Transcripts For CNBC Fast Money 20240713 : vimarsana.com

Future and later, President Trump says the time for negative Interest Rates is now. So were breaking out our crystal ball to see what the market will look like in a world of negative rates and we start with the market selloff the stocks tumbling after the path forward is highly uncertain and subject to many downside risks. The prolonged recession and weak recovery can discourage business advancement and expansion further limiting the growth of jobs and the pace of technological advancement. The result could be an extended period of low productivity growth and stagnant incomes. And then theres this, Stanley Drunkenmiller telling the Economic Club of new york that the risk reward for equities may be as bad as hes ever seen and scott telling scott wapner that this may be the second most overvalued market hes ever experienced so did the markets just get a big dose of reality, guy first of all, i know youre not in charge of music at cnbcs fast money and im getting ready for the twitter hatred, but danger zone by kenny rogers is loggins, not rogers yeah. Loggins, rogers, doesnt matter i mean, you know loggins my point is its an awful its an awful song and loggins and messina ill take, but kenny loggins. Come on, man. With that said, there are a lot of people that bow at the feet of david terp for good reason, but those people, maybe we shouldnt listen if you liked him when he was bullish, you have to respect him when hes staying this is one of the most overvalued markets in his career and that on top of what Stan Drunkenmiller said it has to give you reason for concern and kudos for dan nathan who will fricka see me at some point of the show while the markets been going higher. The good point about today if there is a good thing is that the s p traded smack down to 2790 held and bounced 30 handles into the close ill take that as a ray of sunshine, but you doused it with that awful choice of music i actually called for that specific song, guy, knowing that you hated it dan nathan, frickasee now or later . Listen, guy mentioned that technical level 2790 i think whats interesting about that is that in the s p 500 that is almost exactly the midpoint of the range from the february highs to the march lows. Its also a level where we were a month ago and its also a level where we were a year ago so the market has made very little progress over a longer period of time and right now its taking time to digest i want to be very clear, and i think every single one of us panelists in late march probably to the day whether it be the 23rd or the 24th would say that the peak to trough decline was overdone we expected a bear market rally in the range of 20 . We got to 35 . That might be commensurate with the sort of fiscal and monetary response that we got in such a short period of time, but now investors have to make a decision i think listening to some of these guys like tepper and drunkenmiller who is one of the smartest investors of the last three decades makes a lot of sense. They listened to a little bit about their history with the markets and their history with valuation and their history with crisis and to me you want to be listening to the voices right now especially when the market is at a critical technical level. I know you hang like many Market Participants hang on his every word he indicated that his worstcase scenario is a period of low productivity growth and prolonged slow growth and income which is not a good sign for the economy and not a good sign for the stock market and we need fiscal stimulus which almost sounds like that fed backstop is limited in what it can do, and we hit this over and over again. This is not just a liquidity problem, it is right now, but it could be a solvency problem which the fed cant necessarily solve. No, they cant, and thats the problem ultimately with negative Interest Rates, too ill save that for a later part of the show, and the fed cant solve companies that have no ebitda and ultimately you will get into a situation where it will be untenable. Look feds powell today was realistic at best, but on the down side he pointed to an economy that will need more low pressure and that all they have done here is to try to, you know, throw a lifeboat to liquidity and thats really all they should be doing so today was a concern, and it was a concern because i think you really had converging thoughts okay we just talked about Market Players and how about the u. S. China rhetoric and the guys did a nice job, and i thought they were ratcheted up today and through the mouthpiece, it often is the Chinese Government that there will be consequences for states or individuals or companies that attempt to extract some kind of litigation or something against the chinese for covid19 i think we had a handful of things after a sixday run in the markets before yesterday or obviously the tide turned and the technicals broke down and we have carter here today to talk about those charts. The gremlins have gone for now so karen is with us. Karen, what did you make of todays action in light of your final trade yesterday which was mimed effectively when you crossed your arms and i think mimed may be underutilized in this format of television, but you crossed your arms indicating that you will stand pat. Its a stand pat do nothing right. I think that i mean, obviously the run has been enormous so we all know that dan talked about the magnitude of the bounceback, so thats the number one thing and then i think that, you know, we havent had we havent had a look at how openings are going and how slow is it going to start out and how long will it take to actually get some real momentum and get a sense of how long it will take . I feel like we have no data yet on that, yet the market seems to have priced even with this twoday selloff seems to have priced things going pretty well in terms of people going out to eat again and restaurants are doing well and theres hope for some retailers so i think that ultimately, we will get there, but i dont know how easy its going to be. This rally the last six weeks made it look like no problem its going to be really easy all of that being said, im long im always long. In a market like this im not sure what to do except to wait for things to come my way or put on some hedges when they get too frothy im short some qqqs and im absolutely long. Google is my favorite position and facebook, apple, i have exposure there i have definitely exposure in the banks. Im short some ag and thats not working right now and again, im a little stuck as to what to do because i think that the fed has given us a life raft for some amount of time right i dont know how long that is. We dont know how long it will stay inflated, the raft, that is. Speaking of bank, tim. Good metaphor for some time that they trade h horribly, dan in particular bringing up j. P. Morgan, but you have another chart yeah. Look at wells fargo while we know the banks are making new lows relative to the s p and that speaks to yield curve and negative Interest Rates and credit issues and wells fargo is a bigger concern because this is one of the top three, top four Money Center Banks in the country. We know wells fargos issues