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tv   Fast Money  CNBC  October 7, 2020 5:00pm-6:01pm EDT

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the only thing i was going to say, based on that rendering, it looks exactly like concord >> they say the advance technologies, it will be quieter, smoother and more efficient for the airlines which should mean lower costs so theoretically it will cost less for you to go from new york to europe like that we are out of time >> good evening. tonight, is disney's dividend in danger an activist investor takes aim plus, we are tracking treatment. jumps of eli lilly shares jump what we are told about a timeline later, hot profits and cold
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pizza. one stock serving up serious game thanks to leftovers the dow was up over 500 points the rally, driven in part by president trump who made an about face on stimulus, putting aid back in play before the november election. so, can we expect this rally to continue you know what struck me about today's rally is that we -- >> what is that, mel >> that we closed nine points higher than when we closed yesterday. we are better off today hoping for piecemeal parts to the stimulus plan than yesterday >> i made it a point, albeit clumsy, that president trump, in my opinion, is extraordinarily focused on the stock market. the administration has said it for years, the stock market is a
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report how well he's doing so for him to tweet something and then watch the dow jones g straight line, it had to be upsetting. i thoughi didn't think it wouldn six hours later, but we are here i think they have learned how to speak the language of the stock market to your point, nothing has changed, but here we are incrementally higher i am not here to tell you a deal will get done, i don't know. but i think the rhetoric will continue to keep the stock market bouyed for the next couple weeks >> what did you think? i don't want to say today was mind-boggling, but it is amazing what the market can move on based on stimulus talks that might not happen and piecemeal
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parts that might or might not happen >> a tweet reversal. it is amazing. random walk down wall street didn't fathom what a tweet storm could do to the market stimulus has been the number one thing driving the market in the very short-term. the second is coronavirus news, both the president's recovery and also the number of cases that's somewhat mixed, but the eli lilly news was good. the last thing was the fed statements about sort of wondering -- i don't know what exactly to infer, but the tenure higher and the banks higher -- >> what kwewe have seen also, tm
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is the yield take a look at the chart today this is the widest since june. we have seen a strong rally at least today in the regional banks as well as the overall sector in the s&p 500. >> anything tied to inflation, reflation or higher rates. i think that's more of the theme consistent not only over the last three or four sessions, but over the last couple of months i would say this on again, off again type stimulus reminds me of the trade news. let's have it be less negative and we are eight points higher than when we started the session yesterday. when we look at those parts of the market that people want to invest in. at some point we say we know
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banks are a problem and the impacts of credit, but there is a thought that the balance sheets are in good shape we are just waiting to see some of this news flow get to the other side the same thing i think on some level i think would be holding on resources u.s. steel up10% look at other resource names we are in the middle of a housing boom we are going to get an infrastructure deal at some point. these are the themes that investors can look at, not day to bay, but ovday, but over the one or two months. >> dan, your take? >> give me a question. there is so much here. mel, what do you want a hot take on >> are you fading or move today? >> just so you know, i haven't
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been fading these moves. the market got hot in july and august it felt like a blowoff top we said it every day we felt stupid and the s&p 500 has been banging around tim just called it it reminds us of the trade talk. it's important to remember where did the trade talks get us other than a bunch of nonsense did you see the trade deficit we have it's the largest we have had since 2006 where did the trade deficit get us some good old-fashioned socialist helping out our farmers and airlines all of that stuff added, it was like accelerant on the downside when the market crashed. now we are waiting for tweets and headlines about further stimulus that the fed chair is
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begging for. he has done his part, put in 4 trillion this year he is saying to congress and the white house and treasury, we need your help we have done 2 trillion in physical and now they want another 2.2. we have these equity gains, so if that's a gauge of the president's performance, if we are going to spend 5 trillion to gain on the s&p 500 and we still have 10 million people out of work, i don't know what. >> that's an interesting take. it's deeper than the up and down movement, when we talk about st stimulus that doesn't happen or is the market willing to look past that? how can it look past that impact >> it's an excellent point i have said this for a while as
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well the divide between the economy and the stock market continues to widen out there are 30 million americans on some way, shape or form of aid. it's devastating number and doesn't seem to be getting better soon. we are tasked with trying to figure out what is going to happen with the market when you have this kind of rhetoric and stimulus talk it's supported. i know you are a prizefighting fan. there was a great muhammad ali interview and howard cosell said you are quite truculent. ali said if that means the greatest of all time, i am
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>> the optimism from a trump by president trump -- let's bring back helane becker always great to speak with you >> thanks for having me. >> this $25 billion to the airlines would specifically be for airlines according to my notes you said it was nice. in what way? that the airlines don't need it, they should cut jobs because that is what they probably need to eventually do >> you take very good notes. what i said in the past was i didn't think there was much for a stimulus plan. i am not sure there is a lot of
