In short
Podcast Episode Notes: CNBC's "Fast Money" – November 10, 2023
Episode Overview
- Title: Three Big Things For Markets Next Week, and Can Pfizer Find a Cure for Its Stock?
- Host: Melissa Lee
- Panelists: Tim Seymour, Karen Feinerman, Bono Eisen, Guy Adami
- Main Topics:
- Latest CPI report and its implications
- Biden's meeting with China's President Xi Jinping
- Retail earnings season kickoff
- Discussion on Pfizer and its market position
- Market reactions to recent U.S. credit rating outlook by Moody's
Key Takeaways
Economic Catalysts for the Upcoming Week
- Inflation Measures:
- CPI Report: Scheduled for release on Tuesday. Analysts are keen on its impact on market movements.
- Biden-Xi Meeting:
- Occurring at the Asia-Pacific Economic Cooperation Summit, this will be their first face-to-face meeting in a year.
- Potential positive market impacts if diplomatic relations improve, but sentiment is cautious due to previous negative outcomes after similar meetings.
- Retail Earnings:
- Major players like Walmart, Target, and Home Depot are reporting. These results may indicate consumer spending trends.
Insights on U.S. Credit Ratings
- Moody's Downgrade:
- Moody's changed the U.S. outlook from stable to negative, citing fiscal strength concerns, yet reaffirmed the AAA rating.
- U.S. Deputy Treasury Secretary expressed disagreement with Moody's view, asserting the economy's strength.
- Market Reactions:
- Historical context shows that downgrades can lead to counterintuitive market behavior, such as falling yields and a stronger dollar.
- Panelists discussed the implications of increasing government debt and political polarization impacting economic stability.
Pfizer vs. Competitors
- Current Market Position:
- Pfizer shares are at multi-year lows, contrasting sharply with Eli Lilly and Novo Nordisk, which are reaching new highs.
- Market Sentiment:
- The panel questioned whether Pfizer can recover, highlighting its struggles in maintaining growth post-COVID-19 vaccine dominance.
- Analysis of Pfizer's relative underperformance and potential future risks.
Specific Stock Discussions
- Plug Power:
- Experienced a significant drop (over 40%) after issuing a warning regarding financial stability and potential cash shortfalls.
- Uber:
- Stock has seen an upward trend, closing at its highest level in over two years, attributed to improved fundamentals and market positioning.
- Health Care Sector:
- Examining the XLV ETF, with discussions on Pfizer, Eli Lilly, and Novo Nordisk, indicating a broader trend of underperformance in healthcare despite some stocks doing well.
Final Thoughts
- The panelists offered various insights into navigating the upcoming week, emphasizing the need to watch inflation data, retail earnings, and geopolitical developments closely.
- There is an ongoing concern regarding the stability of the U.S. economy and stock performances, especially in the health care sector, with a specific focus on the futures of major pharmaceutical companies.
Quotes of Note
- Tim Seymour: "If anything comes out of the Biden-Xi meeting, a handshake and some sort of detente, the market will probably like that."
- Karen Feinerman: "Expectations for retail earnings are low, and I think that provides a good setup for a potential rally."
---
Conclusion This episode of "Fast Money" emphasizes the volatility and uncertainty in the current economic landscape, with a particular focus on inflation, geopolitical dynamics, and the performance of key stocks, especially in the healthcare sector. Panelists provided insights that will inform investor decisions in the week ahead.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:01Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast Rillian Novo Nordisk seemed to hit one new high after another. Pfizer shares are at multi-year lows. Is there more pain ahead for this name? The chart masters got some answers. And later, unplugged shares of EV battery maker Plug Power, seeing their worst day since 2014. Can the one-time standout stock get recharged or has it lost its spark? We'll dive into the options pits to find out. I'm Melissa Lee. Coming to you live from Studio B at the NASDAQ on the desk tonight. Tim Seymour, Karen Feinerman, Bono and Eisen, and Guy Adami.
0:46We start off with some breaking news out of Moody's, The ratings agency just cutting the outlook for the U.S. to negative from stable. Analysts saying downside risks to the country's fiscal strength have increased. They did, though, however, reaffirm the U.S.'s AAA rating. It's the only rating agency with that rating. U.S. Deputy Treasury Secretary Wally Ademo responding, saying, We disagree with the shift. The American economy remains strong, and Treasury securities are the world's preeminent safe and liquid asset. But it's fiscal strength. It's also the political mess in D.C. that was cited.
1:20exactly. Theoretically, yields should start moving higher again on the back of this. And you saw, obviously, a big move yesterday, backed off a little today. But this should be bearish for bonds, obviously, meaning rates go higher. We'll see if the market reacts. But this is something we've talked about for a while. The fact that they're late to the dance doesn't mean they're wrong. And I still think rates go higher, not obviously because the economy is getting weaker, it's because issuances are growing and people are demanding more to buy our debt, which makes sense. But the flip side of that coin is you have a slowing economy, which took interest rates from 5 percent to 4.5 percent.
1:54That's really the crux of this entire market argument that I think I'm struggling with right now. They specifically say in the release, just to read a couple of lines here, in the context of higher rates without effective fiscal policy measures to reduce government spending or increase revenues. They also go on to say continued political polarization within U.S. Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability. So this is a long-term trend that we are on. It's not just now. It's going to continue, as what Moody's is saying, as we are 10 days away from another government shutdown.
2:29Yeah, we never had the political circus being cited in the past. We've had political circus for a while. But again, as the EM guy here on the desk, I've seen this in other governments around the world. I've seen downgrades. I've seen that is what's cited. It's political instability. The fact that when this happened, well, when the S &P downgraded the AAA back in 2011, August, I do not remember where you were. I mean, it really was a big moment in time. It's interesting that this comes on the eve of this big summit with Xi Jinping. I mean, it really it's not great timing as the U.S. is looking to reassert itself and just point out, you know, consistent U.S.
