← CNBC's "Fast Money"
CNBC's "Fast Money"
Tech’s Divergence In The Second Half… And Retail’s Holiday Expectations 11/22/24
00:42:17
Two tales of Tech playing out, as software and semi stocks diverge in the second half. The names leading the rip and dip, and if the trend will continue into year end. Plus How retail will fare this holiday season. Record holiday spending expected this year, as companies up their credit card interest. How it will all shake out ahead of the holidays. Fast Money Disclaimer
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- [00:00]
Tyler Matheson
This episode is brought to you by Merrill with a dedicated Merrill Advisor.
- [00:04]
Bonowyn Eisen
You get a personalized plan for your financial goals and when plans change, Merrill's with you every step of the way.
- [00:10]
Tyler Matheson
Go to ML.combullish to learn more Merrill, a Bank of America company. What would you like the power to do?
- [00:18]
Bonowyn Eisen
Investing involves risk. Merrill Lynch, Pierce, Fenner and Smith Inc. Registered Broker Dealer Registered Investment Advisor Member.
- [00:24]
Tyler Matheson
SIPC first and foremost, the thing that powers your business is power. And when it comes to power, Ford Pro has options. Now scratch that, we've got every option. Diesel, gas, hybrid and all electric. Plus they're all connected, so you're always in the driver's seat. The power is yours. Visit FordPro.com today to learn more live from the market site at NASDAQ. On a night with a down notched yet another record close, this is fast money. And here's what's on tap tonight. A tale of two tech trades. Software stocks outperforming the once red hot semis over the last six months. Does the rally continue or is the trend about to reverse? And Thanksgiving maybe next week but we are already counting down to Christmas. We'll talk to the CEO of one of the country's biggest outlet mall operators for his read on the consumer this holiday season. Plus the DOT drives to two year highs. Starbucks quietly closes in on its best levels of the year. And on this Friday each of the traders is armed with their chart of the week.
- [01:34]
Tim Seymour
Oh my goodness.
- [01:35]
Tyler Matheson
Good evening everybody. I'm Tyler Matheson in tonight for Melissa Lee. Coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Bono and Eisen, Guy Adami and remotely Julie Beal. Welcome one and all. Good to be with you.
- [01:49]
Tim Seymour
Welcome to you Tyler.
- [01:50]
Tyler Matheson
Thank you. Good to be with each of you. Always so much fun. We start with a big divergence in two pillars of the tech trade. Software and semi stocks heading in different directions in this second half of the year. The IG V ETF up. It sounds like I give up, right? That's what it looks like. You never I give up.
- [02:09]
Tim Seymour
It's not what you do.
- [02:10]
Tyler Matheson
Up 22% since the start of July while the SM chip ETF has gotten crunched down more than 6%. Top software names making major moves higher in that time. Oracle, ServiceNow, Salesforce, Snowflake, all up double digits while big chip stocks continue to trade lower. Lam Research, AMET, Micron, Qualcomm down 10% or more. So will the second half separation in tech continue into the year end? Let's get to that. But why don't we begin with your reflections on the fact that. Here we go again, another Dow record high. The S&P, 5969. Close to 6000. Then lead me to the tech.
- [02:50]
Guy Adami
No stopping it.
- [02:52]
Tyler Matheson
There's no stopping.
- [02:52]
Guy Adami
Now, if I had told you, if I said, tyler Matheson, there's gonna be a headline this week that Russia fired ICBMs into the Ukraine, what's going to happen to the market? And you'd be. Well, if you had said it to me, I'd be like, well, the S and P is easily down 100 handles.
- [03:05]
Tyler Matheson
Yep.
- [03:05]
Guy Adami
The Vix is north of 25. Gold's up $110 year. Yields are probably significantly lower on a flight to quality. None of that happens. So I guess if nothing else, that just shows you the resilience of the broader market and passive investing being fourth, you know, first and foremost in everybody's mind. With all that said, I mean, you have to say at some point things can get a little dicey here, given all the geopolitical risks out there and all the other things we're going to talk about later in the show.
- [03:30]
Tyler Matheson
Yeah, let's. Let's move on then to the question of the. This outperformance.
- [03:34]
Tim Seymour
Yeah, the one guy didn't answer. You can say it, Tyler. No, no, wait a second.
- [03:38]
Guy Adami
Listen to how we led the show. Before we get into it, what are your thoughts on the market?