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appetite i know everybody has said they are supportive of it, but what are they going to say when labor comes to washington and asks for help four airlines, did not take the loan aleej ant and spirit -- the government will loan the money to the airlines at a lower cost than the airlines will go out and borrow especially american. but to your point, at some level we have to acknowledge we are 65% of where we were, 70% of where we were a year ago what i said this morning to our sales force is that we are
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flying 900,000 people a day. we think we will be at a million about year end that's leisure what is missing is business and international. business isn't coming back until companies figure out how to go back to work and how to receive visitors international is not coming back until countries open their borders. it is not that people don't want to fly, it's that their companies aren't letting them fly. from the airlines perspective, if you were flying 35 or 40 years ago, then you need to size your airlines for maybe not 35 or 40 years ago because i think there is a lot of pent-up demand, i think by 2023 or 2024 we will be in a pretty good spot and a whole lot we don't have time to talk about a whole lot of issues to talk
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about, if it takes a year to retrain them and you have all of these pilots retiring. a year ago united said they were going to hire 10,000 pilots. you can bet that american and delta were going to hire at least as many. now they are begging their pilots to retire early so they don't have to let their junior pilots go because it will take at least a year to retrain them. in the end you can send money down the airlines way, but you are talking about 70 billion in ref sheets and 15 billion in revenue. >> thank you do you think that the law of the jungle should apply and that the
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government should not lend to this specific industry over others and let the chips fall where they may if that's on the equity, so be it >> thanks for the question here is how i'm thinking about that nobody misses pan am twa and eastern airlines most people don't remember them. american, delta and united absorbed all of their routes very nicely. frankly, a bankruptcy filing for any of these airlines would mean a liquidation. i don't think it would be too easy to restructure the airline. do i think the government should let the airlines fail? probably not travel and tourism is 5% of gdp.
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every one creates 13 jobs behind it hotels, such an ecosystem that is hard to destroy i think they should be supportive, but i suppose they should be supportive where it makes sense. like i said before, i think the industry needs to figure out what it should look like we have done ten years worth of aircraft retirement in six months we probably didn't do very many aircraft retirements in the last six or seven years the airlines were having great years and doing well that has to change if we are going to have a successful economy. you need a successful airline industry to have a successful
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economy. >> assuming that speaker pelosi and president trump are listening to this program, would you say to them don't spend that $25 billion on this industry right now? >> yeah, i probably would say think about how you want to spend $25 billion, and maybe now is not the exact right time to do it. >> helane, always great to get your take. thanks so much helane becker of cowen i spoke to another analyst and he said the same thing the airlines analysts are willing to say this money will not be well spent because the airlines need to do a little bit of belt tightening according to this new reality we live in. >> if you look at delta who is going to report next week, the
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numbers are something like revenues down 70% for the third quarter and expenses down only 50 i realize there are fixed expenses they can't fall back on, but i would fall in line as well far be it from me to argue with the airlines analysts. this is not me casting insensitivity over job loss. we are looking at the airline industry and trying to understand the health of the industry and how money should be allocated. yesterday's trade in the airlines was painful if you look at a company like delta, they have more than enough liquidity to get through here if you listen to helane, she is looking at delta two or three years and trying to discount back and what is the number you put on it. i believe she has $36 share
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price. that's the thing, the ones that will be here on the other side that don't have to raise debt and that could be unsecured and could control their own destiny. coming up, unlocking magic disney shares went shooting higher anthe rsd fit major development out of eli lilly, when "fast money" returns
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♪ ♪ ♪ ♪ "hmm's and ahh's" heard in-call. ♪
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>> welcome back. shares of eli lilly jumping today. let's get the details. >> hi, meg >> eli lilly saying it has filed for emergency use authorization of its antibody drug therapy they have already filed for this approval and they plan to file use for that the combo therapy, they would have 50,000 doses available in the fourth quarter
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we talked to dave today about how they are pricing this. this is what he said >> we want to be sure this is available at low or zero cost around the world we put a lot of time and energy into this. we manufacturing it and we want to recoup those. but it creates value in the health care system in terms of reduction in other costs and does so quickly. >> he is not giving an actual price they are planning on but saying they are locking at tiered pricing for developed countries versus less developed countries, the latter of which they would consider philanthropic projects >> would the cocktail be more effective than the single ability body drug? >> yes, it was clear in the data it looked better than the single antibody drug. and the response is better because it avoids the potential
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risk of resistance to the single antibody >> thanks, meg guy, how do you trade lilly? >> i like lilly. pulled back from the all time high it's rallying now. i don't think this is the reason to by it i think there are many other reasons. valuation is a little concerning the other that might be more interesting is bristol-myers on that myo card yeah deal. >> it is amazing that that myocardia deal got no coverage because of the regeneron and treatmentmakers. you have said in the past that treatments are not the reason to buy or sell any of these stocks.