3:05goals both around the world and in terms of a global economy. Also reminding that when that downgrade happened a year ago, U.S. yields continued to move lower, not higher. The dollar actually rallied. So there are dynamics that won't necessarily be intuitive. They may actually be counterintuitive, but everything Guy said is right. When you consider we had a bad auction this week that at least of the three was the 30, maybe not the one everyone was focused on. But there's different things this week. What does this mean for rates and yields? I think it's kind of business as usual. At least immediately, we do see a slight uptick in rates here.
3:38Yeah, I do think, though, it is sort of business as usual. This has been happening in slow motion for quite a while. It is worse than it's ever been. It used to be that the debt ceiling was just, you know, you just rubber stamp it and then move on to the next time. But obviously, in the last couple of years, that hasn't been the case back from the Obama administration. But I do think where are you going to go? What what who would hold the mantle of, you know, the flight to quality? I don't know exactly who that would be. I wonder, you know, things get really bad. Ironically, there's a flight to quality here, even though It's not as quality.
4:09Yes. Although Jamie Dimon would say the market will tell you what the rating is. Right. And so, you know, it doesn't really matter what sticker they put on it. The market will tell you. Yeah, I think Karen essentially makes a good point. Right. Which is Tina. There really is no other alternative. And I think that's why we'll continue to see rates kind of hang in where they are. With that said, they have come off about now 40, but at one point 50 basis points quite quickly. So there is some room for rate volatility there. And I'll just liken this to what we would be doing if we were looking at this country as if it were corporate.
4:39And if we were saying growing debt balance, fiscal irresponsibility, inability to kind of wrap their hands around capital discipline and capital spending. Oh, and all of this in a higher rate environment. I think we would all say, listen, we'd probably be downgrading it. And our outlook for that particular company would be less rosy than it was before all of that. With that said, it still is the U.S. It still is a preeminent flight to safety, flight to quality situation. So with all the outlook being said, I don't think there really is another place where you can park your money with the same level of confidence.
5:11And that gets to Tim's point in terms of you don't know how it will actually play out. We might see a knee-jerk reaction in terms of rates go higher. But ultimately, we could actually see. Look, shine a bright light on the U.S. and then shine a bright light on the rest of the world. I mean, what's going on in Japan is a joke. What's going on across Europe, there really is no consensus. It's not a common tax base. How can they have an ECB that's really in charge? So it's unfortunate that this is coming as we go into a political cycle, as this government does need to make some significant decisions.
5:38And they do look stalemated. It's also coming at a time while the Federal Reserve is essentially winding down. And you've got QT. You've got significantly more issuance. These are the things. And I know last week was that exciting week when yields pulled back. But of the three things that happened last week, I would remind that the one that I think drove market yields lower the most is the one that really, you know, it was a temporary reprieve. But there's going to be more longer dated debt issuance coming. And I think everybody thinks that, you know, you almost missed that shot at five percent.
6:08I think you're getting another shot. All right. Meantime, today's market action comes ahead of three big potential catalysts next week. On Tuesday, the latest read on inflation with October CPI numbers. Wednesday, President Biden, his Chinese counterpart, Xi Jinping meeting at the Asia Pacific Economic Cooperation Summit in San Francisco. It will be their first face to face meeting in a year. And of course, a kickoff to retail earnings. Walmart, Target, Home Depot and more all set to report. So we've got a lot of events. Will they help the rally? But they stop it. And then, of course, we have this outlook change on the U.S.
6:41It's interesting. I think that the Biden-Xi summit, whatever they're calling it, actually, I think it could only—well, I shouldn't say only, but I think the risk is to the upside for the market, because I think the market is pricing in. You know, the relationship with China is probably the worst it's been in 50 years. So if anything comes out of it, a handshake and, you know, some sort of detente, the market will probably like that. I don't know how long-lived that will be, because I will tell you, we have sent, I think, four or five people over there to talk over the last six to nine months. And each time in the aftermath, something negative has taken place.
7:11So we'll see. But to answer your question, that's the one thing I'm watching next week. I mean, all the headlines are there in terms of what they're going to discuss, military communication, cooperation, and that they want cooperation as opposed to being rivals. But at the same time, this also comes right after SMIC reported their earnings in China, a very weak quarter in terms of chips. That really underscores the impact that our tech curbs are having on our counterparts abroad, Tim. Look, there's very different perceptions of who is the driver of the negativity in this relationship, depending on where you sit.
7:45And if you listen to the Chinese press, they think that the U.S. has lost their way. They think that the U.S., in terms of both their—how they have been pushing the perception of China globally, their own perception of themselves. I do think—and I say this around almost every significant relationship we have in the world. The breakdown we've had in diplomacy over the last 10 years, it's not just this administration. It's not just the Trump administration. is to diminish. But the point is that even during the Cold War, our best and our brightest were focused on diplomacy. What we want to get out of this is that there is diplomacy.
8:13We want communication. The fact that the militaries could be communicating somewhat great, there could be at least cooperation on global narcotics trade. These are small victories. They will be significant. I agree with Guy. The expectation here is almost zero. But if you think we're getting some kind of an agreement on regional kind of temperance of China's influence in the South and the South Taiwanese Sea or around the world or even their relationship with Russia while Russia's in Ukraine because they want oil, forget it. Yeah, I would agree that that expectations are quite tamped down. Right.
8:44With that said, I'm not in the business of making bets on things that I have absolutely no control over and no visibility into. And that that is the definition of all of those things there. So I'm more focused on consumer earnings next week, particularly Target. I think it's kind of been in the crosshairs for a lot of us. We want to see if they're able to kind of turn things around? What does inventory management look like? And what are consumer trends starting to look like? I think if you kind of look at some of the price actions today, consumer discretionary was quite strong. And we've seen earnings that have exceeded expectations throughout the most part of the S &P 500.