and the regulatory things that have run a foul and Customer Loyalty questions and the way the stock is trading and if you look at this chart and its underperformed the xlf in 92 sessions and thats implying that theres something greater going on and ill just say that wells fargo on valuation and its relative performance to the sector looks, you know, untenable here and in fact, there are a lot of conversations as people remember that went on in the crisis of 2008 and 2009 and it forced marriages and i dont think were at that stage here and it is very clear that wells fargo is a wicked underperformer relative to its peers and that is after three years of underperforming and it has me concerned hes got not one, not two, hes got five charts that point to more trouble ahead. Carter, what are you looking at . Hi, team. How are you . Well, it is a problem and we know the markets rally has been on borrowed time postponing the inevitable and things like wells fargo are working. The first chart is that of the bkx, and you can see after the plunge that nice countertrend rally and thats often whats called the bear flag and then you break down through the lower band of that channel now put that in your minds eye and take a look at wells fargo tim just touched on this wells fargo could never actually fly. It never really bounced and its now made a new low and wells for example owe, no bounce whatsoever and heres a comparative chart and number three, the market is a 12month period versus the bkx and now well it is fargo down 49 and weakness begets weakness and both the upside and the down side the fourth of the five, what we know, look at this selloff. This peak to trough so far is down 63 and thats compared to the financial crisis selloff on 82, and i think theres more to go ultimately, i think wells fargo will touch 19. It closed the day at 2253. Last chart and this is the entire Financial Sector going back to the peak in 07 and this is the real the real problem. The entire Financial Sector could never get above the 07 high and think about how high it was for the s p. The financials and the neck an imfor the whole system, the economy. Something is wrong and its been wrong. Carter. Always great to speak with you, thank you. Guy adami, pretty dire chart from carter worth. I wish i was able to view the five of them, but as you know its very difficult for us to see anything where we are, but this, too, shall pass, as they say. Carters been steadfast. Dan has been, as well so i am in agreement. I want to say one thing. Karen brought something up she mentioned being short xyg and i think you said or she said its not working out, and it struck me, karens about as disciplined a trader investor as you will get and that hyg should be working out, but for the fact that this money is poured out from Central Banks and this unofficially disorganized market, but there is damage from the Central Banks activities and it comes in the form of people doing the right thing, but i think thats pfrpt and the Collateral Damage and the unintended consequences of these Federal Reserve activities are broad and thats just one of them i think carters charts and guys commentary a step further and obviously, the weakness in the banks is probably warranted. Its saying something about where the economy is its probably saying what the next ten to 20 in the s p 500 are, but i would tell you equally concerning is the crowding in megacap tech, and i know you guys covered that off the top yesterday where you see microsoft, apple get back to their prior highs and be rejected google back to a prior level where it was rejected in january. A stock like nvidia which trades at nearly 15 times sales is up 33 on the year and its trading, yesterday i was at an alltime high and theres some insanity going on here, so i would say the weakness in financial stocks and banks in particular and the strength in megacap tech are equally concerning when you think about where we are rid now relative to just the valuation in the market relative to where we are in this Economic Cycle which i suspect is going to be a deeper and longer recession than most people think and what the market is pricing right here. We have breaking news here on Fiat Chrysler. Phil lebeau has that. Fiat chrysler and psa peugeot. Both Companies Announced they will be suspending their 2020 ordinary Dividend Payments for Fiat Chrysler shareholders that ordinary dividend, 70 cents a share comes out to more than 1. 1 billion for the company and that was supposed to be paid out a week from today. Because of covid19 both companies are saying no, we wont be paying those dividends out. Both companies are saying this is not going to impact the plans to merge the two automakers. Remember, as part of that merger agreement they have agreed each has agreed to pay out a special dividend to shareholders of about 5. 95 billion. So again, both are saying that that merger continues on pace. We have yet to see the Fiat Chrysler shareholders vote on that merger proposal and thats likely to happen in the next month or so. Both ti at chrysler and suspending their ordinary dividend payouts melissa, thank you the tock is up 6. 6 is that why the deal is is on track and it will be on the special . I think thats right. I think people want to see that deal close and ultimately keeping as much fire power and drawing in lick ridzity is something that well see every other Company Going and where its not obligated i think they should be doing that and remember, regular dividends are giving money back to shareholders thats prudent at a time when the company doesnt need the money ultimately its a disbursement this is not a time to be doing that if you owned a business you wouldnt be doing that so i dont know why they would be held to task for that. This merger is something people want to see get done i think thats the reward in the stock price. As youre seeing there scroll in front of you dividends that have been cut in this environment i suspect that there could be another wave or hesitation after reopenings, when it comes to people relying on dividend points. Reit. Its the prudent thing thing to do and we talked about companies bet gettings free pass, i think a lot of companies will find it more palatable to cut or suspend the dividend think about it, disney, right . Disney not paying their firsthalf dividend and thats kind of amazing to me and we sort of accept that. Its the right thing for them to do if capital is at all an issue you have to save it. Save the capital, not save the dividend. Shares of cisco higher after reporting results and later, more green arrows, the chinese internet stock is jumping and how one of our traders is long widing his name. Fast money is back in two. Rot. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. Pure protein. The best combination to help you stay fit. Welcome back to fast money. We have an earnings alert from cisco. The stock is pulling back with the afterhours high with the call just under way. Lets get to josh lipton for the details. Josh melissa, lets dive right into the segment here. Infrastructure platform and thats the companys core networking offerings that was down 15 to 6. 