Transcripts For CNBC Fast 20240704

Expecting from that Earnings Report out tomorrow. Im melissa lee, this is fast money. On the desk tonight, tim seymour, bono win, dan nathan and chrisser is roan we start off with the wild ride on wall street today the dow is down 466 points at its low but finished 160 points up the s p 500 shedding half a percent. The vix mirroring the markets move, hitting 18 for the First Time Since may before pulling back some, still higher, closing above the 16 mark. But one sector stayed under pressure all day, than would be software stocks. The igv closing below its 50day moving average for the first time in more than three months one big drag on the group, data dog, the Cloud Computing company slashing guidance, seeing shares drop 20 thats its worst day since the start of the pandemic. So, did the news pull a pal over the whole a. I. Trade add that into your action, dan that was trouble its less about a. I. And more about a rising tide lifting all boats. When you think of the consumption space cloud models, all of them have traded very expensively all year long. The a. I. And the promise of a. I. And these tools being deployed across lots of systems, Companies Like data dog have obviously benefitted from that ill just tell you, if you look at the quarter they reported and the guidance they gave and you say to me, the stocks down 17 , i would say, i dont get that, okay, heres a company that is expected to grow 20 a year for the next few years they are profitable on adjusted basis. High 70s gross margins, if you will i dont get that and this might be the reason you want to extrapolate it out a little bit to the Broader Software sector and really focus on valuations. When you think back to late 2021, when the fed said they were going to raise Interest Rates and do it to battle inflation, the first things that got hit were really high prilce Software Names and a host of other tech stocks. So, maybe this higher for longer is starting to sink in a little bit. And if you think the megacap names, a microsoft thats down 10 from its highs, just last month, because some of the frost is coming out a little bit of the excitement about a. I they werent able to guide to a point where people said, this deserves a 32 multiple, maybe its working its way across the tech sector and it does make sense it starts in software. Chris yeah, i think one of the ironies here is the rotation out of the software and out of the techs began with the very benign 3 cpi print back in early july. Basically, since then, youve gotten the exact opposite market response than one would expect even look at the tape today. What actually led today was energy the price out of crude today was fantastic. They opened down 3 , they closed it up. The xle closed at a new high today. Relative strength coming from that group for the last three, four weeks under the surface, theres been subtle leadership changes. Energy has dominated both discretionary and tech since that july 12th cpi print very Important Message there yeah. Tim . Well, i think the market is paying attention to valuation. And so, theres right, those data dog numbers, the bar was set high, the expectations had been built up what they were seeing in other cloud, and ultimately i think they beat revenues by 2 and the problem is that do you pay 11 times 24 sales for this company and thats what the market has to digest. Chris is talking about things like energy, Energy Sector earnings were down 40 , but that was off a ridiculous base of last year, and the fact of the matter is, Energy Companies are paying down debt, paying back capital, and have never looked better balance sheetwise, and they are attractive. And so, industrials are attractive this is that broadening of the market so, its less about, you know, a. I. Gone, you know, parabolic than i think its finally a recognition that people think, okay, the economys slowing, the job market has seen its peak, there are going to be pressures, but maybe this is not this is certainly not 2008, it may not be, you know, 1990, pick your recession. And not that right and then therefore these companies are all attractive thats what im taking out of this the reaction to todays market and where it closed relative to where it started, even for banks, i know were going to spend a lot of time on banks, i thought the market traded great today. I was doing, like, where the s p was, down 3 from the recent highs, and where it had moved, that was the biggest move down after peak on the s p since svb, so, in other words, it doesnt take a lot for people to feel squirmish here, and i thought the market traded pretty well. You are in some of the higher multiple names are you starting to rethink . It seems like thats what the market is doing at this point, for a lot of reasons, not just data dog, but it underscores the notion that weve got higher rates, higher for longer, uncertainty about the economy, weve got a little bit of bubblish action going on in a. I. Related, a. I. Adjacent names. Youre in nvidia, tesla yeah, its name specific, right . Drilling down on data dog, i think this somewhat flies into the face of what we saw from amazon and aws if you looked at the numbers, theres a large difference between their numbers an that quarter. But the thing trades at, what, 80 times forward any time you have any type of pullback, any type of diedown, those are the names that are going to