9:15If there is a chip to fall, I think it's going to be in the consumer space. And so I'll be focused there. Karen? Yeah, obviously, I focus on it a lot. I think expectations are really pretty low, right? We got a lot of negative earnings, negative sentiment. And I think that they're trading at a pretty low multiple. So I think that it also depends on the outlook. If, you know, we've had a couple of companies say, well, we saw things were OK during the quarter, but now with, you know, the world being a little more upheaval, things are pulling back a little bit. I really want to hear the commentary.
9:46I do. My concern most about Target is Timu and Xi 'an. How big of an impact are they having? And I think that's probably more relevant to them than it is to Walmart. Yeah, because of the mix of truly discretionary items like clothing and goods and things like that. Yeah, we opened somewhere in the reading. Someone said bad medicine. So I think Jovi. Bon Jovi. Did you see Richie Sambora said there's a chance they actually tour again? Well, yeah, he's a big fan of the show, so he's probably sitting at home thinking about this right now. But, you know, the bad of medicine for Walmart has been that the economy is weaker and everyone's trading down.
10:22and even people that were not their core client are trading right into their wheelhouse. I continue to think Walmart can trade higher. I think it's a combination of the investments that they've made in their core business and technology in their people. They've done a lot of sprucing of those stores. And I think it will continue to be defensive here. But again, that Walmart target spread, that trade, that pair trade, I'd be long target over Walmart given how much we priced in. We know what we know what targets done wrong. They've made a lot of mistakes here. I think the share price has suffered.
10:52Yeah, that's been the bet, right? And we'll see if they get their act together. But Target's been middled, and a lot of the Target problems are self-inflicted at Target. And a lot of other things, they're falling under the auspices of what's going on with the consumer. So I hear what Tim's saying. That's probably the right bet. But I think Walmart can continue this grind. A new all-time high again today, 23 times next year, which sounds expensive. But then you think about it, historically, Walmart's actually traded higher than that. So I'm inclined to stay Walmart in earnings on the 16th. All right.
11:21Meantime, we do want to get to Eamon Javers, who's got the latest from the White House on Moody's downgrade of the outlook of the United States credit rating. He's also has a little wrap up of Secretary Janet Yellen. She's going to host China Vice Premier He Li Feng at a series of bilateral meetings this week. She did speak at a press conference following their meeting this morning. So we want to get to Eamon for all of that. Eamon. Melissa, that's right. Let's start with Treasury Secretary Janet Yellen. She did just wrap up two days of meetings with her Chinese counterpart, Chinese Vice Premier He Li Feng.
11:50in San Francisco today. She told reporters that the two countries agreed to stepped up cadence of communications, that they are committed to mutually beneficial economic interactions, and that neither country is seeking to decouple its economy from the other. But she also flagged one problem area. That's Chinese economic support, as the U.S. sees it, for the Russian military. We do see evidence that there are Chinese firms, and I'm certainly not saying with the knowledge of the Chinese government, but some Chinese private firms that may be aiding in the flow of this equipment and material to Russia.
12:35And note that Yellen left a little bit of an out there for the Chinese government, saying that, you know, they might not be aware of these activities. But nonetheless, she said the U.S. wants China to crack down on it. Overall, she said the economic sessions this week, set the stage for a more wide ranging conversation next week between President Joe Biden and Chinese leader Xi Jinping. That's also in San Francisco taking place on Wednesday on the sidelines of the Asian Pacific Economic Cooperation Summit out there. And Melissa, I'm on my way to San Francisco for that event. CNBC will have full coverage of the Biden-Xi meeting all week next week.
13:08And before I toss it back to you, I should give you this update that we just got seconds ago from the White House on that Moody's downgrade. This is a statement from the White House press secretary. I'll read you what she has to say. She says, Moody's decision to change the U.S. outlook is yet another consequence of congressional Republican extremism and dysfunction. Moody cites a number of recent actions by congressional Republicans. We also have a statement here from Deputy Secretary of Treasury Wally Adeyemo. He says, while the statement by Moody's maintains the United States AAA rating, we disagree with the shift to a negative outlook.
13:39The American economy remains strong and Treasury securities are the world's preeminent, safe and liquid assets. So some politics there from the White House pushing blame onto congressional Republicans. We'll see what they have to say about that. You can imagine they will blame the Biden administration. Melissa, back over to you. Can you go back to the actual statement? Because it sounded like she actually said that Moody cited the actions of congressional Republicans. And I'm not here to defend Republicans, but I do want to get the record straight in terms of what Moody said, because I read the press release and they did not mention Republicans or Democrats.
14:13Right. Well, here's the White House framing on that. Very good point. The White House press secretary says Moody cites a number of recent actions by congressional Republicans repeatedly taking us to the brink of a government shutdown, shutting down Congress for three chaotic weeks because they were unable to unify around a leader and holding the nation's full faith and credit hostage. So what the White House is saying is those things were Republicans fault. And that's the stuff that has Moody's concern about the U.S. creditworthiness. So therefore, it's all Republicans. That's the line from the White House.
14:46I will give her the benefit of the doubt. Perhaps she read the full report, which I have not been able to do since we've been on the air. But that certainly was not cited as a headline within the press release. Eamon, thank you, though. Safe trip to San Francisco. Eamon Jabbers. So it's interesting that it's the hijacking begins of this narrative. Isn't that just what they cited? I know. It's exactly what they cited. That kind of response is exactly what they see. So it's interesting. It's very sad. All right. Let's switch gears here. It has been a rough couple of months for the health care sector.