- [03:42]
Tim Seymour
Ok. He's a little defensive, Tyler. I'm not, and I'm happy to talk about this because I think we're going to maybe even talk about the underperformance of semis, although maybe this is that kind conversation right now. So it's partially because I think we've priced in so much good news that you had a day after, the day after on Nvidia. In other words, stock finally did give up a little bit.
- [04:03]
Tyler Matheson
It was down today. Right. Yeah, I didn't. Yeah, there it is.
- [04:06]
Tim Seymour
But. But as we argued even yesterday, and I think even the 3.4% move today is something that, you know, all things considered, the zoom into those numbers, the fact that I think they kind of downshifted successfully in terms of the guide, but software is moving because it is really seen as the next reverberation out. You throw a pebble in the water, guy, what happens?
- [04:25]
Guy Adami
Well, you get ripple effect.
- [04:26]
Tim Seymour
You get ripple effect. And that's really what I think is happening. But I mean, we.
- [04:30]
Tyler Matheson
Ripples go away.
- [04:31]
Tim Seymour
The ripples go away eventually. And I think at some Point. What we've seen other times is software has actually followed semis and I think that's happened again. I think software ton of upgrades this week, but we heard it from everybody from Snowflake, even Datadog who I think 6% of their R is actually an AI customer base. Yet that base tripled and in the last year that's the kind of thing you do in software. And none of these valuations make sense. And we've talked about this with Palantir. I think it was 38 times forward sales, which is absurd. But the argument here is that if you're playing AI, you're playing it through the enablers and software platforms have different ways to do it and frankly that's the way a lot of the consumers are reaching out. But more importantly, enterprise is happening right now and I think it continues.
- [05:14]
Tyler Matheson
Bonwin thoughts on the broader market hitting new highs on the Dow, the S and P within a hair of 6,000 or pick up on Tim's thinking on the semis versus software.
- [05:26]
Julie Beal
So I'm going to be defensive and offensive.
- [05:27]
Julia Boorstin
Okay.
- [05:28]
Julie Beal
I'm going to avoid the question first and then answer it second.
- [05:30]
Guy Adami
Nice.
- [05:31]
Julie Beal
So in terms of the broader market, listen, I think we're in essentially an everything rally right now going into the Nvidia print. I think a lot of us spoke about how we were a bit concerned about that. We'd like to see it perhaps trade a little flat or perhaps just be a bit more defensive in terms of posturing before going into that print. I think that kind of explains the move that we saw post earnings because it was yet another blowout quarter. I think questions about Blackwell supply and ability and back ordering and pull forward of, of ordering there, I think those, those concerns have been assuaged. And then in terms of the divergence between what we're seeing from SMH and I give up is, you know, a lot of those names, let's take Self Salesforce for example. The question was, and this is also with some of the hyperscalers, this AI related cap capex spin needs to be justified. That was the prevailing wisdom at the time. And these companies were coming under pressure because investors really didn't feel like they had an accurate answer to that question. You saw Salesforce trade off. I don't know what it was 20, 25% post earnings. And so a lot of those names had gotten beaten up coming into the print. And so that explains a bit of it. It's essentially you have like a star player like Nvidia dragging up the rest of the balance. And so you've kind of been mired in that drag because again, there's been a massive divergence between AI related Capex spin and then capex spin going forward.
- [06:49]
Tyler Matheson
Where do you put money now? Julie Beal as between the semis and the software stocks, where would you go?
- [06:57]
Julia Boorstin
Go think that software is a much better place to be. They're more profitable businesses, they have much better levels of return revenue. You know, they're less capital intensive cyclical offerings. So I'm always going to prefer all things neutral. You know, I'm going to want to prefer a software name. But I think what's interesting to me is that this dynamic that we're seeing with India and then everyone else is a little bit reminiscent of the telecom boom that we saw. I don't think that is necessarily sustainable over the much longer term. I think in the near term they can continue to be dominant but longer term should be a broadening within 10.
- [07:34]
Tyler Matheson
Is this, is there something wrong with those other stocks that haven't participated among the chips or is it just that Nvidia is doing everything right or has has this immense tailwind moving it forward?
- [07:49]
Julia Boorstin
I think that the average Chinese company does not have this mode of development that they do where the actual programming language is something that you learn and it's something that you build around. Very few semiconductor stocks, particularly if they're not analog stocks, have that. And that really is the core differentiation. It doesn't just solidify the current business. It really paves the road for the future.