get punished. Do i still think you can be owning more expensive pockets . Yes, if the sales growth is there. And the cash burn is kind of reeled in. But you have to understand you are going to need to pivot, which is why i say, those names when you double or triple, you have to take some money off the table. You should expect to have heightened volatility, particularly when you have questions about the economy. One change is pretty unique, as we are 90 through the earnings cycle, we didnt hear a lot about guidedowns. We didnt hear a lot of second half guidedowns so, thats something that, you know, if you had your antennas up, listening to the calls, we didnt hear that a lot at the later stage of the earnings cycle, it is interesting that the headline is they guided down this is data dog last night, we talked about it, tim, we talked about semis if you put this together, what taiwan semi said to us, what Texas Instruments said, what qualcomm said, so, were talking about what taiwan semi said is really important. All of the demand for a. I. Is not going to outweigh the weakness that were seeing in other end markets. And it was confirmed by qualcomm in handsets. It was confirmed by texas in auto give. August 23 rrd, were going to ha from nvidia and snowflake. Look at that chart thats taiwan semi sorry to step on your toes, but this is an interesting one that stock traded today right to that uptrends been in place, and, you know, guy, if he was sitting in your seat right now, would have said, one of the five most Important Companies in the world. They told you theres weak demand right now that chart, if it bounces here, we might be in the allclear a little bit if it breaks down, the semis are going to go with it. I think when you look at the semis, dan, you are spoton here, theres really stretchry everywhere, for as good as nvidia or avago have been, you are basically back to the 200day on texas, on qualcomm, youre through it. Tsm has maybe broken down here, so, this has not been a straight shot i think its a reminder that two things can be true at the same time that these can be Great Companies that the longterm uptrends may still be in place, but also, stocks correct. And a lot of these have been a straight shot all year and its very reasonable, we have seasonality no longer at our back, you expect some consolidation into this time of year well, we had it the semis, if you look at the stocks relative to the s p, ive said this a lot, many times, but i was looking at it again this morning. Support for the relative, so, do the rash yoel of the s p against the smh, spy, divided by sph its been testing it for awhile, so, i dont think it derails i also think that some of the other dynamics out there, exports out of taiwan, we got a lot of data out of asia last night, and taiwan exports were down and certainly, theres less demand from the rest of the world right now. So, yeah you i kind of agree, i mean, i dont i think semiconductors are going to continue to be a high growth, exciting part of the market to invest in. I think theyve had a ridiculously strong run, and taiwan semi last quarter did their best to kind of derisk the rest of 23, but we really dont know about 24 so, put this all together if were seeing softness in software, softness in semis, as they have pointed out, but good price action in energy, we still see, you know, the broadening out of the market, overall, are you constructive here . Well, i think its always constructive when you see broadening out of leadership and you want to see that you see the rollover in big cap tech yes, but i mean and the softness in these sectors. But it could be much, much worse, right so, we talked about semis, i think the more economically sensitive pockets of semis, perhaps seeing the numbers out of china today will give you some concern, but the pockets that still, that are most expensive, because of this, the pockets that still areseeing Revenue Growth and Profit Growth are still going to be leadership, i believe. To the point about energy, you know, i really think as rates have risen, we have kind of thrown out that dividend yield and debt paydown, and that may just start to be more of the focus in the forefront now, especially as people are expecting to say, yes, higher for longer, but perhaps weve reached that terminal rate can i say one thing yeah. August 23rd, if nvidia cant guide up meaningfully, karen said this, its lights out for the semis. And thats it. I agree no, no, i oh, your show, actually every time we say data dog, i think devil dog and it was a terrible it was a terrible dessert. Now you are rethinking letting him saying something yeah. Lets move on. Deep dive now into the technicals for the software space. Did we see any real damage being done today well, i think when you look at, lets start with the story of the day, data dog, its a reminder that there is stretchry even when you have good numbers. And think when you go back and you look at kind of prior instances of coming off lows, remember, the first year off the 2002 low, tech worked for a year and then they went dead for the next number of years a lot of these names have worked, as we know, very well for the last year. I guess the best thing you can say about data dog right now, its oversold. You can probably get a bounce. I would expect it to be tepid. I think its going to fail on any rally. Microsoft, as we all know, has been below the 