15:17The XLV down nearly 7 percent since August, and the chart master does not see the prognosis getting any better for the group. Carter Worth got the technical picture on this. Carter, what's your take here? You bet. Well, so we're just going to look at ratio charts, relative charts, which is to say the best way to depict performance of one thing to another, in this case, the sector, health care, to the market, the S &P. So let's jump right to it. This is a two-year chart, and it's simply a ratio, one thing divided by another, and that basically projects a relative strength line. And that bottom channel there that I've drawn, that looks arbitrary, right?
15:53You've connected two points, Carter, so what? We're just starting to breach that line, as you can see. Now let's look at the all data chart, same exact thing. So sector data goes back to 1989 as we have it now. And this is that same chart going back to 1989 with no lines, no drawings. Let's put that same trend line in. Now we have literally touched this to the penny about seven times. Let's put the arrows in to depict just that. And our thinking here is that we are going to breach. We're going to break trend for the first time since 1989. Take a look at the next chart, which then depicts what I think is coming.
16:33That's the same chart, but we are now, and we did just so slightly today, start to undercut this all data trend line for the relative strength line of health care to the S &P. Not good. And Carter, you know, within the XLV, how is Pfizer looking? I'm asking for a couple of friends. We've all talked about this one. I think I think, you know, look, I've been tempted and even at one point mid decline, tried it and cut it. You know, one of the great rules in markets is if it's in a downtrend, basically hold your finger off the buy button if you can. Now, we all make that mistake. And it's look, it's the human condition.
17:13But here's the thing. There is no reference point. The covid law is twenty six forty two. That's another eight, nine percent from here. I see no reason why it can't go down to that level. All right. Carter, thank you. Carter Braxton. Who are those friends? Charting. It rhymes with shim and Sharon. And they're sitting here tonight. Right. We jokingly say it's Tim and Karen's Pfizer. Yes, look, we're wrong a lot. And this is a name where I'm in Pfizer around$40 thinking, boy, this was a great level to defend the stock. It was a level where I thought we had priced in all of the pullback in essentially COVID vaccination dynamics.
17:53We continue to get worse data there. We've heard about a company that spent a lot of their COVID windfall into new pipeline stuff that probably won't deliver for a few years. I think you've de-risked a lot of the short term on this. The problem is there's nothing sexy in terms of EPS growth. In fact, you're kind of flatlining. That's the story. That's what's going on with the stock. I also just think on a relative value to the rest of the space, I think there's a lot of opportunity here in a world where health care is underperform. Yeah, I agree with you. Yes. Thanks, Jim. Everything Shem said, I agree with.
18:26But I think, you know, there's a couple of, you know, we talk about the Medicare, who's going to be Eliquis, which is a Pfizer product. That's, you know, very much right in the crosshairs. So there's a lot of negative sentiment around that. Of course, the COVID fall off. There's that as well. I mean, you know, also in the health care space this year, all of the oxygen, more than 100 percent of the oxygen this year is in Lilly and Novo Nordisk. And so I think to the extent that you have dollars in health care, that's where they went. They came from the Pfizer ATM. Right. Yeah. I mean, I'm still long.
19:00It's been not good. We talked about before the Vertex painkiller that's in development, the non-addictive opioid-like painkiller. It seems like a lot of the bets are on these big picture ideas, like these big concepts that's going to displace, you know, treatments all over the place. With somewhat binary outcomes, as opposed to like a Keytruda, for example, from Merck, which has 25 to 30 different indications. What's interesting about this XLV that Carter brings up, 20 percent of it is UNH, which is effectively at an all time high and Lilly, which is effectively at an all time high. Yet the XLV has been rolling over since April.
19:37So the question, I guess, is what happens if those two stocks start to give it up a little? Then you start to see a cascade in the XLV. So CBW, as usual, might be on to something here. Yeah, I tend to agree. One thing that jumped out to me in terms of shorting or selling, you know, the health care space and buying S &P is it's essentially like a leverage beta and leverage tech play. So that's one thing to keep in mind. Do you want more tech exposure and do you want less exposure to old economy? So, I mean, that's really a decision that you need to make before putting that trade off. Coming up, wheeling and dealing in the oil patch will bring you the latest on some potential high energy M &A and why OPEC output cuts could be fueling the action.
20:13And speaking of wheels, Uber hitting the gas this week on more than eight percent. We'll take a look under the hood of the stock's big move higher and whether this name should be riding shotgun in your portfolio. Stay tuned.
20:29Welcome back to Fast Money. Uber popping more than 3 % today, bringing its gains to over 8 % for the week. The stock, which reported earnings on Tuesday, is up 10 of the last 11 days and closed at its highest level in more than two years. This, of course, has Lyft had some disappointing results. Tim, lift is lags, right? It is lags. And this is, you know, let's go through a lot of tough ones for me. That's just the way the chips fell. It's okay. It's not pick on Tim night. It's a Friday. It's okay. Look, there are plenty nights that that's deserved. Maybe this is the night, and it has lagged. I think the point in the entire space in terms of transportation as a service, both of these companies are showing improvement both in trends in terms of pricing, Some of the macro around their businesses in terms of drivers and regulatory has lightened up.
21:17The reality is they have destroyed the status quo legacy transportation in major urban areas. There are no taxis in New York City anymore. There's only two places to go. I think Lyft is going to recover. I think they've had some changes in management. I think no one really trusted that C-suite in terms of some of the guidance they were giving. I think they're on the road to recovery, but it's been an underperformer. Since June of 22, Uber is up more than, I think it's up 145, 150 percent. Over that same period of time, Lyft has gone basically from$13 to$10.30. At some point, we have seen that type of divergence.
21:51It self-corrects at a certain point. We're probably close to that happening. I'm not saying you go out and sell Uber, but Lyft will catch up to a certain point. Just on valuation alone, it's not that wide a chasm, I don't think, in terms of what the stocks are reflecting. What would you prefer in this environment? Something that's more diversified with delivery services and Eats, et cetera, or something more pure play? I definitely Uber, but I want to make it on make it known on record that my initial gumption was to go with Lyft, much like the other panelists because of the pure play aspect of it.