3 billion. Demand has never been greater, Chuck Robbins on the call, but this area was particularly hard hit by the supply chain disruptions caused by the pandemic and then theres the Application Segment and teleworking tools are now a lifeline, robin and its within the segment and it is down 5 in total to 1. 36 billion, but there was a fair amount of talk, melissa, on this call about webex and thats the Videoconferencing Service and zoom rival they gave metrics and 500 meeting participants for webex and 25 million minutes and that was triple the volume in february security, by the way up 6 and robbins saying theyre seeing solid growth there and he was asked on the call by analysts how does he frame whats going on versus prior periods of Economic Uncertainty and Chuck Robbins saying we are in a better position today than in times of previous uncertainty why . Because of the Security Portfolio modernizing webex with the strong Balance Sheet i fail good, he said on the call and theyre looking for q4 with 72 cents versus expectations of 679 cents. In q4 they do see a revenue decline of 8. 5, and 11. 5 and analysts thought they would see a decline of 12 on q4 be sure to check out mad money. Our own jim cramer sit douting talking about the call we were talking about Companies Getting a free pass when it comes to guidanceand for cisco to give guidance for the Current Quarter when so much of their revenues as a percent is exposed to Public Sector and its exposed to schools, for instance, small and medium businesses and all of the things that are shut down or really harmed in this pandemic. Yeah. They have exposure to, and to your point because if you look at the quarter, by the way, their operating margins came in way above what the street was looking for. The quarter by itself was a very good quarter to your points there are headwinds theyre facings and guidance they gave to the Fourth Quarter sort of speaks to that its a cheap stock i think we all would agree that its not an expensive stock and yeah, they dont have the eps growth that you would want, but go back and look and its failed there a couple of times and its failed to trade it is to buy it on a break at 44 which i think you will see right now or wait for it toward 39 level ive got it back todays losses and break it down at 44. 5, mel dan your point, mel, about the Public Sector exposure and the enterprise exposure and those ared areas where if youre looking for things to pick on those would be the headwinds that you would have over the next couple of quarters and ita seems like theyre executing very well and the ability to give guidance for the Current Quarter given the environment that were in, and thats pretty impressive for the subscriptions and Software Sales is up 75 and i think its up 9 year over year and thats what bulls are focusing on. I just want to make one other point. Webex is the zoom competitor and zoom has a 47 billion market cut and trading about 50 times sales and ciscos market cap is a little over three times that of zoom and i think theres probably value to be unlocked there if cisco can start to get more momentum in this learn from homen viern the over the next year that well certainly be in. Coming up, President Trump<\/a> says the time for negative Interest Rates<\/a> is now. So were breaking out our crystal ball to see what the market will look like in a world of negative rates and we start with the market selloff the stocks tumbling after the path forward is highly uncertain and subject to many downside risks. The prolonged recession and weak recovery can discourage business advancement and expansion further limiting the growth of jobs and the pace of technological advancement. The result could be an extended period of low productivity growth and stagnant incomes. And then theres this, Stanley Drunkenmiller<\/a> telling the Economic Club<\/a> of new york that the risk reward for equities may be as bad as hes ever seen and scott telling scott wapner that this may be the second most overvalued market hes ever experienced so did the markets just get a big dose of reality, guy first of all, i know youre not in charge of music at cnbcs fast money and im getting ready for the twitter hatred, but danger zone by kenny rogers is loggins, not rogers yeah. Loggins, rogers, doesnt matter i mean, you know loggins my point is its an awful its an awful song and loggins and messina ill take, but kenny loggins. Come on, man. With that said, there are a lot of people that bow at the feet of david terp for good reason, but those people, maybe we shouldnt listen if you liked him when he was bullish, you have to respect him when hes staying this is one of the most overvalued markets in his career and that on top of what Stan Drunkenmiller<\/a> said it has to give you reason for concern and kudos for dan nathan who will fricka see me at some point of the show while the markets been going higher. The good point about today if there is a good thing is that the s p traded smack down to 2790 held and bounced 30 handles into the close ill take that as a ray of sunshine, but you doused it with that awful choice of music i actually called for that specific song, guy, knowing that you hated it dan nathan, frickasee now or later . Listen, guy mentioned that technical level 2790 i think whats interesting about that is that in the s p 500 that is almost exactly the midpoint of the range from the february highs to the march lows. Its also a level where we were a month ago and its also a level where we were a year ago so the market has made very little progress over a longer period of time and right now its taking time to digest i want to be very clear, and i think every single one of us panelists in late march probably to the day whether it be the 23rd or the 24th would say that the peak to trough decline was overdone we expected a bear market rally in the range of 20 . We got to 35 . That might be commensurate with the sort of fiscal and monetary response that we got in such a short period of time, but now investors have to make a decision i think listening to some of these guys like tepper and drunkenmiller who is one of the smartest investors of the last three decades makes a lot of sense. They listened to a little bit about their history with the markets and their history with valuation and their history with crisis and to me you want to be listening to the voices right now especially when the market is at a critical technical level. I know you hang like many Market Participants<\/a> hang on his every word he indicated that his worstcase scenario is a period of low productivity growth and prolonged slow growth and income which is not a good sign for the economy and not a good sign for the stock market and we need fiscal stimulus which almost sounds like that fed backstop is limited in what it can do, and we hit this over and over again. This is not just a liquidity problem, it is right now, but it could be a solvency problem which the fed cant necessarily solve. No, they cant, and thats the problem ultimately with negative Interest Rates<\/a>, too ill save that for a later part of the show, and the fed cant solve companies that have no ebitda and ultimately you will get into a situation where it will be untenable. Look feds powell today was realistic at best, but