50day now for the better parat of the last month. As dan says, i think the big story Going Forward is, what happens to nvidia on numbers if you lose nvidia below the 50day, right now, weve seen apple below the 50day, microsoft. If you lose nvidia under the 50day, i just reinforces the story, this is becoming more of a value market and less of a growth one avago, similar story its been quietly consolidating for the better part of the last two months since that big volume explosion on the may nvidia quarter. Below the 50day, i think very, very vulnerable there. And the big picture is the igv why do you want to own these stocks breaking down when i have value names start to break out schlumberger made a new high today. Why am i going to play in a space thats run all year and technically vulnerable when i have names that have been on the sidelines now starting to perk up this market is splitting i lean more towards the value side of the equation stretchry great word. And really gets the fear factor to the front i think if i look at where the top seven, the magnificent seven, sorry, guy, wherever you are, you have a case where were never going to see that in the s p again. Its not going to happen overnight, but i still i love this its why i said it last year, i said it, you know, i should probably keep saying it, i will say it again energy at 4. 2 of a waiting in the s p, i dont think so. I think its going higher, and i think youre going to start to see things change. I think investing in tech as a sector from a secular perspective, you had only a few places to go globally. This was really the place to go. And i think there was global interest in a lot of these stocks for that reason Many Companies are Tech Companies at this point. And Companies Like google are really more, you know, we talk about apples probably a Consumer Products company. What are the other of the seven that look vulnerable to you, chris when you go name by name, obviously apple. Amazon and google still generally trade okay lets watch its given back a fair amount of the earnings from last week, lets keep our eye on that but for me, its microsoft, its apple, its nvidia, where the weakness is evident. And i would ask the question, can the s p itself stay above the 50day, when youve already lost two, if not three of the larger ways. Can it . I would argue probably not. And okay. I dont think thats some calamity weve had an uncorrected move basically since svb. I think its very reasonable that the s p and the 200day meet in the middle but tim, you bring up a good point, energy up 4 of the s p the 70year mean of energies weight in the s p is 11. Sail thats wrong by half, lets say we go to eight thats still a big move from where we are right now i think theres upside there al fa aal fa belt is easily e bestlooking of the hateful eight. Remember from citi, he came on the biggest seven, or the i dont like any characterization of stocks, should remain knew tram. Oh, okay. Not so magnificent anymore. Fair enough i think alphabet is the bestlooking chart say the market were to two to some of the levels were talking about, we lost apple, microsoft, they broke the really welldefine 45degree uptrends that have been in place all year, google came back 10 , it comes right back to where it was when it broke out and comes back to a base. And technically, it looks good and valuationwise, it looks good i think there are names you want to pick at guy was talking about that 176 level in apple you said if it got down to 160, you have a stock, i think they announced a billion subscribers to their subscription, so, you want to our apple. Youre trading apple here we did this forever, it was, im an investor, a trader in apple youre a trader in apple right here and i think, though, for this first test, for whatever wherever we are, and its going to happen, may not be on this run, but when these big market cap names, were not labeling them anything done with that. They are going to challenge the entire market, to be clear because theres been too much investing in it, too much sentiment attached to them you cant have those companies, which are 27 of the s p, break 50day for the first time in nine months and not even pull down sentiment in the Broader Market i think you have to be careful, but i think its an opportunity. Yeah, thats kind of my point. If you are starting to see the erosion in those names, seven, eight no characterization were scared now. Playing by the rules here why would you then start to deploy new money, even in a cheaper pocket of the market when you are expecting overall multiples to come in for me, i just think it sets up for you to be a bit more passive, particularly given that risk gives you so much yield at this particular point in time. Coming up, two big names driving the afterhours action. Lyft and rivian reporting results. Details next. Plus, weight loss, stock gain shares of eli lilly and novo nordisk jumping. Lde they worth their weight in go dont go anywhere. Fast money is back in two. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . please dont go by harry casey, Richard Raymond finch please dont go please dont go please dont go please dont go dont gooo dont go away preorder now and get a free storage upgrade. please dont go welcome back to fast money. Weve got a couple of afterhours movers lets start off with rivian. Shares struggling. The ev maker upping its 2023 production target. The Conference Call is under way right now. Phil lebeau has been listening in phil, whats the latest melissa, they are just beginning the q a portion. Ill be curious to see how many questions are in here that might give us some insight into why the stock is selling off it was up 80 in the last three months, so, im not surprised there might be a bit of a pullback here when you look at the q2 results and the guidance, its pretty hard to find anything to complain about, if you are a rivian investor. Smaller than expected loss of 1. 08 a share. The sheet was expecting 1. 41. They also had revenue beating better than expected, coming in at 1. 12, compared to just over a billion. And heres the guidance. The guidance is what people thought would move the stock higher they now expect to build at least 52,000 vehicles instead of 50,000 this year the adjusted loss for the full year expected to come in at 4. 2 billion, previously, they expected to lose 4. 3 billion, and cap x, because this has been pushed out to 20 24, they will spend less, 1. 7 billion, compared to 2 billion previous guidance the question is, okay, what about their business they produced more suvs as opposed to the electric pickup in the second quarter. They have greater production of their enduro motors, theyve moved that inhouse, which has been a big striver of the improved performance and the question becomes whats happening with the electric delivery van that they build and sell to amazon, which is also a shareholder within rivian. They have 800, or, those vehicles are in 800 cities now, so youre seeing the rampup in production that r. J. Has been talking about for some time, and he talked about maybe about a month ago about how he feels better about where the supply chain is lofts lots to discuss with him tomorrow morning on kwxsquawk box, 8 30 tomorrow morning. Well talk about q2, and talk about where they are for q3, and as they head, now, towards production of the smaller r2 model build in a new plant in georgia which is under construction at lot of other headlines that are seemingly great 35 reduction in materials cost, theyve got a ton of cash on the balance sheet. I mean you said it, phil, theres not a lot to not like in this report at this point. Yeah, and thats why ill be interested during the q a, if we see anything that comes out. The inventory numbers, you might be able to quibble about that. They say its because they are ramping up production. But other than that, melissa, this is a case where they set the bar, they exceeded expectations, and they are raising their expectations for the full year. But when you have a stock thats almost doubled in the last three months, you can understand why some people might say, okay, lets take a pause here. Yep phil, thank you. Keep us posted phil lebeau. What do you make of this you just made a point the cash they have a little more than 11 billion, if you look at their expected losses over the next few years, that kind of taps it right now. They dont have a ton of debt for a company thats losing money right now. You think about that investor, that amazon, and they have orders, flight what was it, 100,000 vans, thats what we heard a couple years ago, a year ago when they went public. So, if you are tesla, you probably have, like, prefer a competitor like rivian than you would maybe, like, detroit, if you will, and so, i think theres a lot of, like, interest in keeping these things alive. Dont forget that tesla lost money for many, many years as they were ramping up, so these are goodlooking cars, too i think this one is okay we talk about lucid last night, i mean, they have a real competitor on the high end to the germans, when you think about the cars theyre making and teslas model s, too, so, i think youre going to see rivian and lucid pull through this difficult period i think after a move from 10 to 25, if the worse youd get is 2 or 3 of profit taking, you view that as a win and something happened today on the rivian chart that hasnt happened in the history of its life oh, here we go. Tell us the 50day broke above the 2 200day. Oh. Golden cross. First time weve had a trend change in rivian since it became a Public Company i think at a minimum, putting aside the leanings you may have on the space or the name, youd say, okay, lets be open to the idea this has turned all right, lets get to lyft now. Hiking revenue guidance for the current quarter. L leslie picker has the details. A sizable bottom line beat for lyft, reporting 16 cents of earnings per share on an adjusted basis, where the street was expecting a loss of 1 cent that sent the stock skyrocketing as much as 13 in afterhours trading, but it has since come down on a q4 Revenue Growth outlook that was a bit lower than analysts were expecting the Conference Call near completion here, but kicked off with questions for the companys relatively new ceo on his Strategic Vision he gave a sense as to how they feels about volumes versus profitability. First, do the right thing, and then do things right so, the right thing is for us to offer an option in our app that allows our riders to save money when they want to, and everybody likes a deal and then, over time, were optimizing the profitability of that now, any portfolio is going to have some lower margins, some higher margin products i expect this to be a lower margin product forever our producer laura bachelor spoke with irrisher