Read the full transcript
22:23But when you have numbers like what is it, nine hundred million dollars of free cash flow and five billion dollars of cash, those are the things investors are going to look like in an uncertain macro macroeconomic environment. I believe Rideshare also was up about 30, 33 percent year over year. So those are pretty compelling things. And the last thing, which really shouldn't affect share price, but its eligibility for inclusion in the S &P likely does cause the stock to elevate for whatever reason. We've seen it with Tesla and many of the others. Karen. Yeah, I mean, I agree with everything you're saying.
22:51I also thought that the pure play was interesting. I think just the, you know, the monumental shift was the positive free cash flow. Lyft is not there. They hope to be there shortly. But an Uber is and it's just accelerating. It's not cheap, but it's not crazy expensive either, considering the trajectory they have. I wonder, though, if this is a good reflection on the economy more broadly. If Uber's gains are? Uber's revenue gains, yes. People are out. They're doing things. They're going places. They're going places. They're spending money. I think it's reflective of a normalization trend that's taken a lot longer in a lot of sectors.
23:23And it's taken a lot longer for a lot of the share prices. And I think there's still the juries out in the airlines. All right. There's a lot more Fast Monday to come. Here's what's coming up next. Rem de la creme of cannabis Red Hot Pot Stock Trulieve is burning up in November CEO Kim Rivers stops by to give us a closer look at what's toking this name higher Plus, Big Deal Energy Is a wave of M &A about the hit the oil trade? We'll tell you the tale of the takeover and what OPEC has to do with it. Next You're watching Fast Money live from the NASDAQ market site in Times Square We're back right after this.
24:10Welcome back to Fast Money. Uber popping more than 3 % today, bringing its gains to over 8 % for the week. The stock, which reported earnings on Tuesday, is up 10 of the last 11 days and closed at its highest level in more than two years. This, of course, has Lyft had some disappointing results. Tim, Lyft is lags, right? It is lagged. Let's go through a lot of tough ones for me. That's just the way the chips fell? It's okay. It's a Friday. It's okay. Look, there are plenty of nights that that's deserved. Maybe this is the night, and it has lagged. I think the point in the entire space in terms of transportation as a service, both of these companies are showing improvement both in trends in terms of pricing.
24:54Some of the macro around their businesses in terms of drivers and regulatory has lightened up. The reality is they have destroyed the status quo legacy transportation in major urban areas. There are no taxis in New York City anymore. There's only two places to go. I think Lyft is going to recover. I think they've had some changes in management. I think no one really trusted that C-suite in terms of some of the guidance they were giving. I think they're on the road to recovery, but it's been an underperformer. Since June of 22, Uber is up more than, I think it's up 145, 150 percent. Over that same period of time, Lyft has gone basically from$13 to$10.30.
25:28At some point, we have seen that type of divergence. It self-corrects at a certain point. We're probably close to that happening. I'm not saying you go out and sell Uber, but Lyft will catch up to a certain point. Just on valuation alone, it's not that wide a chasm, I don't think, in terms of what the stocks are reflecting. What would you prefer in this environment? Something that's more diversified with delivery services and Eats, et cetera, or something more pure play? I definitely Uber, but I want to make it on make it known on record that my initial gumption was to go with Lyft, much like the other panelists because of the pure play aspect of it.
26:04But when you have numbers like what is it, nine hundred million dollars of free cash flow and five billion dollars of cash, those are the things investors are going to look like in an uncertain macro macroeconomic environment. I believe Rideshare also was up about 30, 33 percent year over year. So those are pretty compelling things. And the last thing, which really shouldn't affect share price, but its eligibility for inclusion in the S &P likely does cause the stock to elevate for whatever reason. We've seen it with Tesla and many of the others. Karen. Yeah, I mean, I agree with everything you're saying.
26:32I also thought that the pure play was interesting. I think just the, you know, the monumental shift was the positive free cash flow. Lyft is not there. They hope to be there shortly. But an Uber is and it's just accelerating. It's not cheap, but it's not crazy expensive either, considering the trajectory that they have. I wonder, though, if this is a good reflection on the economy more broadly. Uber's gains are. Uber's revenue gains, yes. People are out. They're doing things. They're going places. They're going places. They're spending money. I think it's reflective of a normalization trend that's taken a lot longer in a lot of sectors.
27:04And it's taken a lot longer for a lot of the share prices. And I think there's still the juries out in the airlines. All right. There's a lot more Fast Money to come. Here's what's coming up next. Rem de la creme of cannabis Red Hot Hot Stock Trulieve is burning up in November CEO Kim Rivers stops by to give us a closer look at what's toking this name higher Plus, Big Deal Energy Is a wave of M &A about to hit the oil trade? We'll tell you the tale of the takeover and what OPEC has to do with it Next You're watching Fast Money Live from the NASDAQ Market Site in Times Square We're back right after this.
27:54Welcome back to Fast Money. Shares of Occidental Petroleum have seesawed this year, but that hasn't soured Warren Buffett on the stock. His Berkshire Hathaway has continued to buy shares of the oil major, and as of late October holds more than a quarter of the stock. Is this just the tip of the iceberg when it comes to deal-making in the space? CNBC's Brian Sullivan joins us now to break it all down. Always great to see you, Brian. I feel like we've done this before today, Melissa. Thank you. Like 11 hours ago. It's amazing. Warren Buffett owns 25 % of Occidental. Of course, he invested a ton of money in them a couple of years ago, helped them get that Anadarko deal done.