- [08:10]
Tyler Matheson
All right, we've got a news alert now on an AI company that is looking to go public. Julia Boorstin has the details. Hi Julia.
- [08:19]
Tim Seymour
That's right, Tyler Corweave, an AI cloud platform is looking to go public next year aiming for a valuation of more than $35 billion is according to a Reuters report and is likely to target raising more than $3 billion from its share sale. Tyler, this looks like a sign of life for the IPO market. There's been a lot of speculation that the IPO market will open up next year and this would be a $30 billion valuation. Company in core wave looking out for that one. Back over to you.
- [08:48]
Tyler Matheson
All right, Julia, thanks very much. Major averages trying to regain their post election momentum this week and they did kind of the Dow, the S and P and Nasdaq all locking in weekly gains of more than 1 1/2 percent. The Dow also setting as we've been talking a fresh record close today. But where do they go as we enter these last few weeks of the year. Let's bring in bleakly financial CIO Peter Bokvar, also a CNBC contributor. Peter, welcome. You talk a good bit about this being a two lane kind of economy. What does that mean and what does it mean for the equity markets?
- [09:24]
Peter Bokvar
Well, we have a fast lane that includes upper income spending that's robust still helped by not just income but the wealth effect of higher home prices and stock prices. You have anything related to spending and you have anything related to government spending. In the slow lane you have the lower to middle income consumer. You have manufacturing that's in a two plus year recession. You have the pace of housing transactions and everything related to it at the slowest pace in 30 years. And you have global trade that is rather muted. So while we see the GDP number in the aggregate running call 2 1/2% ish, I think it's much more mixed.
- [10:04]
Tyler Matheson
Under the hood when you've got interest rates, the market interest rates on the ten year and others at the levels at which we find them today. Is that going to make it harder given where stocks are valued, for stocks to move higher?
- [10:21]
Peter Bokvar
It's a great question because I do think that that is the biggest challenge. We have what I believe is a bond bear market that started a few years ago after a 40 year bull market. And I think we're just still adjusting to this rather sharp rise in interest rates in a very condensed period of time. And it's not just in the US I see that Japanese 40 year bond yield closed at the highest level since 2008. This week European yields are off their highs but they have ticked higher. So I think there is this global rise in interest rates that will continue notwithstanding central bank attempts to lower short term interest rates. The most notable market thing that has happened over the last couple of months has been the sharp rise in interest rates in the face of the Fed lowering short term interest rates by 75 basis points.
- [11:07]
Tyler Matheson
Tim has a question.
- [11:08]
Tim Seymour
Yeah, hey Peter, how about notable in the dollars move and what does that do for your view? You're someone that looks around the world too. I mean there are people that have been talking about Spain is a great market, the best market, certainly best economy across Europe. But dollars moved 7 1/2% really since the since yields started moving higher and now there's probably a US dollar EU differential that's economic based upon differentials on central banks. So I'm just curious what you think either the dollar means to multinationals here dollar or where the opportunity from this dollar is for foreign Multinationals that get better and more attractive here.
- [11:41]
Peter Bokvar
Well, the dollar action is interesting because yes, it's rallying against the euro, the pound, the yen and some others, but it's weakening against the price of gold. So is the dollar really strong or is it weak or is it just the better of other fiat currencies? With your point about Europe, well, we had pretty disappointing PMIs today, both on the manufacturing and services side, on top of expectations. That then got built into the December ECB meeting where we're now pricing in about a 50% chance that the ECB is going to cut 50 basis points. The ECB now while their mandate is inflation, it's clearly shifted to the growth side, which is not their mandate, it's more of their unofficial one. But they're cutting the Fed maybe not in December, it's 5050 there and that accounts for that weakness. In addition to that, that, that economic weakness, the dollar, generally speaking, we know it's challenged, it's challenging the YEN because the BOJ won't raise interest rates in the face of persistent 2% inflation. And to your question, what it means for earnings, it's going to be a headwind for multinational earnings if this dollar stays strong as the quarter progresses. But also it's a liquidity suck if the dollar continues to rally, which the market obviously has ignored up to this point. But if it continues, I think it will get some attention.
- [13:01]
Tyler Matheson
Guy, you want to jump in? I do.
