Trading month post split check out this sky high etf chart. You think you know what this etf is let us know. We have a lot to get to with news breaking on at t. Lets get to Julia Boorstin with more. Thats right, brian, those shares up about 2. 5 in after hours trading on a report that at t is again exploring a sale of its directv business this according to the wall street journal who site sources saying at t and advisors have been talking to Apollo Global and Platinum Equity as potential bidders. At t has explored selling directv. The ceo has discussed the importance of divesting noncore assets directv has struggled with cord cutting amid the growth of streaming options. The wall street journal is saying a deal could value directv below 20 billion. Thats less than half the 49 million at t paid for directv back in 2015 at t tells us it has no comment on this report we are reaching out to apollo and Platinum Equity and have not heard back yet steve grasso, so your take not only on the news, but i want to get your take here. When i saw this headline, i immediately fired off an email to the producers i said really, the Randall Stevenson era at at t is wracked by deals that apparently ran up debt now youre selling directv at less than half what you paid for it comment on the deal and comment on the company and the former management team. Yeah. Youve got to look back to the era that youre talking about. So you had the two majors. You have verizon, you have at t. Then you had john ledger who turned the whole industry on its head am i right there so they were forced to compete they were forced to try to gobble up, create value where they thought they could. They were trying to chase where the puck was going to be, not where the puck was so i dont fault them for doing that, because if those deals turned into something, you would have posed that question to me, hey steve, all these deals turned out great so its always six, half dozen of the other in this one its hindsights 2020 yes, you are correct so it didnt so now youre looking at at t that has basically been flat lining at around 30 you catch a yield of just below 7 now theyre trying to figure out what do we do now to be competitive in the next five years. So to your point, you have to sort of reestablish yourself, because now you have tmobile. Tmobile is up almost 50 because of their merger with sprint so theyre a viable competitor now. Its either tmobile, verizon or at t so at t is taking it on the chin, down 23 year to date. Verizon down 3 . Tmobile up 50 . Wheres the next 50 going to be made since this story has been around for over a year now, maybe we get some conclusion to it and maybe you could finally get a pop in the stock. All im saying is this and im not slamming the former management but i am slamming the former management, because five years ago at t was a 43 stock its a 32 stock today verizon, at least you can say the stock is fractionally higher than it was five years ago it hasnt lost 40 of its value even as the dow and s p go on record runs. Is there any reason, bk, to own at t stock its a couple hundred billion in debt. Yeah. So thats really the issue why is it up 2 or 3 if they can get 20 billion odd dollars about this, maybe its cash on the books. Youre concerned whether theyre going to be able to pay that 7 yield. Thats the thing thats what investors are looking at is, how sustainable is that dividend they know theyve got a problem with directv theyre going to lose 39 billion on this. I dont know what the management got paid in total over the last five years, but i guarantee you i could lose 39 billion for about half of what they did it for. Its 196 billion in debt for at t according to capital iq the management made a bundle i believe whoever is retired is making a bundle in retirement. Thats the boards decision and thats fine. Whatever was approved is approved all im saying is the stock has done nothing except lose investors money over the last five years now theyre looking at selling this this was their whole strategy was directv and the bundle and now theyre like, oh, lets sell it for half what we paid for it. I dont know this is necessarily the powerful catalyst youre going to need to move the stock higher. Just go to the charlotts its been trading at that 50day moving average it has shown some support there. But you have room to catch up. Youre talking about a forward multiple at about nine times if youre looking forward and not looking at the past mistakes and you can be a patient investor, you buy it on valuation and you hang on. Lets move on now to what was another monster week on the street of dreams not only did the dow rise 3 , but it is now positive on the year, yes, just by 0. 4 but, hey, its podsitive even old energy coming along for the ride the strength as the fed wrapping up an historic Virtual Meeting we just spoke with st. Louis fed president jim bullard. Here is part of that conversation were not thinking about raising rates. I think we have a good policy in place right now. Id just continue this policy. I dont really think this is about Monetary Policy. This is about the virus and the economy adapting to the virus, the Risk Management around the virus and the contagion that would otherwise occur. I think our Monetary Policy is just right for this situation. All right so bonawyn, with rates clearly lower for longer, maybe forever or at least our definition of forever, are there more gains ahead for the stock market overall . I think there are if you break it down sector by sector, weve spoken in quite a bit of detail on several mediums, right, about how narrow this tech rally really has been. It was tech, then it kind of went to the housing sector, rate specific, rate leverage type of sectors. Now not only are we seeing low rates, were also seeing more of a steepening of that yield curve. So we might see that transition into the financials. If you take a look at the vix and you watch that today oscillate 16 between 22. 