28:30He's got a preferred share as well. But here's the thing a lot of people may not know. He got a special waiver, as only Warren Buffett can do, from the energy department to buy as much as 50 percent. One half of Oxy doesn't mean he will, but he's able to do that. So, of course, listen, it doesn't take a wizard to figure out like, hey, maybe he wants to buy Occidental and take it private completely. Who knows? It's a 53 billion dollar market cap company. There you go. Twenty two hundred and twenty four million shares. It's four percent of Berkshire Hathaway. But here's the thing, Melissa, that a lot of people either don't know or sort of gets lost in the accidental haze.
29:10Warren Buffett is also the single largest active shareholder of Chevron. Yeah, you got State Street and BlackRock. They're passive investors through ETFs. Berkshire Hathaway is the third largest institutional shareholder in Chevron as well. So he's making some big investments in oil long term. Obviously, the Exxon Pioneer deal, Chevron Hess deal. But keep in mind, those were sort of special deals, right, guys? Pioneer run by Scott Sheffield. He was in his 70s. He'd retired once already. John Hess, his kids didn't want to run the business. So those might have been special situations. I know you guys have talked a lot about does a Devin, are there sort of these mid-market deals, Melissa, that kind of pop up?
29:55All I know is this. If you believe that we're not going to be using oil in the next 10 years or so, do you buy companies because you want to wind down the operations or do you think those estimates are wrong and you invest for the long term? I would argue that the longest term investor of all, Mr. Warren Buffett, is investing for the long term future and profitability of some of these oil companies, like it or not. Do you know, Brian, when Warren got that waiver? Yeah, it was earlier this year. Earlier this year. Okay, So it's fairly recent as he was accumulating shares. Do you know by any chance how much dry powder Warren has?
30:32Because he's got a lot. He's got a sizable amount. Guy Adami probably talks about this at the dinner table. What's Berkshire Hathaway's cash pile? They've been accumulating. I think they have their largest cash position they've had. I think so, too. Maybe in terms of absolute dollars in the history of the company. So, yeah. And think about the 8 % or 9 % that they're making off the preferred stock on Occidental. Occidental's been buying some of that back. They don't like it out there. I mean, I'm sure Occidental and Vicky Holub would like to have that all back, right? They got what they needed from Warren Buffett.
30:59They don't want to pay that special dividend as well. But he's well over$100 billion in cash. The reality is most of these oil and gas companies aren't that big in terms of market cap because they tend to have a lot of debt as well, kind of like the auto companies, right? Their market caps sort of belie their size. But I think there's no way around it. Melissa, you talk about the future deals. I'm not going to report this, but like we talked about on Squawk this morning, if you don't think there are more deals out there, I think you'd be silly. And I think that the European majors, the ones that are under the most scrutiny and pressure from their boards and the European regulators, the Shells, the BPs, the Totals, the Ennies of Italy, I will bet you those are going to be the next ones that we start to hear about because they're going to have to do something.
31:44Maybe it's like Shell. They're moving their headquarters out of the unfriendly Netherlands to the UK. And some have speculated ultimately Shell becomes a United States headquartered company. And you're saying that it's so these are major companies in Europe, integrates in Europe. And you're thinking they merge with each other. It's not that a Shell, according to what you've heard in the oil patch, is going to buy a mid-tier company. It's that a Shell and a you mentioned Shell and BP this morning. Yeah, I want to be clear. I'm not saying that I'm hearing that. I'm not reporting that. I'm simply saying there is chatter, sort of just chatter in the industry about what these large, you know, after we got the Exxon and the Chevron deals.
32:24OK, everyone says, what's next? You look to Europe. Let's be clear. They're under a lot of pressure from their boards. There are a lot of pressure from the regulators, which are whatever we've got here. They've got a much stricter regime over there. And look at Shell. Shell replaced its CEO guys. The new guy, he's younger. He has said, OK, we're going to do energy projects where they are profitable. We're not just going to do energy projects, wind that are outside our core because regulators tell us to. We are going to do the ones that make financial sense. BP was almost saying we're going to get out of oil and gas completely.
32:55That CEO, Bernard Looney, he's out. We'll see what the new leadership of BP does. But when you look at a shell, Wiles Sohwan, the CEO, he has made it very clear. He's 45. He's aggressive. He has said we are going to make money. Otherwise, we sort of don't, and I'm summarizing, don't have a purpose as a company. And if you're a BP and you're sitting out there and you've kind of been going in one direction, you know, I think there's been this big turn, especially with the rise in rates. A lot of these other types of energy projects have suddenly become non-economic. All right, Brian, thanks so much for joining us.
33:30We will see you tonight on Last Call, 7 p.m. Eastern Time, right here on CNBC. Just quickly, we've talked about the deal making before. Brian makes a good point in terms of special situations for the deals that we've seen recently. But still, there's a lot of chatter about deals that are yet to happen. Well, and some of the names like Devin are names that are often bandied about. I do think that there is some question for me as someone that's really loved the way the industry has gotten lean and mean and paid down debt and become cash flow accretive. Seeing deals happen, you know, you wonder. But again, I think that Chevron deal was great for Chevron.
34:05So the Oxy thing, that 50 percent, was that a waiver from the government or from Oxy? From the government, I believe. Uh-huh. And so he would need additional approval. Well, you always need approval to buy the whole company. Right. So the 50 percent. OK. Interesting. It seems like very much, you know, he's an elephant hunter. Right. Seems very elephant-esque. He's got the money. But the elephant's been sitting right. He goes to McDonald's and it's announced the stock was up$20. He's been in Oxy for two years. It's been$62. The entire doesn't move. Your analogy was going to be if you go to McDonald's, you order French fries.
34:41Why wouldn't you eat all of them at the same time? Why would you only eat one fry at a time, which is the equivalent of what he's doing in terms of buying percentages, percentage, you know, adding up to potentially the big trade. But eat the whole thing of fries. And he may end up he may end up eating the whole thing. Right. I mean, I wouldn't bet against Warren Buffett strategically doing things the right way. All right. Coming up, we're rolling into the cannabis trade. Truly blazes higher after its report this week, adding to an already smoking hot month for the stock. CEO Kim Rivers joins us next to lay out what to expect out of the cannabis sector and how green this group can get.