- [13:03]
Guy Adami
That's a financial term, by the way. Liquidity suck.
- [13:05]
Tyler Matheson
Liquidity.
- [13:06]
Guy Adami
Tyler was right to mention, as was Tim, 10 year yields. But Peter, two year yields have gone up lockstep almost. And if you had told me, you know, where 10 year yields would be and what's going on with the Fed, I would have said the yield curve is steepening in a major way. That's not happening at all. What are your thoughts on the yield curve?
- [13:23]
Peter Bokvar
Well, the two year, interestingly going into the September meeting when they cut 50, the December 2025 fed funds futures contract was yielding about 285. Today it's yielding close to 4%. So we've taken away the market has taken away more than 100 basis points of rate cuts because we've seen the response in the long end of the curve. We've seen the economic data sort of hang in, we've seen the inflation data hang in and I think people just got way too ahead of themselves. I do though expect a further bear steepening where the 10 year yield is most likely going back to 5% while the Fed, while not cutting as much as we thought, is still looking to cut short term interest rates. But most importantly, Jay Powell should not ignore the behavior of the bond market. When he spoke at the last FOMC meeting, he was rather dismissive of the rise in long term rates and I think that that's a mistake if he.
- [14:20]
Tyler Matheson
Continues to be I just want it before we let you go, I want to get your thoughts on commodities. I know you are bullish there long gold, silver, you like oil and gas. Why?
- [14:31]
Peter Bokvar
Yeah, we were long, we remain bullish. I think the gold story still has more legs to it. I know it had a move after the election, but central banks are not going to stop buying gold just because Trump won. Just as they were not going to stop buying if Harris won. That's not going to matter to me. $70 oil is rather cheap. The energy stocks we believe are very attractive and continue to hold them. And I particularly like also the fertilizer stocks in the ag space which have gotten very beaten up.
- [14:58]
Tyler Matheson
Throw some fertilizer on it always.
- [15:00]
Guy Adami
That's what we do every night here, Tyler. We throw a little fertilizer on things.
- [15:04]
Tyler Matheson
Yes, indeed we do. Peter, thank you very much. We appreciate it. Julie, is there a trade here that comes to mind based on what Peter said?
- [15:11]
Julia Boorstin
Yeah, I mean I think if I look at material stock broadly that place that really hasn't benefited from any of the improvement in economic conditions. If you look at earnings expectations from materials it continue to be really weak. But I think there are good opportunities with them. I think you just have to be a little bit selective on the ones that have real capacity protection run.
- [15:32]
Tyler Matheson
We talked a little bit there in that previous interview. And Tim, you mentioned earlier the $8 straight weekly gain jumping to its highest level in more than two years, closing in on parity now with the euro one to one. Tim, thoughts here?
- [15:45]
Tim Seymour
Yeah, again I think you have a dynamic which is now Peter highlighted. Those are terrible PMIs across Europe. Meanwhile we had an ESM here that was actually pretty solid. We know manufacturing is in a recession in the United States but we know that the service is part of the economy is not only the part that is the consumer but the part where there is a bit of inflation. So I think in this case the dollar strength is actually positive. Now remember we're trying to also impute upon a world where there are tariffs. There are, there is at least a policy response. Some of it is fiscal policy, some of it truly is the dynamic that could have higher tariffs being a barrier dollar positive for now. Until ultimately you get a case where this is really a drag on the US Economy. So I think there's a limit to what the dollar can do. I think the break of this level here, I think it can rise up to 110. And I would get back to those asset classes that have been phenomenally resilient in the face of a higher dollar. Because historically, this kind of a move in the dollar would have destroyed gold, it would have destroyed the price of oil. And I understand there's a little bit of an oil disruption trade to the market this week, but I love energy here. I look at the move in the XOP this week, and that was the kind of a move that tells me these are names to get back into final one.
- [16:53]
Tyler Matheson
Any reaction?
- [16:54]
Julie Beal
Yeah, I think you brought up a good point about multinational. So Tim was talking about in the interim how dollar strength is a positive. And I tend to agree. But I think when you start layering on the tariffs and what the blowback might be, the response might be from China, from Europe. As everyone digests this, I think that's something to keep an eye on. The gold trade, I tend to agree. You know, I know bitcoin is kind of getting all the headlines in terms of the move that it's had over the last couple of weeks, but I think gold still offers you upside in a much more steady, progressive, up to the right type of. Type of way.