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>> i don't think so. i agree on eli lilly the portfolio, themomentum behind the business is why the stock is traded at a premium biotech looks like it's picking up momentum again. a couple of deals in the space deal but basically balance sheets and largely companies that have proven that a pipeline worked overall. that is a chart that i think looks like one of the best out there. >> biotech is a component of health care. dan, no matter who gets elected, it is obvious a lot of these companies are vital to the economy in terms of development of the vaccines. we have leaned on them and maybe effectively they have government back stop, government backing.
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>> they do until the virus is gone you think about this antibody drug you are talking about here. you asked the right question from what i can tell, it is the cocktail that is most effective. we spent time over the weekend talking about the president's treatment with the cocktail. they are expensive, difficult to administer, they are from an iv. when you think about this, what it means for the economy, really, you have to get to a vaccine. these are not the answers to reopening the economy. these are answers to treating sick people. and a million in the fourth quarter is not going to cut it >> much more ahead on fast money.
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welcome back disney shares moving higher as a new investor takes aim looking to end its $3 billion dividend and create more disney plus con text. dan loeb said -- for more let's bring in rich
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greenfield great to have you with us. you have been a disney critic for a long time. you have called for a lot of these things that mr. loeb is calling for himself. back in may disney announced it was suspending dividends for the first half of the fiscal year. does it come back to there isn't a dividend to allocate >> disney is facing a perfect storm of challenges. theme parks, some are still closed like california. governor newsom said they are not opening soon the florida parks are open, but that is a technical term there is well under 50,000 people on a daily basis. normally there is 150,000 to 160,000 people on an average day. the parks are pretty empty overall they are in a tough
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standpoint the crews ships are not in operation. movie business, can't release a movie until late to middle next year in the near term the dividend -- they will probably be spending the dividend until the business is back up and running the way it normally would be but we 100% agree with everything loeb argued for in that letter. that's what disney needs to do if they want to become netflix, they have to pivot their business faster. they are doing it incremental rather than going all in and taking the opportunity and seizing it >> should it want to be netflix? why? doesn't it need all of its elements to its portfolio that makes its contents attractive to subscribers who probably have a
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subscription to netflix. >> we looked at disney's studio revenues you could add disney studio and warner brother studio and netflix is generating more revenue and on its way to generating more profit than those two. so when you look at subscription on demand, when you look at the scale and economics that brings you, there is a far greater pot of gold on the other side moving to screaming than first we put it out in theaters, and then dvd and it ends up on hbo, screaming, whatever the window the reason i have my background today. i have simpsons, mickey mouse and moana behind me. these are the trending titles. there is no content on disney
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plus those three shows have been number one for almost the entire year for disney plus i think getting rid of windows and getting more movies, like "black widow," but they could also expand on the tv side as well >> what is the number? you quantified it at 3 billion what does disney need to spend to compete with netflix? what would get you excited in 2020 >> first of all, you have to reform the question a little bit. disney has three streaming services first things first they should get out of espn. spin it off and get rid of it. the legacy sportsnet work business is not fixable.