on the down side he pointed to an economy that will need more low pressure and that all they have done here is to try to, you know, throw a lifeboat to liquidity and thats really all they should be doing so today was a concern, and it was a concern because i think you really had converging thoughts okay we just talked about Market Players<\/a> and how about the u. S. China rhetoric and the guys did a nice job, and i thought they were ratcheted up today and through the mouthpiece, it often is the Chinese Government<\/a> that there will be consequences for states or individuals or companies that attempt to extract some kind of litigation or something against the chinese for covid19 i think we had a handful of things after a sixday run in the markets before yesterday or obviously the tide turned and the technicals broke down and we have carter here today to talk about those charts. The gremlins have gone for now so karen is with us. Karen, what did you make of todays action in light of your final trade yesterday which was mimed effectively when you crossed your arms and i think mimed may be underutilized in this format of television, but you crossed your arms indicating that you will stand pat. Its a stand pat do nothing right. I think that i mean, obviously the run has been enormous so we all know that dan talked about the magnitude of the bounceback, so thats the number one thing and then i think that, you know, we havent had we havent had a look at how openings are going and how slow is it going to start out and how long will it take to actually get some real momentum and get a sense of how long it will take . I feel like we have no data yet on that, yet the market seems to have priced even with this twoday selloff seems to have priced things going pretty well in terms of people going out to eat again and restaurants are doing well and theres hope for some retailers so i think that ultimately, we will get there, but i dont know how easy its going to be. This rally the last six weeks made it look like no problem its going to be really easy all of that being said, im long im always long. In a market like this im not sure what to do except to wait for things to come my way or put on some hedges when they get too frothy im short some qqqs and im absolutely long. Google is my favorite position and facebook, apple, i have exposure there i have definitely exposure in the banks. Im short some ag and thats not working right now and again, im a little stuck as to what to do because i think that the fed has given us a life raft for some amount of time right i dont know how long that is. We dont know how long it will stay inflated, the raft, that is. Speaking of bank, tim. Good metaphor for some time that they trade h horribly, dan in particular bringing up j. P. Morgan, but you have another chart yeah. Look at wells fargo while we know the banks are making new lows relative to the s p and that speaks to yield curve and negative Interest Rates<\/a> and credit issues and wells fargo is a bigger concern because this is one of the top three, top four Money Center Banks<\/a> in the country. We know wells fargos issues and the regulatory things that have run a foul and Customer Loyalty<\/a> questions and the way the stock is trading and if you look at this chart and its underperformed the xlf in 92 sessions and thats implying that theres something greater going on and ill just say that wells fargo on valuation and its relative performance to the sector looks, you know, untenable here and in fact, there are a lot of conversations as people remember that went on in the crisis of 2008 and 2009 and it forced marriages and i dont think were at that stage here and it is very clear that wells fargo is a wicked underperformer relative to its peers and that is after three years of underperforming and it has me concerned hes got not one, not two, hes got five charts that point to more trouble ahead. Carter, what are you looking at . Hi, team. How are you . Well, it is a problem and we know the markets rally has been on borrowed time postponing the inevitable and things like wells fargo are working. The first chart is that of the bkx, and you can see after the plunge that nice countertrend rally and thats often whats called the bear flag and then you break down through the lower band of that channel now put that in your minds eye and take a look at wells fargo tim just touched on this wells fargo could never actually fly. It never really bounced and its now made a new low and wells for example owe, no bounce whatsoever and heres a comparative chart and number three, the market is a 12month period versus the bkx and now well it is fargo down 49 and weakness begets weakness and both the upside and the down side the fourth of the five, what we know, look at this selloff. This peak to trough so far is down 63 and thats compared to the financial crisis selloff on 82, and i think theres more to go ultimately, i think wells fargo will touch 19. It closed the day at 2253. Last chart and this is the entire Financial Sector<\/a> going back to the peak in 07 and this is the real the real problem. The entire Financial Sector<\/a> could never get above the 07 high and think about how high it was for the s p. The financials and the neck an imfor the whole system, the economy. Something is wrong and its been wrong. Carter. Always great to speak with you, thank you. Guy adami, pretty dire chart from carter worth. I wish i was able to view the five of them, but as you know its very difficult for us to see anything where we are, but this, too, shall pass, as they say. Carters been steadfast. Dan has been, as well so i am in agreement. I want to say one thing. Karen brought something up she mentioned being short xyg and i think you said or she said its not working out, and it struck me, karens about as disciplined a trader investor as you will get and that hyg should be working out, but for the fact that this money is poured out from Central Banks<\/a> and this unofficially disorganized market, but there is damage from the Central Banks<\/a> activities and it comes in the form of people doing the right thing, but i think thats pfrpt and the Collateral Damage<\/a> and the unintended consequences of these Federal Reserve<\/a> activities are broad and thats just one of them i think carters charts and guys commentary a step further and obviously, the weakness in the banks is probably warranted. Its saying something about where the economy is its probably saying what the next ten to 20 in the s p 500 are, but i would tell you equally concerning is the crowding in megacap tech, and i know you guys covered that off the top yesterday where you see microsoft, apple get back to their prior highs and be rejected google back to a prior level where it was rejected in january. A stock like nvidia which trades at nearly 15 times sales is up 33 on the year and its trading, yesterday i was at an alltime high and theres some insanity going on here, so i would say the weakness in financial stocks and banks in particular and the strength in megacap tech are equally concerning when you think about where we are rid now relative to just the valuation in the market relative to where we are in this Economic Cycle<\/a> which i suspect is going to be a deeper and longer recession than most people think and what the market is pricing right here. We have breaking news here on Fiat Chrysler<\/a>. Phil lebeau has that. Fiat chrysler and psa peugeot. Both Companies Announced<\/a> they will be suspending their 2020 ordinary Dividend Payments<\/a> for Fiat Chrysler<\/a> shareholders that ordinary dividend, 70 cents a share comes out to more than 1. 