- [17:23]
Tyler Matheson
That was 17 minutes of your content right there. I mean, golden content.
- [17:29]
Guy Adami
I mean, how long does 17 minutes take on that? What's that show you do? It takes about 40.
- [17:34]
Tyler Matheson
Yeah, yeah.
- [17:36]
Tim Seymour
Very nice.
- [17:37]
Tyler Matheson
All right, coming up, we got your bitcoin battling to break the $100,000 barrier. While the breakthrough could come and how high the cryptocurrency can run, we got that next. Plus, the retail giant Tanger Outlet Jingle bell rocking into the holiday season. The CEO Stephen Yaloff joins us for a closer look at how the consumer stacks up for the biggest shopping season of the year. Be right back.
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Tyler Matheson
Eduardo Once a destination for powder hounds, now a money making powerhouse driven by money, power and faith. Cities of Success Salt Lake City premieres December 10, 10 Eastern CNBC, SiriusXM112 all right, welcome back to Fast Money everybody. More records for bitcoin as the crypto inches ever closer to the $100,000 mark. The coin getting within $150 of that milestone today. The cryptocurrency now up more than 40% since election day. How much gas is left in the tank?
- [19:48]
Julie Beal
Bonwin I think it's equally awe inspiring and concerning. So I mean this, this as I mentioned before, this run up near $100,000 I think kind of, you know, underscores the fact that there's broad institutional adoption. The retailers are still, are still a massive supporter and the administration has come out and essentially said that they're going to be pro bitcoin along with Gensler stepping down. With that said, this has a long history of boom and bust type of trading cycle and being that it's devoid of essentially an intrinsic value, you're kind of left at the mercy of the herd mentality in terms of needing to be the first one out and not the last one out of the door. So I think that, and then you look at the, look at microstrategy, you look at the fact that NFTs and artwork and everything is kind of getting that everything rally type of boost. I think it is a little bit speculative in nature at this point.
- [20:33]
Tim Seymour
You own a couple nft, right? Guy, of course.
- [20:36]
Guy Adami
Why doesn't everybody. Tim's done an amazing job with Coinbase. So coinbase chart though. This is one you talk about getting over your skis. This is it in spades. This is a company is probably trading close to 90 times next year's numbers is now approaching the levels we saw in 2021. So I look at bitcoin, I don't understand it, but I do understand valuation and this thing. If you've enjoyed the run, I think you got to take some money off the table on Coinbase, Bitcoin ETFs, there's.
- [21:01]
Tim Seymour
Some stats out yesterday, I think they're now north of 100 billion. So there's a dynamic here. And Bono, in reference, the Gary Gensler news, we all expected that. I mean, that's just that was going to happen anyway. The reality is that more regulation in the form of the SEC being on board is really what Bitcoin wants. We talk about the Trump 2.0 is possibly being a world of less regulation and there's certainly dynamics that's helping other sectors. So I think this is about institutional adoption. I think this is clearly an asset class where Bitcoin as an argument, I think there's a lot of lessons, emphatic arguments out there for other parts of the digital space right now, but that's just, you know, I think it's a matter of time. That was part of my call on Coinbase. I still think it is that on ramp. There is no question, if you look at the rally we've had in equities, there's been a part of this. We talked about the parts that have been rallying, but the whole call it meme world, the whole extreme speculation world that comes with digital assets and some of the stocks around it has been part of the last three weeks and really since election. And I think that's something that is something to be concerned about. As Bonwin said. Having said that, I'm not going to fight this energy right now.
- [22:05]
Tyler Matheson
Yep. All right. A lot more fast to come. First and foremost, the thing that powers your business is power. And when it comes to power, Ford Pro has options. Now, scratch that, we've got every option. Diesel, gas, hybrid and all electric. Plus they're all connected, so you're always in the driver's seat. The power is yours. Visit FordPro.com today to learn more.
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- [23:04]
Tyler Matheson
All right, everybody, welcome back to Fast Money. A four pack of fast movers catching our eye today. First up you got Starbucks jumping to its highest levels in a year as the coffee chain continues its revamp under new CEO Brian Niccol. And a pair of Detroit automakers revving up Ford highest levels since the summer. GM nearly three year highs. And finally Supermicro jumping another 12% today, bringing its gains since Monday to more than 78%. Now that is its best week on record. The server maker hired a new auditor this week and said it has a plan to release its long delayed annual report. Even with the gains though, the stock is only where it was a month ago. Let's start with Starbucks. I start with Starbucks because guy brings me.