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that is a drag get rid of the espn business and move that to somebody else and let them handle that business and harvest cash flow. but you have the remainder of the services and you have hulu and disney plus. they have three with espn plus and they are talking about making a fourth. put them all in and make one service. we have been arguing about this issue for 18 months. have one service and call it disney plus, disney plus-hulu, but you leverage all of the businesses together so it lessens the load disney probably needs to increase their spend 2 or 3x at a minimum, probably 4 or 5 x maybe it's a two-week window and
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then these movies show up on disney plus rather than waiting 75 or 90 days. that doesn't make sense in 2020. disney's greatest as set, when you think about the lifeblood of disney, it's their movies. they should put their movies soon on to disney plus my 87-year-old uncle signed up for disney plus because he wanted to watch "hamilton. they should learn from that and go all in. >> rich, thank you great to see you if they started making movies that would only have a two-week window or so, i imagine this changes the face of the industry and what is meant by a blockbuster. >> that's a really good point. we are seeing some dramatic changes in the movie theater business that started well before the pandemic and the
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pandemic seemed to accelerate it that die nat i can has been hurting disney as well rich, i read the notes 80% of the streaming was netflix, youtube and amazon prime. what is left for the everybody else they have to spend a lot of money, disney, to try to build this out they also have a lot of debt from the fox acquisition back to dan's point. loeb, absolutely, don't pay the dividend, it's not worth it versus what you need the money for. >> maybe it's an issue for down the line, guy, but do you like rich's forecast for disney do you like his prescription for the business in terms of espn, writing that business off entirely because it's failing?
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>> well, it's failing, but they could turn espn to something if they had a hankling to get into the online gambling business the espn platform could be tremendous for that, but i am with rich on that. the great tom rogers who comes on the show all of the time, has been outspoken on how he will turn this into a profit nl endeavo endeavor he thinks it is three to five years. the line in the sand finally broke out. support. we have talked about this. in terms of risk versus reward where the stock traded down yesterday is a great entry point. i think you could trade it on the long side given that support level. >> what do you think about what
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dan loeb is proposing? >> i am not surprised that has been brought forward but the company is making a more conservative stance. the numbers popped because they showed profitability nobody expected they had been squeezing expenses down if you look at disney plus, the fact they are in the bottom end of the five-year forecast range means that profitability will come faster. i can't dispute the content need bravo to netflix, from my perspective, for the first four or five years it was a portal and a challenge. if disney is competing with that as the hallmark it -- >> -- to big oil dividends
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are they in danger first, shock jock's stock pop. howard stern turned up the volume on one media company today. apps are used everywhere... except work. why is that? is it because people love filling out forms? maybe they like checking with their supervisor to see how much vacation time they have. or sending corporate their expense reports. i'll let you in on a little secret. they don't. by empowering employees to manage their own tasks, paycom frees you to focus on the business of business. to learn more, visit paycom.com keeping your oysters growing while keeping your business growing
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welcome back sirius xm shares jumped on news that they are close to inking a new dole with howard stern the stock got an upgrade today it's up 4 1/2% dan, this was your final trade yesterday. what do you make of the developments today >> howard stern said on his show this morning that he doesn't know about the contract, but if they want to pay him $120 million for five years, he will sign it. this is an important rehire for him. spotify is spending a lot of money to attract that sort of talent howard stern is their flag in the sand so to speak even though the analyst expected if stern would leave, that would
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be about 15% of subscribers. i don't think that will happen so i think you probably have stock to the upside, maybe 7 on good news with them re-signing stern. >> spotify, talking about joe r rogan, kardashian. it's amazing the star power to outlets. >> i am surprised nobody has talked to you, mel will i wake up one day and see that melissa lee is signed to $120 million for three years first of all, i have never a stern guy so it doesn't make sense to me. i don't have the sirius radio. every time i put the an tetennan
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my car, it gets knocked off. >> you know the antenna comes up out of the car and you don't have to put the hanger on top, the clothes hanger, the aluminum foil >> they don't even have antennas anymore. >> the laugh track is lame if they are going to do one, do it >> old man shining at the cloud. >> hot profits thanks to cold pizza. details when we return ok back and remember the moment that things, for one strange time in our lives, got very quiet. some lost work and invented new ways to get by. others were busier than ever, and found strength they never knew they had.