1 billion for the company and that was supposed to be paid out a week from today. Because of covid19 both companies are saying no, we wont be paying those dividends out. Both companies are saying this is not going to impact the plans to merge the two automakers. Remember, as part of that merger agreement they have agreed each has agreed to pay out a special dividend to shareholders of about 5. 95 billion. So again, both are saying that that merger continues on pace. We have yet to see the Fiat Chrysler<\/a> shareholders vote on that merger proposal and thats likely to happen in the next month or so. Both ti at chrysler and suspending their ordinary dividend payouts melissa, thank you the tock is up 6. 6 is that why the deal is is on track and it will be on the special . I think thats right. I think people want to see that deal close and ultimately keeping as much fire power and drawing in lick ridzity is something that well see every other Company Going<\/a> and where its not obligated i think they should be doing that and remember, regular dividends are giving money back to shareholders thats prudent at a time when the company doesnt need the money ultimately its a disbursement this is not a time to be doing that if you owned a business you wouldnt be doing that so i dont know why they would be held to task for that. This merger is something people want to see get done i think thats the reward in the stock price. As youre seeing there scroll in front of you dividends that have been cut in this environment i suspect that there could be another wave or hesitation after reopenings, when it comes to people relying on dividend points. Reit. Its the prudent thing thing to do and we talked about companies bet gettings free pass, i think a lot of companies will find it more palatable to cut or suspend the dividend think about it, disney, right . Disney not paying their firsthalf dividend and thats kind of amazing to me and we sort of accept that. Its the right thing for them to do if capital is at all an issue you have to save it. Save the capital, not save the dividend. Shares of cisco higher after reporting results and later, more green arrows, the chinese internet stock is jumping and how one of our traders is long widing his name. Fast money is back in two. Rot. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. Pure protein. The best combination to help you stay fit. Welcome back to fast money. We have an earnings alert from cisco. The stock is pulling back with the afterhours high with the call just under way. Lets get to josh lipton for the details. Josh melissa, lets dive right into the segment here. Infrastructure platform and thats the companys core networking offerings that was down 15 to 6. 3 billion. Demand has never been greater, Chuck Robbins<\/a> on the call, but this area was particularly hard hit by the supply chain disruptions caused by the pandemic and then theres the Application Segment<\/a> and teleworking tools are now a lifeline, robin and its within the segment and it is down 5 in total to 1. 36 billion, but there was a fair amount of talk, melissa, on this call about webex and thats the Videoconferencing Service<\/a> and zoom rival they gave metrics and 500 meeting participants for webex and 25 million minutes and that was triple the volume in february security, by the way up 6 and robbins saying theyre seeing solid growth there and he was asked on the call by analysts how does he frame whats going on versus prior periods of Economic Uncertainty<\/a> and Chuck Robbins<\/a> saying we are in a better position today than in times of previous uncertainty why . Because of the Security Portfolio<\/a> modernizing webex with the strong Balance Sheet<\/a> i fail good, he said on the call and theyre looking for q4 with 72 cents versus expectations of 679 cents. In q4 they do see a revenue decline of 8. 5, and 11. 5 and analysts thought they would see a decline of 12 on q4 be sure to check out mad money. Our own jim cramer sit douting talking about the call we were talking about Companies Getting<\/a> a free pass when it comes to guidanceand for cisco to give guidance for the Current Quarter<\/a> when so much of their revenues as a percent is exposed to Public Sector<\/a> and its exposed to schools, for instance, small and medium businesses and all of the things that are shut down or really harmed in this pandemic. Yeah. They have exposure to, and to your point because if you look at the quarter, by the way, their operating margins came in way above what the street was looking for. The quarter by itself was a very good quarter to your points there are headwinds theyre facings and guidance they gave to the Fourth Quarter<\/a> sort of speaks to that its a cheap stock i think we all would agree that its not an expensive stock and yeah, they dont have the eps growth that you would want, but go back and look and its failed there a couple of times and its failed to trade it is to buy it on a break at 44 which i think you will see right now or wait for it toward 39 level ive got it back todays losses and break it down at 44. 5, mel dan your point, mel, about the Public Sector<\/a> exposure and the enterprise exposure and those ared areas where if youre looking for things to pick on those would be the headwinds that you would have over the next couple of quarters and ita seems like theyre executing very well and the ability to give guidance for the Current Quarter<\/a> given the environment that were in, and thats pretty impressive for the subscriptions and Software Sales<\/a> is up 75 and i think its up 9 year over year and thats what bulls are focusing on. I just want to make one other point. Webex is the zoom competitor and zoom has a 47 billion market cut and trading about 50 times sales and ciscos market cap is a little over three times that of zoom and i think theres probably value to be unlocked there if cisco can start to get more momentum in this learn from homen viern the over the next year that well certainly be in. Coming up, President Trump<\/a> calling for negative Interest Rates<\/a>. So that got us thinking, what would that world look like well break down the three ways you can navigate going negative. And later, nearly 30year lows for shares of General Electric<\/a> and options traders are betting on more pain ahead well break down that trade when fast money returns atures bou. To give you the support you need. To stay motivated keep active and sleep well. Add a little more health to your day. With natures bounty. Happy birthday so, it goes. Hold up your answers. How is mickey doing today . Youre just a really hard worker. Welcome back to fast money. We have breaking news coming out of the white house Kayla Tausche<\/a> has the details. Kayla . Melissa, President Trump<\/a> taking questions from reporters in the