5 and 26. 5, clearly investors are continuing to buy, but with a bit more caution youve got to be putting some protection in place here yes, the fed wit accommodative policy, i think youre starting to see more people say, listen, we might be on the precipice here. Youre seeing the volatility and the market rally in tandem i think you always need to scratch your head when that happens. Maybe this elixir of low rates might wear off if low rates were always just undeniably good with no illeffects, we should just peg the Interest Rate at 1 for the rest of our lives and move on, but low rates often do come with a negative, as set bubbles, likely inflation, et cetera. Is there a point at which these low rates will simply not benefit stock investors any longer yeah, but weve all seen this happen and weve all seen this sort of play out to the opposite of what youre saying. But i do agree with bonawyn. We were talking about this last night on air as well ive been positive in the stock market i thought with powell and the hopes for a vaccine, the market could rally aggressively higher. Its done that but now when were looking, taking a step back, i think a big part of this rally, this last push has been apple and tesla and people tripping over themselves to get involved in the next hottest thing and it hasnt done anything at all for shareholder value. Its just pretty sexy when youre going to get a split, so you want to be a part of these iconic names if youre part of those names and youre coming to the conclusion this might be a great time to everything bonawyn said to everything everyone thinks. Now youre going to get apple and tesla with a split adjusted price. You might get a window of opportunity right before the president ial debates to really capture some volatility. I think we could potentially see the market sell off 1520 now how long does it last . Because it really hasnt lasted long but i think at this point the rush into big tech, the rush into the six names, probably very, very long in the tooth. You know, bk, ive screwed up i come on here periodically and i say why should the market keep going up i realize its probably been the wrong question maybe the better question is why should the market go down . Everything weve talked about seems to put tailwinds flip it. If you had to make a case why the market will fall, im not saying it will, but if you had to make a case why it would, what would be top of the chart dont beat yourself up. Youre an incredible slouch and nobodys going to deny that. Thats a joke from caddy shack for the folks at home. Be the ball, bk exactly the case for volatility coming forward at least from my perspective is, i dont think this debate and election season is going to be your garden variety election season. With the social unrest that were seeing in our country, i think you have to expect that theres going to be more unrest and more issues coming out over the next 30, 60, 90 days leading into the election. I think as an investor, when you have that uncertainty and you think about how stocks react, they react to new information and they dont like uncertainty. Im long vix calls because i think as we go into it, youre going to have this uptick in volatility. Jeff mills, do you expect heightened volatility in the next 2 1 2 months . I think all bets are off over the next 2 1 2 months. What you do have is a very narrow market that doesnt look like it typically would off a recession. Its the fed and excess liquidity plus uncertainty what you have right now is only 45 of stocks in the s p are positive year to date. Thats half of what we saw out of the financial crisis. The median stock is still down 22 off its alltime high. You continue to see Money Managers and other investors pushed into the market, but theyre pushed into this narrow area of the market because theyre afraid if you look at 2021 earnings, pretty positive, but the deviation is as wide as its been since the 1980s i think the background continues to look like it does, that means cyclicals lagging and everybody partial to large cap growth. I think that could continue. A trend has been your friend and jeff saying its going to continue. Coming up after the break here on fast money, is it time to fold . What happens when 2 Million People switch to Xfinity Mobile . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with Xfinity Mobile. Call, click or visit a store today. Everyones loving my tie game welcome back to fast money. You might want to sit this next hand out Morgan Stanley making a big call on two gaming stocks, downgrading Penn National and draft kings to equal weight. Both stocks have more than doubled since the beginning of the year and investors expectations may simply be too high jeff mills, what do you make of the call ive liked both of these stocks for a while penn was a final trade of mine if you look at the draftkings chart, it traded into this narrow wedge, both to up the side its maintained that up trend. I think the fundamentals are still in place in a longterm story. These are powerful brands. I think you have a spending redirect going on with people not attending sporting events, so theyre betting on them in stead. I think the legislative story is really the big one, thinking about california, texas, florida, new york having not legalized Online Sports betting yes. I think that comes and thats a major catalyst it talked about revenues going from 1. 