although it could scare people what it could set up is who are they going to buy? they have a growth issue. they're going to have to go out and make an acquisition. they could actually start to buy some companies. that's the interesting play here. >> so could gilead. gilead's reporting next week. gilead got scared because of abby's earnings. >> last couple quarters in gilead have been ridiculously good. the price action not so good. i still like gilead, by the way, yes. biogen is really interesting. right multiple for a company even with the revenue growth slashed 8% 9% revenue growth what's the right multiple for that? maybe it is 16, 17. 300 is where we held at the end of last year. traded today on 18 times normal volume. if you've been waiting for an entry point in biogen, this probably is it. >> moving on here, google giving credit where credit is due
citing youtube as a main factor behind its blowout quarter. now youtube's ceo says this is just the beginning for the streaming video service. cnbc's julia boorstin sat down with youtube's susan wojicki. she joins us from los angeles. julia. >> youtube's ceo says she's working to grow youtube's revenue by bolstering its advertising business and she's also trying to create a whole new revenue stream of subscriptions. >> we just see a lot of opportunity continue to bring more advertisers to the platform, and so a lot of the times some of our biggers advertisers they're just get on youtube for the first time, so we're working with them to understand how they can continue to change their creative so they can work really well on youtube. how can we continue to optimize the platform? and the other thing we're doing is we talked about doing subscriptions. right now we're working on a
subscription service. so we think long-term youtube can be ad and subscription supported. >> con vincing youtube's billion users used to watching not tirely for free there is a version worth paying for an entirely new challenge for youtube and wojcicki. she did say she's interested in companies that will help her better serve creators and viewers. you can find more from our interview with her on cnbc.com. back over to you. >> julia boorstin, thanks so much. what do you do with google at this point? great earnings, huge gap higher and since then hasn't really -- >> it just ramped into earnings too. so to me google's a tough buy here. i think in terms of youtube they've got a great product there. that's going to be the growth. the stock i'd be worried about. but i also think you need to watch out for netflix here. i said it before and i will reiterate, you sell netflix at these prices because google just hired mtv's head of i think it was original programming to come over. so this again is going to be another competitor for netflix. >> let's run this out because
speaking of high flyers we've got a lot reporting next week, facebook, twitter linkedin. how are we setting up going into this trade? >> i think there was a bit of a halo effect for all these guys but we just talked about vidro ad formates and that's what you want to talk about facebook. the new way they're measuring cpc clicks and focus specifically on segments and not just likes, it's actually very, very positive for facebook. means pricing's going to get better, means these guys are going to distinguish and separate themselves from the pack. i think facebook goes higher p after this move, though, you don't need to jump in and buy it. it's a question of when do you want to time this. their earning power and monetization is getting better and better and i'm very confident of that. >> everybody knows how to say it on twitter, it's a horrible stock and i think it's going to be a disaster next week. i think twitter's going to go lower. facebook i think is -- it's already had its run after google's earnings. i don't think you're going to see a big jump but the earn rgz going to be fine. linkedin that's an important stock to watch. last quarter management had a credibility issue. they weren't telegraphing how guidance was going to be.