cabinet room following an event with the state leadership from north dakota and colorado he was answering a question about an answer that his top Infectious Disease<\/a> expert dr. Fauci gave in testimony yesterday where he said that states that reopened too quickly would face serious consequences. President trump said that he thinks that comment was not acceptable from dr. Fauci. He was also asked about companies that take loans intended for small businesses. He said if these Big Companies<\/a> received loans and they dont give them back by a thursday deadline then trump personally will go after them he also says that he believes that fed chair jay powell is doing a better job, that his performance has improved with powell, but says theyre still apart on one key issue and that is Interest Rates<\/a>. President trump still believes, he says that the u. S. Should have negative Interest Rates<\/a> and that he hopes the fed chair will come around on that and this is a position that the president has been touting long before the Coronavirus Crisis<\/a> when i spoke to white house officials at that time earlier this year when the president was touting negative Interest Rates<\/a>, at they called it brinksmanship and it is unclear with how much the world has changed at that time whether he truly thinks the u. S. Should have negative Interest Rates<\/a> now melissa . Thank you Kayla Tausche<\/a> in washington. Earlier today fed chair Jerome Powell<\/a> addressed those growing calls for the fed to entertain the idea of negative rates he has no plans to resort to negative rates for now so that got us thinking, in a world of negative rates, how do you trade this market . Lets bring in chris harvey, the head of equity strategy, chris, great to have you with us. I think this is the big question for people out there. So just before we get to individual sectors and things like that in a negative rate world, what is the macro view of what that world looks like if we had to go to negative rates. So if you think about it, if we had to have negative rates you have to think about that, and something would go awry and its some sort of economic malaise and thats a difficult environment to be in and thats a very difficult environment for risk and risk product. So were not big fans of a negative rate environment and we dont think it would be great for equities and many other risk products. Are you not fans of negative rates because you dont like negative rates and the impact negative rates will have or because negative rates, if theyre adopted means that theyre adopted because the backdrop is so bad so the thing is a little bit of both, but more the latter, right . So negative rates again, what you have to believe is something thats gone awry and that environment will be difficult to get there and furthermore, what weve seen from europe, negative rates is not a great situation and it hasnt helped out the europeans and im want sure what it would do and its problematic for large parts of the economy its problematic for large parts of the capital markets, as well, financials or otherwise. Okay. Lets drill down there, in that negative Interest Rate<\/a> world, chris, what would market leadership look like i think market leadership again, if we think about the big picture you will have in all likelihood a lack of growth and a scarcity of growth that will drive people to your high growers and your steady earners and that will be your largecap Growth Companies<\/a> and there will be a nifty 50 type environment and maybe even a nifty five in addition to that theyll want certainty and you can find that in your utility stocks obviously, not high growth and if you bring rates to zero or negative you can justify a high multiple and uber caps as well as utilities last question here and im sure the traders will have some, too. Market loser, you mentioned banks and the banks are trading horribly and theyre trading as though negative rates is a foregone conclusion and when that actually happens . In a negative rate environment what i think would occur is you would put net pressure net interest margins and they would be squeezed one more time. Furthermore, if youre in an economic malaise credit will be more difficult so theyll have to post more reserves and lastly, one of the reasons why you want to own these companies and why theyre trading heavy as of late is the giveback story. Your payout ratios will come down overall its a bad environment for ult in im, for bank multiple ims and its a bad environment for the banks and its just a matter of this is not an environment where banks can operate quite well chris always great speaking to you got to let you go. Chris harvey. Karen finerman, where do you stand on a negative Interest Rate<\/a> playbook and what that world would be like . Well, im not quite sure what it would be like. Chris brings up a good point and weve seen it in action in europe and it hasnt had the intended effect to start their economy on a growth cycle, so i hope we dont get there they only have their income from net Income Margin<\/a> and it will weigh on them and even though rates are zero or negative and you could even argue for a super high multiple, i dont think well get that on the market at large, so i think it would be bad for banks. I mean, i wouldnt i wouldnt do this, but if you really believe in negative rates and you want to be long bonds. Im more afraid of bonds going the other way. Dan, if memory serves me right you had said on one of the shows in the past couple of weeks that if we went to negative Interest Rates<\/a> youd sell everything and quit thats how strongly you feel no, i said that if the fed starts buying equities and theyve already made that decision because you can just look at where fed funds futures are looking out. Heres the thing, mel. Just look at the sx7 it is down 90 from the alltime highs and its 2 from its alltime lows. Theyre telling you how this trades and the Topix Bank Index<\/a> in japan down 92 from the alltime highs and this is why the banks are going down right now. Theyre pricing this in. So all of our banks are going lower and the longer that the president keeps pushing powell and pushing this narrative its just like a weight on the banks necks here in the u. S. Guy says this all of the time about trump. Be careful what he wishes for lower oil and they crash and the circumstances economically have not been pretty good so far. We have breaking news on a cancer drug trial. Meg terrell has more this is an update on allogenes data drug ahead of the Cancer Research<\/a> conference that takes place in chicago every june while it will be taking place virtually this year, allogenes stock up 15 and this is a drug known as cart where you are taking someones own tcells out of their body and genetically modifying them to fight cancer and giving them back and this is an off the shelf approach, a new approach, where its in the early days of the treatment, but they are showing positive early results in clinical trialsin the form of lymphoma you are seeing that drive the stock up now almost 20 , mel and we do expect to see more data at the asco Virtual Conference<\/a> in just about two weeks sending it back to you meg, thank you. Meg terrell, it is now