35:15Don't go anywhere. Fast Money is back in two.
35:22Welcome back to Fast Money. Stocks closing out a big week of gains in emphatic fashion. The Dow up more than a percent. The S &P up more than 1.5 percent, and the Nasdaq soaring 2 percent higher for its best day since May, all three ending at their highest levels since September. Plus, Tesla shares bouncing at the end of a tough week after billionaire investor Ron Barron spoke positively about CEO Elon Musk this morning on Swapbox. The bounce coming even as China's Huawei announced its own electric sedan, which it says will rival Tesla's Model S. Moving on, it's been smoking hot month for Trulieve.
35:55shares of the cannabis company up another 8 % today, bringing its November gains to 20%, truly posting an hour-than-expected third-quarter loss and beating the street on cash flow targets. Joining us to discuss all of this is Trulieve CEO Kim Rivers. Kim, great for, thank you so much for joining us. It's great to see you. In terms of, we had cannabis on the ballot in Ohio. It passed. I'm wondering what that means for you as a major Florida player, if it does help the industry overall. Absolutely. Anytime that we have overwhelming passage, right? 58 % in Ohio was great. We actually are in Ohio as well.
36:28So it's good to add another potential adult use state on the map for us. But of course, Florida is the big story. I think the biggest catalyst for the industry, that market poised to move to a$6 billion market if, again, adult use is on the ballot successfully in November. What are your plans for your financials, for your balance sheet? You've been buying back debts to relieve some of the debt burden. Are you planning to use some more of your free cash flow to do that? Because you still have outstanding debt, of course. Yeah, I mean, really, you know, we had debt that was coming due next year and decided to retire some of that as well as to proactively take off the table some of our 2026 notes at a discount.
37:04And so we saved about$20 million in interest through maturity, thought it was the right thing to do. Look, we're going to satisfy our obligations as we should if we're generating cash. It's great to see our initiatives come through the balance sheet. We're going to continue to focus on that, but not lose sight also of investments for growth. As I just mentioned, major catalysts ahead, not only, of course, in Florida, but I think Pennsylvania is setting up nicely for a potential adult use move. We've got additional growth in Georgia, Ohio, I just mentioned. So lots of great markets to invest ahead of.
37:36And then again, as we continue to look forward to a more regular integrated commerce environment as things progress on the national front as well. Hey, Kim, it's Tim. So I wanted to talk to you about what you think the drivers are for the stock. And full disclosure, I'm long Kim's company. I'm long a handful of names in my cannabis ETF. But investors are struggling and they have struggled, I think, for a couple of years. Let's leave D.C. out of this company specific, whether it is balance sheet and kind of cash flow dynamics or whether it's truly margins. You know, you actually I think the forecast coming out of your numbers is your margins are getting better.
38:06You're going to be drawing down some inventory that's lower cost, some efficient production. Your margins are going higher. I'm just trying to wonder and trying to understand what you think is really the better driver for how people should be looking at your company? Should it be efficiency or should it really be about you're one of the biggest companies in the space? You've shown that you've got a balance sheet to not only be proactive and opportunistic, but, you know, really to push people around at some point. Yeah, I mean, thanks, Tim. I mean, listen, I think that there's we're a fundamentals first company.
38:37You know, we had a very inquisitive period and we had a lot of integration to do. Of course, there's been normalization among consumer behavior coming out of COVID. And again, our team last year really doubled down to focus on getting the business correctly postured by the end of this year. And I think folks are finally seeing that come through the numbers, right? I mean, and it's great to see kudos to the team. We gained efficiencies. We were focused again on winding down inventory, generating cash, but doing so in a responsible and productive way. And you saw that come through our margins. So I think it's really fundamentals, execution, execution, execution is always going to win over the long term.
39:13We're focused on that. We've got incredible efficiencies coming out of our 750 ,000 square foot facility in Florida. We have 130 percent in terms of our productivity in our stores vis-a-vis the average in the state. So the setup as it relates to continued growth and continued, again, fundamental improvement is there. And I think investors are seeing that. They're excited about it. And again, taking that debt off the table so that our balance sheet is more attractive and we have more optionality for the future, I think, gives folks confidence as well. Kim, thanks for joining us. Kim Rivers, truly.
39:47Normalization, by the way, people are consuming less than they had been during COVID when there was more time to do so. Yeah, I think a lot of headwinds, both from inflation and from tough comps are out of the way. I just say, you know, the last week we've had earnings across the big multistate operator space. And frankly, sequential growth has been really interesting. Terrace had great numbers. Truly had great numbers. GTI, great numbers. Stocks struggle from the infrastructure of the space. There's not a lot of money coming in. Coming up, plug power warning. it might get its plug pulled within a year.
40:14That is options traders surrounding today's 40 % drop in the stock. We will outline the action next and later in honor of Veterans Day this weekend. The CEO of Team Rubicon will join us to discuss how his time in the service and time in business helps direct his organization's massive humanitarian relief programs. Fast Money's back in moments.
40:38Welcome back to Fast Money. A couple of stocks making big post earnings moves today. Trade deaths sinking nearly 17 percent on weak guidance, while hydrogen producer Plug Power plummeted over 40 percent, its biggest drop since 2014. The company issuing a going concern warning. That's not good. Saying it could struggle to stay afloat if it doesn't raise more cash. And that move and plug power had options traders piling in. But what direction? Mike's got the action, Mike. Yeah, you can guess based on the comments you just made. When you start talking about going concern, concerns, options traders get concerned.