who said market share is 32 quarter over quarter. Market share an important piece of this industry, melissa. Leslie, thank you got to go to tim, the l in his lags trade is, in fact, lyft, it has lagged the s p 500 year to date it has. So, going into this announcement after the bell, the stock was flat on the year what its done in terms of the price action after the bell is so emblematic of what the stocks done all year. It was up 14 , its down 5 , but this is a stock that went up almost 80 to start the year, had a move down of 35 , rallied 45 into these numbers its about the competitive landscape, and where ride share demand is proving to be both resilient, normalizing and something that actually is very good news, the dynamics with their drivers, supply of drivers, i think the Regulatory Environment is not bad this is about profitability and when theres two players, you know, i think theres still plenty of room for lyft. And thats the problem in this number yeah, exactly theres enough room for both players here clearly lyft is more of the pure play versus uber having diversified revenue streams. So, you are in a situation where you are competing on price ill say, the afterhours trading did surprise me a little bit, given the Short Interest in the name, i would have thought a move of 13 , 14 might have led to some Short Covering and perhaps a squeeze there, so, im scratching my head on that one. All right, theres a lot more fast money to come. Heres whats coming up next. Check the scale. The weight loss drug surge sending some pharma stocks to alltime highs but is it too late to beef up your fportfolio with the group plus, regional banks taking it on the chin after a ratings cut. But the move has our next guest scratching his head. What he sees next for the group. Youre watching fast money, live from the Nasdaq Market site in times square. Were back right afterhi ts. E t, power e trade makes complex trading easier. React to fastmoving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you wont miss an opportunity. E trade from morgan stanley. The first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com welcome back to fast money. Pharma stocks, eli lilly and novo nordisk topping the tape on the back of strong earnings from lilly. Beating on the top and bottom lines before the bell and raising fullyear guidance on the back of strong sales of mounjaro trials showed wegovy lowered the risk of major cardiovascular events of 20 . Both stocks closing at alltime highs. We were just talking to jared yesterday, and he said 18 would be great 20 was really knocking it out of the park here, tim. Yeah, and i think you have an opportunity for analysts to upgrade the stock, given the obesity study. And the Addressable Market, the ability to gauge how much of this is kind of oneoff dynamics, how perpetual and residual the fall on might be. Its really what youre willing to pay for it. This is the nvidia pharma. What do you do here . These numbers were as maybe not quite nvidialike, but i tell you what, they were extraordinary when the bar was very, very high. I have trouble with the valuation. I think this is coming back to earth. Its the nvidia pharma, except this time, nvidia is out with a chip that people will get paid to accept right the importance of this study is that health care will now pay for this drug, because it actually reduces, you know, cardiovascular events. So, thats a gamechanger in terms of total Addressable Market think about it. A year ago, we were talking about the prospects of this alzheimers drug and the stocks rallied 80 . Its a half a trillion dollar market cap and i think i just heard that last year, money jaur roe was 16 million in sales, this year, its going to be a billion and some of the estimates jared was saying is maybe 100 billion drug. I dont know how you get comfortable, you look at novo and you look at this and they have a combined trillion dollar market cap, i think the valuations are getting a bit stretched. You had times to buy both of these stocks this year i dont think you chase them like this. You were actually tim mentioned nvidia of health care, you mentioned, its sort of felt a. I. Bubbly. A market like this, where theres uncertainty and valuation trepidation, you want to look into multiyear themes. Thats whats going on i think its a good comparison in a way, but look, listen, weve seen this in technology, we saw nvidia sell off 75 from its highs in 2021, because all of the themes that they were playing really well up until that point, they all fell by the wayside. Theres no slam dunks here its so tempting to want to fade a move like this, but when you look at the chart, about times in the last five years, lillys tested the 200day every single time, its rallied from it. We were there several months ago, we rallied hard off it. I think you stick with the longer term trend here. And speaking of lilly, jim cramer is chatting with their ceo tonight. Catch the full interview at the top of the hour on mad money. After the break, cutting up credit moodys flashing Credit Ratings in a number of regional banks, but are they too late to the party . Gerard cassidy breaks down what has him scratching his head about the call more on the financial fall when fast money returns what do you see on the horizon . Uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. Welcome back to fast money. Stocks ending the day well off their lows, but still, the s p shedding half a percent. The dow down 466 points at the lows, closing with a loss at 160. And the nasdaq down nearly 0. 