up 20 in the afterhours session. Guy adami. Research goes on in other parts of the drug industry and it speaks to what we have been talking about for a while and bigcap pharma and the biotech stocks yesterday we talked about the ibb making this new high and you go back and meg was just talking about, go back and take a look at what happened to juneau all in the same space. The biotech names regardless of what you think about theyre profiting, their prices, their stocks make a lot of sense i think more so now in this environment and thats something weve been saying now for months. Tim, quick. And Balance Sheet<\/a>s in biotech especially the top of the weightings of the sector are very strong and right look at the outperformance anyone attaching the cart whether it was gilead with the acquisitions and thats the space to be in and certainly where youre getting the multiple allogene up 21 . The one sentence in the major mall merger that could put the whole thing on the rocks well tell you what it is. Plus why one Analyst Thinks<\/a> the lookdown could provide a longterm best boost thats when fast money returns. Health to your day. With natures bounty. This virus is testing all of us. And its testing the people on the front lines of this fight most of all. So abbott is getting new tests into their hands, delivering the critical results they need. And until this fight is over, we. Will. Never. Quit. Because they never quit. Welcome back to fast money. Retail taking it on the chin as malls and centers begin to reopen Simon Property<\/a> Group Getting<\/a> beaten up. Earlier this year simon agreed to acquire talbman centers and whats ahead for the megamerger. The chairwoman is here and shes been reading the fineprint on that karen, what are you watching yes so as you talked about, they finally announced a merger and the stock had gone up to 52. 50 and simon had wanted to buy taubman for years, but now were in a mall apocalypse and so the question is is the deal in doubt . Theyre trading like it is this is the risk in risk arbitrage, but lets look at the merger agreement, right . These things are negotiated and its a very well thought out provision here thats very specific and this is an airtight merger it has this sentence these are things that you cannot use as an excuse to walk and both sides agreed to this. It is not an excuse, a volcano, a tsunami, a pandemic and goes on and lists other plagues and what not, but the pandemic, thats a very interesting word in our time. Good for these lawyers for putting that in there because that makes this agreement very tight, but how does this actually play out in the real world . How does this get resolved its my guess, simon, of course, wants out. Theyre obviously paying way too much and the world has dramatically changed it is my guess that theyll find some nitpicky thing about taubman having to close their mall which is is beyond taubmans ability to do anything, and i dont think that works and theyll say were not going to close sue us youll be in court for years and maybe youll win, taubman and maybe you wont or accept a skinnier price and well close the deal ink this is the most likely way this is resolved and it is certainly with risk. I dont own it i dont have the the cojones to own it. Nice, polite word substitution that specific clause, and karen pointed this out to me and this was early february and we knew that there was some sort of a Health Crisis<\/a> over in china which was spreading through europe and maybe the writing was on the wall for the very smart lawyer who said we have to get that pandemic thing in and you have to wonder on the other side of that, and saying were not going to fight pandemic anymore, just let it in, and what are the odds guy adami, in terms of this space, commercial real estate in general not looking good these days no, and we addressed it last night. We talked about it cbre they all seem to be going back to the lows we saw on march 23 d, but to karens point and if you want to play the deep end of the pool and what did she say . Cojones . I think there is a j or an h, regardless, this is down to 38 and if theres no out for Simon Property<\/a>, maybe tco on a flyer is an interesting trade. You probably have to do it visavis options and again, this is the 100 table and if they were to go anywhere in this space. A may filing for taubman said the deal is still slated to close in betwe2020 and simon sa they didnt give any update on this deal whatsoever and one analyst at mizuho points out that it is impossible to tell if simon is actually cheap even though its gone so far down because they dont have any data they didnt give any data on this call about rent collection or Net Operating Income<\/a>, tim just basic things for valuation metrics. Again, the last numbers we got were the 2020 Net Operating Income<\/a> was up 1 and the last occupancy numbers were up 94 . These numbers sound really high and very hard to fathom in the current environment were in so, right, without Taubman Simon<\/a> is a name that to me has been emblematic of whats been going in commercial real estate for some time. We talked about it for some time and its kind of like investing in homebuilders back in the crisis when you already had this massive move down, but where were these asset values going to go, and i think you look at Major Urban Centers<\/a> as well. Big problems. Shares of jd. Com surging to a fresh twoyear high and well tell you whats got wall street so hot and shares of ge getting hammered and one options trader just made a 1. 5 million bet well break down the action right after this tempurpedics mission is to give you truly transformative sleep. So, no more tossing and turning. Because only tempurpedic adapts and responds to your body. So you get deep, uninterrupted sleep. During the tempurpedic summer of sleep, all tempurpedic mattresses are on sale welcome back to fast money. Jd surging and it is bullish on the retail giants positioning as the demand for essentials ramps up during the coronavirus shutdown j. D. Is not the only chinese internet stock thriving bringing its gains to 20 this year j. D. Will report earnings friday before the bell. Alibaba is on deck one week later. Could this be a good time to get in on the space, tim i think its a great time i think the valuations are decent i think certainly in alibabas case, it trades on peg ratios significantly cheaper than u. S. Mega tech. I think when you look at ten cent the haves and the have notes of postcovid19. Theres major benefits to all of these companies and certainly the secular trends in terms of online retail, but in tencents case, gaming and all of the other i. T. Component parts of their business and social media, theyre kind of in the sweet spot to me tencent, ive said this before its one of the great tech incube airts in the world i own that and i own baba and i dont own jd and this is a space thats proven incredibly resilient in the last three months and the valuations support that would you rather from mr. Dan nathan by the way, viewers have spotted your cat in the background and wondered what its name is and here is the question for you, would you rather amazon or any of the chinese internet names here its tigger and tom, its two