- [23:50]
Tim Seymour
He's a nice man.
- [23:51]
Tyler Matheson
He's nice.
- [23:51]
Tim Seymour
He only gets you those. But yes, well, that's how it's our guest man.
- [23:55]
Guy Adami
God, you and I can, I'll get you if you want the prize.
- [24:00]
Tyler Matheson
He's a good host man.
- [24:01]
Tim Seymour
Yeah, he's good. Well, look, Starbucks getting, getting back to the dynamic here. You've got the CEO factor where we, I think Starbucks got the boost. It actually has followed through on a couple very important initiatives. I think the expectation is, first of all, while Starbucks is a brand where operationally people feel like there's much to be improved, there's nothing broken with that brand. Okay. I mean the bottom line is, and I think that's what Nichols really pointed out. This is, this is a company that if anything, and I know it seems perverse given that they have shown more price inflation in some of their products than others. He's basically saying we're not giving the house away and we're actually not going to necessarily be promoting. So they've cut out a couple of these promotions. I think they have focused on the in store dynamics. I think they focused on where they have growth, growth. And I just feel like it now feels like there's someone running the company. For a while there we were having trouble getting economic forecasts and quarterly forecasts out of a management team that were anything close to the mark. I think that's as much of the improvement in the stock and in the multiple as the fact that Starbucks is a great global brand.
- [25:01]
Tyler Matheson
You got real, you got real management in there now, Julie. I think Tim hit it there. The customer experience is everything. And I think Starbucks lost focus on the customer experience. It got expensive. They have so many drinks and things on the menus that they, that they can't keep up and they had, they had drive ins and phone ins and walk ins and they're trying to serve them all and they weren't serving Any of them very well. Maybe Nickel is going to turn that around. What do you think?
- [25:30]
Julia Boorstin
I think investors will always appreciate when a story gets a little bit cleaner and that there's a refocusing on what made a company great and what its competitive position is. I think it's really hard when they're trying to be all things to all people at all times of the day when they clearly have a model that works best, when they focus on what they're good at, which is more towards the early part of the day. I also think the opportunity that was talked about earlier in the week of divesting or JV operations in China could be very interesting for them because I think that that really hasn't been the market that they had hoped it would be. I think there's just so much more competition than they expected. And so I think there's a lot fundamentally here that looks interesting.
- [26:07]
Tyler Matheson
Guy, you want to talk Starbucks, you want to talk the cars, what do you want to talk?
- [26:10]
Guy Adami
I'll talk Starbucks with you. I mean they reported basically the day before Halloween, Tim, so I won't boo. But I mean the operating margins came in year over year was 14.4% last year, almost 19%. North American comps were miserable. I mean it is not a failing business, but it's a struggling business. So yeah, maybe drawn on the cups and making things a little sleeker, but I think the fundamental problems that the stock was under pressure for for a year and a half have not gone away. As an analyst just came out and downgraded the stock. $75 price target. I don't know if it gets there, but this 102 levels, probably the average price target of all analysts across the street. So I think it's probably fair right here.
- [26:46]
Tyler Matheson
We're going to take a quick break. Coming up, we're going to sit down with Tangers CEO Stephen Yellow for a look inside what could be a record holiday season for retailers. The numbers and what's driving the rush right after this. Welcome back to Fast Money, everybody. Tis the season. We're counting down to Christmas. There's just a little more than a month left to get your shopping done or started. But how is the consumer stacking up for this holiday shopping season? We're joined by Tanger CEO Stephen Yaloff in the house for his take. Welcome, Stephen. Good to see you. Thank you.
- [27:16]
Bonowyn Eisen
Thanks for having me.
- [27:17]
Tyler Matheson
I'm really impressed by a 97% occupancy rate in your, in your businesses. That is really something in this day and age.
- [27:25]
Bonowyn Eisen
Well, it speaks to both the outlet category because there's a lot of retailers that want to play in the outlet space, but actually speaks to retail in general. I think retail is really hot right now. Brands are hot and the consumer is definitely resilient and they continue spending.