5 billion in the industry to over 12 in five years i think it was a pump the brea e evaluation story i think you could see some volatility, but if youre a longterm holder of these names, i think you want exposure to the industry and these are two great places to get it. Its a down dprgrade to an e weight would you be buying either of these stocks into the weakness that came out today because of that to the point that was made previously, its really about your time horizon. Over the longterm, particularly draftkings, i like it. Ive been looking for ways to dip my toes in i like the fundamental story, particularly being that theyre a capital light business thats getting exposure i do want to point out that we do need to be careful here, take a pause. Weve all talked about how there might be some downside to current levels in the market if you look at whats propelled these names forward, its been the stayathome dynamic i think its more of a pull forward of demand rather than an expansion. Over the longterm i like draftkings more than penn. Capital light business with different exposures to online betting and gaming theres definitely some headwinds around the coronavirus. My time horizon would definitely be 12 months plus. Grasso . Really quick, i would stick with draftkings. But to everyones point, i think theres nothing wrong with locking in some profits here if the market does dip, these are going to get hit as well even when people get back into opening up casinos, online game bli gambling is not going away. Theres a hedge or a put that the nfl season could be cancelled. That would obviously be terrible for many reasons but also for draftkings thats part of the thesis. 100 . We all know what the thesis is, but with abbott labs, with getting the news out that abbott labs has this other testing that we heard yesterday that rallied the market and a lot of other Different Industries i think youre just placing a bet. Theres nothing wrong with taking a profit. See where the smoke clears, but ultimately on the dip, if there is one if the nfl season is cancelled, id still be a buyer of draftkings. Theyve established they are the name and they are the brand. Coming up, we are counting down to an entirely new era for apple and tesla. Should you expect from these stocks more ingas because of the split only or are there fundamental reasons . Gold bond champion your skin come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Welcome back to fast money. Today was a special day, not just because its friday we have the weekend ahead of us. But it was also the last day before apple and tesla split their stocks, apple going four for one, tesla five for one. Last two times apple has done a stock split, its seen big gains down the line. Bk, will history repeat itself studies have shown stocks tend to gain 58 from a split alone. Yeah, which is insane as everybody has said on this panel, there is no value added to the company because you split your stock but if you want to buy it and that seems to work, as soon as a stock gets to 90, usually 100 is the next stop these kind of anomalies exist in markets. I wouldnt bet the farm on this. It wouldnt surprise me if once these things split, people wake up and say let me buy some more. Its not going to change the valuation of the story for the company, but hey, stock price might go up. Grasso . I think you have the ability were really on the precipice or the cusp of seeing some rotation out of tech and into value i think once apple started with the split conversation and then tesla piggybacked it, it really put all those plans of a rotation on hold i think what youre going to see now is this maybe wont be what history has shown us, brian, and maybe you get an opportunity to watch value and kicyclicals sta to perform on the cusp of what we could see another rotation on the back of what powell had to say yesterday as well. Now it is time for final trades already bonawyn Bonawyn Eison what is your trade . Goldman sachs trading about 60 basis pointed priced to book. Nice 6 pullback on dl horton i would be a buyer there the valuation is still good. Id be buying dhi. Bk . Im actually concerned that the yield curve has steepened but the financials havent really caught fire yet so im a seller of xlf steve grasso, maybe your pick was shake shack on the final trade . That was. On the back of yesterdays abbott news with that rapid test, all of these quick serve restaurants caught a bid finally shake shack going much higher there we go everybodys going to pretty much fast food. Its unfortunately all thats open in much of the country. That does it for fast money. Options action is next coming up, gym may be out, but Summer School is in session. Frank holland, whats on the syllabus tonight were going to talk investing. Courtney gibson sharing some investing ideas. We also have two Financial Advisors with some interesting takes on how you should invest your money during the pandemic. Good stuff. I understand youre also going to be taking some viewer questions. Give us a tease of what people may be asking you guys. Everybodys asking about travel and leisure stocks. With airlines rising in the last week, is this the time to get in before a big rally thats one of the questions before our pelan. I like your teacher didnt make you wear a tie to class tonight. I like casual friday it is time for options action. Heres whats coming up on the show banking on a breakout the financials were on fire this week
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