they took guidance down 4% and the stock got crushed. they're not going to do it again. the quarter's going to be fine and the stock's going to go to 250 bucks plus. >> i'm in the linkedin camp. it's hard to replicate linkedin. i know it's a big valuation, almost 70 times forward earnings. but if you look at the chart of the last few years a series of higher highs, higher lows effectively. facebook i'm with tim, i think it goes higher. and twitter i'll disagree with david in insomuch as $35 has been support. for the last couple weeks since all the announcements have been made it sort of traded either side of 35. i think you stay long against 35 bucks. >> all right. here's what else is coming up on "fast." ♪ ground control to major tom >> announcer: why is this man so happy? it's not because he bought amazon. it's because he's about to be interviewed on "fast money." we'll take you to space. next. and later in the hour, it's the sector that could be signaling big trouble for stocks. >> oh, my god. >> we'll tell you what it is and how you can protect yourself. that's when "fast money"
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spacecraft sent back images from the farthest reaches of the solar system. we learned about kepler 452b, nutley discovered plan thaet looks an awful lot like the earth. and we celebrated the anniversary of the moon landing which happened 46 years ago. given all the news this week we decided to talk to two men who are currently in orbit on the international space station, astronaut captain scott kelly and cosmonaut mikhail kornienko. i began by asking captain kelly about the rise of private companies in the space race. take a listen to what he said. >> i think our space program is a continuously evolving thing. and you know, whereas some of these companies like boeing and spacex that'll build these first two commercial vehicles are commercial companies, likewise rockwell that built the space shuttle was a commercial company and we're just managing it a little bit differently. and by doing this, you know, having a different level of
management and oversight, you know, hopefully we'll reduce costs for flying humans into low earth orbit, which will, you know, also hopefully allow nasa to explore further, you know, with the goal of eventually going to mars and behind. >> do you have internet in space? what's that like compared to how it operates here in the u.s.? >> well, it's kind of like a cross between old dial-up and what you might have now with very high-speed internet. it's not -- you know, it's not ideal, but -- and it varies from time to time in how well it works. but it is -- it's somewhat effective. it allows us to, you know, access web pages, your personal e-ma e-mail, things like that. >> and what kind of shows do you watch from the international space station? >> "game of thrones" and "better call saul." but both of those seasons ended.
so i'm not really watching any kind of series. we don't have a whole lot of time to do that. but we -- i would watch it when i'm exercising. i don't really watch much television otherwise except for the news, i'll have -- i actually have live news playing most of the time in a couple of the modules that we can watch it live. >> last quick question here. i don't know if you trade. do you have a question for one of our traders? >> you got a stock tip? >> well, he asked for stock tips. so captain kelly, we're going to deliver with a segment we're calling "out of this world trades." let's go around the horn and get picks from the traders here. tim. >> these guys are in the final frontier. let's le me talk about frontier markets because if i look at the markets that are not emerging but in fact they are kuwait, they are nigeria, they are argentina. these are markets trading back at three-year lows. i think there's enormous growth. i think actually -- >> that's you. >> holy cow. i don't even know what to say.
so i think frontier markets are very interesting. engagement trade. long-term trade for sure. >> seaburg. >> star bucks. starbucks. five-year growth plan is going to keep the stock growing at 15% to 20%. they've got a tremendous amount of brand loyalty. and this is a company that basically, you know, has done some great things from a new product perspective, a buyback. look at the comps today off the charts. i love starbucks. >> brian kelly. >> so we started the show talking about oil. i'm going to bring it right back to that. and out of this world the u.s. that we talk about and go to another world, you sell that short. with oil going lower russia's going to have some problems here. look at what's going on with the ruble today. looks like the ruble's breaking out or the u.s. dollar's stronger, ruble lower on this. you sell rsx. >> by the way, in case you're wondering, you can follow captain scott kelly on twitter. he tweets. beautiful pictures from space. >> very cool. >> it's very -- >> capricorn 1 one his favorite
shows. constellation brands. constellation brands. why? well, think about it. it's out of this world. also had a great quarter on july 1st. 20 times forward earnings. one of tim's favorites. the stock just continues to go higher. growth by acquisition. stars will get you done. >> you make for one scary astronaut. >> you look fierce through that little dome. >> that does it for us here on "fast." thanks for watching. see you back here on monday at 5:00 for more "fast money." meantime, don't go anywhere. "options action" starts right after this break.
well, hey there. we are live at the nasdaq marketsite. and guess who decided to join us -- carter and dan. they're back. welcome back. while we are getting ready, let's take a look at what's coming up. >> honestly week, out of gas. >> that's what some traders are saying about the market. and we'll tell you the sector that's signaling major problems for stocks. plus -- that pretty much sums up biotech today. and you know what? it could be why the nasdaq's not getting any respect. and what do these three men have in common? >> those people have never been in my kitchen. >> not quite, cliff. they all made a boatload on google and they have a way to ke