- [27:41]
Tyler Matheson
What are you seeing in your stores as we head into this holiday season? I assume you're optimistic as why wouldn't you be? People seem to have money, they seem to be spending money freely.
- [27:50]
Bonowyn Eisen
Well, October was great for sales. I think that momentum definitely carried into November as well. And the customer is coming in and they're buying big baskets, they're buying apparel, they're buying gifts. The gift giving started very early this year. You know, November 1st was really when Christmas decorations started coming out and Santa Claus started coming out in a lot of shopping centers where kids were lining up to get the pictures taken earlier than usual. And the reason is because Thanksgiving being as late as it is this year, there's five fewer shopping days between Black Friday and Christmas.
- [28:23]
Tyler Matheson
You know, you have in your business, I'm guessing, the stalwarts who have been in the outlet category for a long time. And then there are probably some newcomers coming in.
- [28:33]
Bonowyn Eisen
You know, a lot of the direct to consumer brands are getting into the outlet space because, well, let's take a Mac Weldon All Bird was in the outlet space for quite some time and now we're seeing brands like Sephora. These are full price brands that have never been in the space before, but see an opportunity to get in front of a customer that they may not ever see in any of their other channels.
- [28:55]
Tyler Matheson
How's the customer mix changing, if it is at all?
- [28:59]
Bonowyn Eisen
Well, you know, the customers your target change? Well, we're being very deliberate about going after a much younger consumer. The younger consumer has proven that they like to shock bricks and mortar. And we want to make sure that they know that we're there. And the best way we do that is by just how we communicate with them. Digital communication. A lot of TikTok. The big thing on TikTok is your hall. And a lot of folks like to go into the store. These kids, they buy a bunch of stuff and then they, they open it up on TikTok and show their friends the things that they bought. But more importantly, they tell them the brands that they bought, where they bought them, and the shopping center that they shopped.
- [29:37]
Guy Adami
Steven, you're coming off a great third quarter. At the beginning of the month you talked about focusing on diversifying the tenant mix and peripheral land. So speak to that yeah, so, you.
- [29:45]
Bonowyn Eisen
Know, we have a lot of opportunity to bring a customer in. Look, we're all competing to get the customer off the couch and into our shopping centers. And that power shopping experience like the one that you've had in Riverhead, I talked about that. Right. Just, you know, that that's something that, you know, a lot of our customers, our core customers really looking for, but that new customer that we're trying to get is somebody who's looking for more of an experience. And so what we're trying to do is sort of pivot from the shopping center business to the experience business. Shopping is part of that experience. But better restaurants, better food and beverage options, better things to do when they're there so we can keep the customer on site longer, get them to spend more money during that stay.
- [30:23]
Tim Seymour
Steven. So Wall street, the analyst community, I think has rewarded the operational success and the rent spreads and the occupancy that Tyler talked about. How about opportunity? I think they're also rewarding though, the opportunities outside of outlets. And you know, the balance sheet allows you to be potentially opportunistic. Talk about that where there's other growth opportunities outside the traditional outlet you're used to.
- [30:45]
Bonowyn Eisen
Sure. Well, you know, we think that are the team that we've built and our management, our leasing and our operational team is, you know, as great as we are at outlets and that's really our core business. We've learned that we can also execute in that full price space as well. We bought a new shopping center. Well, actually we bought an existing shopping center in Huntsville, Alabama that we got fourth quarter of 2023. That's now we've had a full year with that shopping center as part of our catchment. And you know, we think that that's a business that we can expand into. And like you said, our balance sheet is positioned for growth.
- [31:20]
Tyler Matheson
Congrats, Stephen. Thanks very much for being with us. Have a happy holiday season.
- [31:23]
Bonowyn Eisen
Thank you very much.
- [31:24]
Tyler Matheson
Let's knock it around a little bit here. You know, what's interesting to me is here's a company, Stephen's company, that has gone through a pandemic, a transition from to online shopping. A lot of people go online, but people still want to go out. They want to hunt, they want to find things, they want to touch things and that to me, and they want to find bargains.
- [31:48]
Julie Beal
Well, there's a couple of things you mentioned, the pandemic that were really brought to the forefront in terms of that pent up demand for experience. And he spoke to that really having it be experiential anchor tenants that are bringing in a younger demographic. And I think that younger demographic for.
- [32:02]
Tyler Matheson
A lot food and drink, food and.