8 . U. P. S. Cut revenue and margin forcast forecast for the year. And emerging market stocks, particularly those in china, taking a hit overnight imports and exports fell more than expected in july. Look at shares of we work. Yes, its still publicly traded. The stock plunging after the company filed a statement saying substantial doubt exists about its act to continue as a going concern. Thats never good. Down 17. 5 closed the day 21 cents a share, with market cap of less than 450 million all right, moving onto regional banks dropping in todays session, throe the kre closed well off the lows of the day. Moodys cut its ratings for ten lenders and put six more on downgrade watch. The firm krifting ongoing concerned with the sectors credit strength as higher Interest Rates put pressure on the group. But our next Group Questions the relevance of the rating cuts gerard kcassidy, great to speak with you so, if clients are calling you today and saying, you know, this moodys thing is offbase, its late to the game, et cetera, which banks are you saying you should buy at this point, based on the selloff i think, melissa, what we have to look at is, you know, the track record of these companies through a full cycle and were certainly going to see banks have higher credit losses and credit issues normalize. We all know that the credit picture for the banks was amazingly strong coming out of the pandemic, and the numbers were unsustainably low in terms of credit losses and they are starting to normalize now, but we think that are manageable as a result, when you see a selloff today based upon the moodys news, which, im not saying its wrong, the timing seems very odd, its kind of late to the game, as you pointed out, or you mentioned, and i would say that if we really are going to see the fed reach its terminal rate for fed funds, lets say in september, and there is no hard land ing in the economy next year, then the banks are in really good shape so, banks like m t, one of the names downgraded today, has a proven track report of being one of the best managers through a credit cycle, and that would be certainly a name to look to to own. Another regional that was put on watch was u. S. Bank corp another proven bank that through the cycles really has proven they can manage through these credit cycles. So, i think its kind of late to the game i liked that expression you used the framework of your recommendations, gerard, are you forecasting a recession, a soft landing recession in 2024 . Because thats the moodys scenario are you saying no recession at this point yeah, from the start of the year, we have always been in the camp that the economy was slowing down to a mild recession, and were still in that camp. Even though the cross cards today are incredible you look at some of the hard data, like the leading economic indicators, you look at the inverted yield curve, and you have to say to yourself, you know, we should be in a recession. But then you see the real gdp numbers we just produced, and we are also the growth that the economy had. The employment picture is still very strong. So, were taking the view that it its, do we technically go into a recession for two consecutive quarters, slight negative growth, thats possible. And again, as the credit normalizes, the banks will be able manage through that gerard, thank you so much for sharing your thoughts with us. Quick question, do you have any idea what might have been the catalyst for the timing of this release . You mentioned that that was a bit awkward. Do you think it had anything to do with with the u. S. Sovereign debt downgrades or am i off the mark here . Yeah, no, you know, you bring up the real point, you know, why now, you know, right after the Silicon Valley debacle in march, they put a bunch of market of b watch, but i dont criticize, you know, the rating agencies, its a tough job they have, but you know, they really are trying to get out in front of this, so, ideally, you know, this type of action should have been taken last november or december. And because we all thought, and the economy possibly could slow down, so, i dont really think it had much to do with what went on with the u. S. Government debt issue, but that is, as we go forward, we all know that is going to be an increasing issue for this economy gerard, we have to leave it there. Thank you so much for your time. Gerard cassidy of rbc. Dont want to criticize the rating agencies but i am. Late to the game. Good for him. Why not . But yes here we are. So, tim, what did you make of this action . Thought the action was interesting. This is on a day when italy announced a 40 windfall tax on their banks and destroyed european banks, too, for obvious reasons, they finally have profitability from higher Interest Rates take an m t, this is a company that just announced. They reaffirmed their guidance for 23, they talked about a guidance sheet, 208 in assets, well above the 100 billion threshold. Some of the biggest issues for valuations of stocks and multiples they trade it at and the followthrough from investors, yes, theres going to be a pause in buybacks. Theres going to elements of what was very exciting for Bank Investors over two years and i know banks underperformed a bit this year, but for