bets ten cent is a buy on any pullback and i want to make one point because theres a lot of shade thrown at druckenmiller today and back in 17 when he declared he loves ten cent and they have the netflix of china and they have the ea of china and messaging and social and they have payments i think thats very interesting on a day with multiyear highs here and i think tencent is a buy because of that exposure to the chinese con sumner a postpandemic economy. Tigger and tom, those are cute names for kittys. Youre always willing to play. Of course, chinese internet stocks im not going to pretend that you can wax poetic and we discussed this that the chinese economy will fundamentally change and these internet stocks will be the winner and for you folks out there that are so inclined and this is not a plug for any particular reason, but bunty, vivec and bora, bohra has i lost you. Oh no, this happens every single night and 48 minutes there he is down. All right. Hopefully guy will come back to life shares of ge are down 50 on the bigger beat down for the industrial giant and one stock seeing hefty gains as the coronavirus changes the face of america. What name is it and should you be a buyer well debate that ahead. These days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties<\/a> stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Welcome back to fast money. The industrials getting caught up in todays selloff and that was bad news for General Electric<\/a> and touching its lowest level in more than 30 years. Over in the options market, one trader is betting on much more pain to come mike khouws got the action. Hi, mike hi, melissa so as you pointed out earlier General Electric<\/a> is obviously down sharply on the year and its down 15 or so since the end of april and we saw six times the average daily put volume today and some of that is related to put volume activity that weve been seeing since late april, actually and we saw some big, bearish bets being made then and somebody was adjusting the bearish bets and they sold some of the prior put spreads that they previously held and bought 435,000 and buyers of those puts were there that ge would fall below the strike price by july expiration and i think its not just the stock that gives us clues as to why they might be doing this and take a look at ges debt and its been trading poorly throughout the year and quite recently obviously, these traders are still believing theres further weakness for the equity. Karen, what do you make of this action . I think, you know, i always look to the debt so its interesting that mike would say that obviously with their aviation exposure, i mean, its not a surprise that their debt would be under pressure. So i took a flyer a couple of weeks ago on the hope that coke would be able to turn it around and that expired way out of the money. Tim, youre still in ge yeah. Ive got a small position and the vds is not good. Commercial aircraft will take some time, it will come back and the industrial Balance Sheet<\/a> is the one part of the company that will have net cash nothing to get excited about, but the stock is cheap on the massive basis, at least. Mike, thanks. Mike khouw, to catch the full show friday at 5 00 p. M. Eastern time is options action coming up, the coronavirus pandemic putting health and wellness front and center and one wall street rm sfiays it is time to get overweight this name well bring it to you next boar. Boar. Oh yeah, we gotta take off. You downloaded the Td Ameritrade<\/a> mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. Ah, theyre getting so smart. Choose the app that fits your investing style. At cdwwell weve made our happy,office pet friendly. S. [ bleat ] [ cooing ] maybe a little too pet friendly. Well you know cdw can design a Mobility Solution<\/a> with light powerful devices from lenovo to make your people more productive in or out of the office. Anyone have any questions before we go . Thats great cause i really need to get out of here. Snake people are freaking me out. Hey sheryl, you have a sec . Nuh, uh. For work place productivity you need lenovo, and it orchestration by cdw. People who get it. Welcome back the wellness trade winning out wednesday after jefferies initiated coverage of Weight Watchers<\/a> with a buy rating and a 32 price target that stock popping 5 after the firm said the covid19 crisis had unlocked a durable trend that plays right into Weight Watchers<\/a> wheel house. Consumers prioritizing wellness. That wasnt what i thought, karen, when i heard this call. I thought people were home baking bread, making sandwich e eating chips and you know, maybe you need Weight Watchers<\/a> thats exactly what i was thinking, as well, but good for them if they can do if they can have a wellness part and an overeating part and a dieting part i actually thought this was interesting. I liked the company and mindy grossman, the ceo. The valuation is not crazy here. They paid them a lot of debt over time and they talk about that the Digital Business<\/a> is twice as much margin as their inperson business and if you look at a company like match right now things are going pretty well and this is a com bipati combination of being with people online and the wellness and dieting part of it guy this reeks of would you rather. I didnt say on e i didnt anything about would you rather. Grab an apple have an apple. Eat a banana, maybe steam some broccoli there you go and then short Weight Watchers<\/a> and buy peloton and thats your trade and you will come out looking like a champion there, mel. I do like the peloton thats for sure. Its time for the final trade so well go around the horn why not, right tim seymour, what do you say . So United Health<\/a> is one of those stocks that when and if it pulls back you want to have on your list 260 and the low teens will guarantee something you want to buy when you get that moment dan nathan, are tigger related theyre not mine, theyre the kids and the wife one word, oprah. Come on, guys. This is a data play. This is a data play and this is an interesting call right here and i will just say with the xlf id be a seller of banks on rallies. Dan denying the cats. Karen . Yeah. So this is a retailer ive had my eye on for two years and its too expensive and thats tjx bought it today, and i understand at the moment its not the best place to be although theyll get them for cheap this year. Thats for sure, and in the longer term the business will bounce back . Guy adami, you know what song i really wish we could play right now . Highway to the danger final trade, guy adami. I cant wait for top gun maverick to come out and my sense is this horrific song will make its way into it and ill watch it despite that fact netflix, look at tha my mission is simple, to make you money im here to level the Playing Field<\/a> for all investors. Theres always a bull market somewhere and i promise to help you find it. Mad money starts now hey, im cramer. Welcome to mad money. Welcome to cramerica other people want to make friends. Im just trying to make you some money. My job is not just to entertain you, but to educate, teach call me 1800743cnbc tweet me jimcramer. 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