41:12It was one of the busiest single stock options today. The top three contracts, all puts in the busiest of those were the January two and a half strike puts over 39000 of those things traded for about 17 cents a contract. That's about 5 % of the current stock price. Buyers of those puts are betting that the end may be near. Wow. Karen, you've been taking a look at the debt side of things a little bit. Yes. It's interesting that Citadel owns a very large chunk of those converts. I mean, it's probably in their interest to have the equity go down further. Right. Wow. Interesting. Yes. All right. Mike, thanks.
41:49Mike Coe. Coming up, we are honoring our veterans. We will talk with Team Rubicon CEO Art De La Cruz about his veteran-led organization and how they are serving communities worldwide. Stay tuned.
42:09Welcome back to Fast Money. Today we are spotlighting our veterans. Team Rubicon is a veteran-led organization that helps communities before, during, and after natural disasters and crises. Let's welcome Team Rubicon CEO Art De La Cruz. Art, great to have you with us. Art Kahneman Thanks for having me, Melissa. Beth Dombkowski Before we get into Team Rubicon, I want to hear your story because you come from the Navy. You taught, I mean, it's an amazing career that you've had in the Navy. Art Kahneman Yeah, I felt incredibly lucky. And over the course of 22 years, I was able to be part of carrier aviation for the Navy, you know, made a bunch of deployments, six actually, and met incredible people, had incredible responsibilities.
42:49And it, you know, now is paying off because all of those experiences and things I did have applicability to the world around me now. Six deployments. Thank you for your service, Art. And your next phase of service to our country is their team Rubicon. You founded this in the aftermath of Haiti, of the earthquake there. Tell us how much you have grown. It's an amazing story of how many gray shirts you had then and how many you have now? Yeah, I actually wasn't one of the founders, but Jake Wood, who was a former Marine sniper, founded Team Rubicon. And in 2010, it was eight people. And now we have over 160 ,000 volunteers, of which the majority are military veterans, but we also include civilians, first responders, you know, from all walks of life.
43:37So the growth has been tremendous, but it's not as big as we want it to be because frankly, disasters are outpacing the ability to keep up. There is more that needs to be done. Yeah, Art, and you have to triage that. But there are people watching that say, you know what, I'd love to be able to help. I have no idea what I'm good at. Can I pick up a shovel? It can be logistical support. How can people get involved with Team Rubicon? Yeah, I like to say everybody has a role. It's our job as an organization to find how people across the country can contribute to help their neighbors on their worst day.
44:10And you can be working remote or you can be at Team Rubicon. And if you go to TeamRubiconUSA.org, you can sign up or certainly support us with donations. Artists, Tim, thanks for everything you're doing. What's been the greatest victory here? Is it psychological? Is it emotional? Obviously, physically getting in there and helping. But for your team and the communities you've been serving. Yeah, I think victory is multi-pronged, just like every win, there's these incredible outcomes that happens. The first is that we help people who really need it. There are communities across the country where devastation overwhelms their ability to respond.
44:46And we have volunteers who will travel across the country to help people on their worst day. You know, the second line of victory is for the people who put on our gray shirt or for that matter, people who volunteer across the country, because the reality is by volunteering, you're paying yourself, you know, you're building your own resilience, you're connecting with a community. And for military veterans in particular, they re-identify with a community, they find a new found, re-established identity, and they certainly get to rekindle that purpose as they go out into these communities and help.
45:21Your big operation currently is happening in Taylor County, Florida, helping the victims in the aftermath of Hurricane Idalia. Can you tell us about how things are going there? Yeah, you know, they continue to recover. You know, the devastation from a hurricane lasts well beyond, you know, the news cycle. And we've had volunteers there since it made landfall. We're continuing to help people stabilize their homes, removing debris and helping them to move forward in their recovery. And if we can do that quickly and if we can continue to have that effort, it helps each of these communities reestablish the normalness normalcy, you know, that allows children to go to schools, business to stand back up, and people to go back to safe homes.
46:03There's been a focus recently in corporate America, a renewed focus perhaps, hiring veterans. There's a front page article of the Wall Street Journal saying corporate America wants to hire drill sergeants. And I'm wondering, Art, from your standpoint, if you are seeing that, if your veterans are seeing that, if people are truly appreciating all the skills, the discipline, everything that you've learned in the military. Yeah, I hope they do. You know, Frankly, I think if you wore the uniform of our nation, you graduated from a unique college. You just had courses in discipline, in taking care of people, in leadership, in decision-making.
46:39And all of that is really valuable in any environment, in uniform and out of uniform. And I think I was really excited to see that article because I think that recognition now is beginning to take away that stereotype that a veteran is someone who is injured in war and has these, you know, scars that they carry with them. The reality is they bring incredible gifts from their experience and training. Art, pleasure to speak with you. Thank you. Thank you for your service. Thank you for what you are doing now. And thank you to Team Rubicon. Well, thank you for having us. Art De La Cruz, up next, Final Trades.
47:25time for the final trade tim the first mega cap tech stock cisco reports next week you stay longer i am into that number harry yeah huge run but i'm still on some more nvidia upside calls bono in speaking of mega cap tech stocks microsoft guy we all know vets if you know Send him or her text tomorrow thanking them. GDX, Melms. Thank you for watching Fast Money. Thank you to all the vets out there for your service. Mad Money with Jim Cramer starts right now.
47:59All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBC Universal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.
48:33To view the full Fast Money Disclaimer, please visit cnbc.com forward slash Fast Money Disclaimer.
From the publisher
The latest CPI report, a meeting between China’s President and Joe Biden, and the kick-off of retail earnings season. There are plenty of potential catalysts for markets next week, but which way will they send stocks? We’re digging in on the week ahead. Plus, Eli Lilly and Novo Nordisk might seemingly be hitting one new high after another, but why is Pfizer getting left in the dust? The Chart Master is here with his thoughts on where the drug giant is going next.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.