the most part, banks were investable in a different way than theyd be in a decade and this has set them back but i think this is an opportunity, again, at least in the world that we have right now, where were not forecasting massive recession. Tim mentioned mtb, look at u. S. Bank. The stock traded absolutely great. Had a 4 reversal on the high side on the name and weve been writing in our work the last couple weeks, the regionals have responded very differently to rates up over the last month than they did back in february and march and i think theres one or two things going on, when rates were rising earlier this year, the curve was still flattening the curves actually steepened so, the banks are starting to respond to the realities of the steeper curve. I would also argue, when you look at what happened in march, perhaps the banks are saying, listen, no matter how bad it gets, the fed has our back, the administration has our back, were not going to go through that again i think both of those are reasonable antidotes to why these are traded so well here. One of gerards points in his notes to us were that also youre now seeing banks taking the higher rater, because they can invest in higher rates thats a good point. Coming up, disney on deck. What will the company say about the box office, park attendance, and bob igers Business Plan a preview next. Plus, caleb silver will joi us, and hes brought his 10,000 question where are investors stashing extra cash right now weve got the answer and much more ahead on fast. You got this. Lets go. Gobble gobble. Ive seen bigger legs on a turkey rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. Welcome back to fast money. Disney ticking higher ahead of tomorrows Earnings Report Deutsche Bank reiterating its buy call, but cutting its price target to 1. 20 to 1 1. 31 a share. Julia boorstin has more. Well, melissa, disneys earnings come on the heels after this afternoons news that espn is making a big move into Sports Betting. I would say its biggest move yet into betting, with a partnership with penn entertainment. Shares of penn spiking on this news and all of this comes as bob igers under pressure to deliver costcutting amid an advertising construction, as well as writers and actors strikes he is exz expecting to see a dee in streaming subscribers disney is expect to grow revenue to 22. 5 billion, while earnings per share projected to decline by 11 to 97 Cents Per Share now, another key number to watch here is losses at disneys direct to consumer division, projected at 759 million. This, after the company warned that operating losses would widen in that division by 100 million, compared to last quarter. Deutsche bank, you just mentioned that report, they say its lower price target is, quote, primarily driven by lower advertising revenue and underperformance at the box office, and to a lesser expent, driven by lighter park attendance in orlando. Plus, there are so many looming questions, including so much disney will have to pay to buy out comcasts stake in hulu, and also, what hulus greater integration into disney will look like. And then, of course, theres the future of espn getting into betting was something, you know, that doesnt really fit into the disney sort of image and was thought of something that they would never really entertain does that underscore the notion that bob iger is really considering all options at this point . That that is what he has to do i think yes and yes, it underscores hes considering all options, but we have to look at the fact that Sports Betting is increasingly becoming legalized in so many states so, the more its legalized across the country, the more it simply makes sense for disney to engage in this, as part of its business think the reality is, as it becomes legal, there is going to be betting on sports, people are watching on espn, and espn is saying, if its going to happen, lets be part of it. Youjulia, thank you of course, the other part of the story is penn, which is seeing a big surge in the afterhours session on the news of this alliance also divesting barstool sports, selling it back to the founder what do you make of this whole thing . Well, it definitely underscoring and emphasizes disneys pursuit 0 profitability. That covers the gaming or sposport ing betting aspect kind of reading through the fine print, the fact that penn still retains a 50 clawback on any liquidation or monetization is barstool is an ace in the high school. And espn was going to say, i were going to do this, and perhaps go counter trim, were going to make sure branding is in line with the image we have spent all these years or establishing its online Sports Betting has not been profitable and its been a burn for a lot of people, though, i agree, its an exciting place its also the concept of keeping espn and actually there being a valuation uplift from what could, you know, be this was, at one point, people were pricing in sum of the parts and the spinoff of espn is being very highly valued i think this is very good news for disney. One options trader is feeling less than optimistic about tomorrows report. Mike khouw has the action. Mike yeah, so, disney right now, the Options Market is implying a move of about 5. 5 thats actually less than the 6 or so that its averaged over the last eight reported quarters calls did edge out puts very slightly, but the biggest individual call trade was actually a sale of 2500 of the august 90 calls. They were 1. 