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we sheltered with the people who matter most, sometimes finding how far apart we'd drifted. we worried over loved ones, over money, over our planet. and over take-out. and we found a voice one the noise out there had kept quiet. when the world starts spinning again, let's remember this time where none of us felt secure, and fight for a future where everyone can. because when the world seems like it's standing still... that's the perfect time for us to change it. for skin as alive as you are... don't settle for silver ♪ gold bond champion your skin
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welcome back to "fast money. rebounds are starting to rebound as diners make their way back to the dining table but they may not be coming fast enough >> restaurant sales and traffic are heading in the right direction, but still have a long way to go. september 27th restaurant same-store sales are down 13.5%.
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consumers continue to favor quick service and fast food. average customer spending is up 7.2% even as stimulus run out. and we saw up for almost every p pizza chain starting with domino's last quarter they jumped around 16%. and last quarter consumers were buying more potentially to have leftovers. pizza stocks were up 35 to 40% >> on the panel, raise your hand if you have ordered extra takeout to specifically have
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left yoenis. -- leftovers >> karen is a surprise there are so many ways to repurpose pizza. would you be on board? >> repurposing pizza my 7-year-old will only eat pizza. every parent has that kid. that's one of them if you look at the higher ticket sales, i think largely people are eating out less so when they do, they are comfortable spending more. the foot traffic is down significantly more than the sales numbers are down but as we have seen in the market, there are those folks that have been outliers here chipotle is having a monster run. and mcdonald's what drive
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throughout and takeout has meant for them # i think those companies are starting to separate themselves. >> the drive-through trade is gold mcdonald's a new high today for the stock? >> we have been talking about mcdonald's fora while. the drive-through trade is gold. this is technology play. given steven moore props i think jim cramer talked about it years ago as well one of my jobs was working at domino's >> look at you spreading that sauce on that pie. you look like a real pro there >> i don't look like anything. i am
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and i will say since that employment -- the stock is only going up i caution people domino's is not cheap. two quarters ago they had a 30% rally off earnings i would say wait and try to buy this stock off around 380 which is where it took off >> you look heavy handed with the sausage, guy on the video you were putting a lot of toppings on the pizza. >> i couldn't hear you that well >> and don't go anywhere, much more straight ahead.
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>> we continue to have a very strong balance sheet, so our dividends --
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>> michael wirth defending his dividend many are wondering if big oil dividends are in danger. many wondering that. mike >> one of the things we will be looking at in chevron, their earnings will be announcing later in the month the market has been planning about 7 1/2% higher or lower depending on dividends this is a question options traders get a lot. you can buy stocks or buy them sin theically. if you own them synthetically, you don't have them. i was looking at the january 22 options and you can back out
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depending how much the options market is implying there is a mild discount right now they are paying about $1.29 per quarter and there are five quarters. the cumulative dividends are about a dollar shy than you would otherwise be getting but should it be cut or considerably reduced i don't think it is. a bird in the hand a worth more than one in the future as the ceo was pointing out, in their case it is reasonably well covered. exxon is probably not quite as confident as far as the earnings outcome. >> is the options market, has it been accurate in the past?
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have you used it reliably? >> it is common for institutional traders to do it on dividends we do reversals and conversions where we try to capture strategy that's something you will see when you see high and unusual volume ahead of dividends. there is some predictive capacity to it, but in this case i don't think the chevron is in a great deal of threat >> professor, thank you. coming up, the odd couple, teaming up with this work omfr home brand new sneaker we will have the details when fast money returns ♪ ♪
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i can't believe that garbage is still coming in. that is so false! frustrated with your online search results? call reputation defender today to join tens of thousands who've improved their online reputation. get your free reputation report card at reputationdefender.com or call 1-877-866-8555. we are watching shares of eli lillily and regeneron after a tweet from the president moments ago. he tweeted that regeneron was
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incredible and he would make it available for all to use this is big news for some of these shareholders guaranteed purchase basically. >> it's all great news it's wonderful news. >> regeneron therapy approved for emergency use. we will continue to follow this. let's go around the horn >> dan >> through a direct listing last week, i think through its growth, i think it's going higher >> karen >> citigroup trades down on this occ fine i think it's a buy
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400 million for citigroup is really 20 cents. >> tim is on the phone >> i miss y'all. copper up big 7 1/2% i think goes higher. >> guy >> i have the best st gpofiify t of all i promise to help you find it. "mad money" starts now hey, i am cramer welcome to "mad money. just trying the make some money for my friends call me at 1800-743-cnbc when the president tweets
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