72. The caller obviously betting that the stock is not going to rally significantly through that 90 strike price my guess is its somebody looking to collect a little bit of premium against a long equity position all right, mike, thank you. For more options action, tune into the full show, friday, 5 30 p. M. Eastern time. Should i stay or should i go how the classic clash song might perfectly summarize whats facing investors right now were diving into the sentiment survey, when fast money tus. swords clashing had enough . No. Arthritis. Here. Aspercreme arthritis. Full prescriptionstrength . Reduces inflammation . Thank the gods. Dont thank them too soon. Kick pain in the aspercreme. With powerful, easytouse tools, power e trade makes complex trading easier. React to fastmoving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you wont miss an opportunity. E trade from morgan stanley. Businesses need 5g solutions today. Thats why they choose tmobile for business. Mlb partners with tmobile to not only enhance the fan experience, but to advance how the game is played. Aaa relies on tmobiles network to stay connected nationwide, so they can help get their members back on the road. And were helping pano ai innovate, to stop the spread of wildfires. Nows the time to see what americas largest 5g network can do for your business. Welcome back markets may have been down today, but investors are feeling the most optimistic they have felt all year. Lower inflation, the possibility of rate cuts are slowly reigniting investor interest in stocks caleb silver is here to help us break it down. You came to the right show with the right selling point. Should i stay or should i go and a great band. Thats right. Individual investors channeling their inner mick jones here, because they are kind of caught in this. We asked them, do you have a fear of missing out or do you think the best is yet to come . More people feel like the markets a little overheated here we may have come too far too fast about 48 . That said, theyre still pretty optimistic and they will buy stock if given the chance. I thought the breakdown in terms of what theyre buying was really interesting but it looks more dispersed versus other times that youve come here, where theyre all in stocks or much more in cds, now sort of even a little balance going on and we had older readers who responded to survey, and they want to preserve cash. There is also money in the bank, 4 no joke when you are uncertain about the future, still pretty popular here. Stocks very close behind etf, of course, a cousin, and then bonds, 24 . Crypto, way down on the list, even though bitcoin has been one of the Top Performing assets all year we love when you come, because you let us remind us theres other things out there that the stocks that we tend to talk about a lot but last week, there was the tupperware, the rite aid, the yellow are you seeing interest in that . What does that mean to you when you see that sort of behavior at a time when the markets kind of cooled off a little bit here yeah, people are trying to get into something moving quickly. Our readers, balanced investors here, they manage their own money or work with an adviser. We see the searches for, how do i short that stock and a lot of that was happening last week you see some of these investors who come to us, figuring out, whats the downside, how do you take advantage the 10,000 question, the question i love on your survey, what is the verdict this time around stocks. It was just creeping higher the last time i was here its decidedly stocks. While theyre worried and theres overvaluation going on here, they do they would put an extra 10k in stocks, which is kind of like, theyre saying one thing but they might do another with that extra money. The appetite is strong right now. Do you feel like were at an Inflection Point in the markets with your survey i think so, too i think that weve come a long way in the past year and a lot of people took them time towar up to the bull market. Its here in full force, even though the last week has been shaky. A lot of people dont want to miss out but i think this is an appetite that we havent seen in awhile a lot of cash sitting on the sidelines. Always good to see you, caleb, thank you up next, final trades. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . Please dont go by harry casey, Richard Raymond finch sfx ping please dont go please dont go. Please dont go please dont go dont goooooo dont go away get a free storage upgrade when you preorder at tmobile. Please dont go do not miss an exclusive interview with the ceo of x, formerly known as twitter, thursday right here on cnbc. Final trade time chris . I expect it will keep doing so dan nathan . Yeah, you know, lyft was also in my acronym, not doing great welcome i think its a buy. Bonawyn squarely in a longterm downtrend and im not going to fight that trend tim seymour this whole energy thing im with chris s Schlumberger International rig demand increase the Company Getting near fouryear highs and were seeing, i think, Investor Sentiment are now traders in energy a record high for almost a multiyear high in schlumberger right there all right, thank you for joining us, chris. Thank you for watchin inft g as money. Mad money if youre going to speak stocks you need a healthy amount of skepticism. You cant en