- [32:03]
Julie Beal
Beverage, for example, was also overlooked and thought to not have the discretionary spin power and being able to anchor around them. You have a longer tenant. Sorry, a longer consumer. That's going to kind of grow into that business along with you.
- [32:16]
Tyler Matheson
All right, now, if you had a hold. Excuse me, a store branded credit card. You might want to check the interest rate on it. A CNBC report finding dozens of retailers hiked up APRs to record levels just before the Fed started cutting interest rates. Gabby. Ralph Rouge has the story. Gabby, welcome. Good to have you with us.
- [32:36]
I
Tyler. It's always great to be here. So over the Last year, Elise, 50 of the nation's largest retailers increase the APRs on their store branded cards. Companies like Macy's, Gap, Petco and Burlington. Now store cards have always had high interest rates. And the Fed's rate increases, of course, push those even higher. But retailers kept raising even after the Fed stopped. So between September of 2023 and September of 2024, the average APR on a retail credit card soared to 30.45% and that is 1.52 points higher than the year ago period. And this happened at a time when the prime rate didn't move up or down. So we got to call it what it is. This was just all about shoring up profits before the Fed began easing monetary policy. Now companies like Big Lots, Burlington Michaels and Petco have some of the highest rates in the industry at 35.99%. Gap and TJX are right behind at 34.9.
- [33:33]
Tyler Matheson
Gabby seems so happy about this, right? Positive energy.
- [33:40]
I
I'm exposing the corporate grease. That's what this is all about.
- [33:45]
Guy Adami
I'm not walking out of the studio with her.
- [33:47]
Tyler Matheson
And I laugh on her voice, man.
- [33:49]
Tim Seymour
Guy, remember when you had that Bonwit Teller department store when.
- [33:52]
Tyler Matheson
And Bonwit.
- [33:53]
Julie Beal
Whoa, whoa, whoa.
- [33:54]
Tim Seymour
Bond with Teller. Remember, I have nothing to do with.
- [33:56]
Julie Beal
34 and a half percent.
- [33:57]
Tyler Matheson
I'll tell you that much. Is this whistle stop on the way to 40%.
- [34:02]
I
You know, we could get there. There are no regulations really in place that are banning interest rate caps. You know, of course President elect Trump actually did say that he wants to impose a temporary 10% cap so people can kind of get their finances in line. Of course the banks will say that this will upend the financial industry. Nobody will ever survive. But I mean, even if we have like a 35, 36% cap, you're going to hear banks say that. So I do think we would have an appetite. There's bipartisan support for something like this coming in.
- [34:27]
Tyler Matheson
Does this apply to only the store? So if I get a card, often these cards are. For example, I have a Nordstrom card. It's branded with Nordstrom. Of course you do. Okay. Of course I do. It's a Nordstrom. When I'm not at the Tanger outlet, I'm in Nordstrom. Okay, all right. Yeah. But it's a Visa card.
- [34:46]
I
Yes.
- [34:46]
Tyler Matheson
So is that a different category?
- [34:48]
I
So it's a little bit similar and a little bit different. So you have some of these cards that are like the Macy's card.
- [34:54]
Tyler Matheson
Right.
- [34:55]
I
You can only use it at Macy's, but then Macy's also has an Amex that you can use outside of that. Your Nordstrom. Visa is a card that you can use outside of Nordstrom.
- [35:01]
Tyler Matheson
Yes.
- [35:02]
I
Either way, all of the rates were hiked.
- [35:04]
Tyler Matheson
Yeah, all the rates were hiked.
- [35:05]
Guy Adami
She's great to shine a light on this. I'll say this as well. I think the average rate on a credit card in the United States is 23%. It's about $1.2 trillion of credit card debt. And I think delinquency rates are now at a 13 year high. So I'm glad she did this. And that's something that nobody's talking about.
- [35:22]
Tyler Matheson
Any thoughts, follow ons here?
- [35:23]
Tim Seymour
Well, I think there's a couple of different tradable dynamics. There's. Some of this is positive for the retailers because this has been, if you look at the financing arms and historically it works until it doesn't. And I'm talking about some of the, you know, then you get into GMAC and other places. But as you think about the recovery that's gone on through the retail space and how they do control their customers, some of this is through loyalty, some of this is through points and it's worked to get customers back into the stores.
- [35:48]
Tyler Matheson
Julie, I saw you nodding your head there. I sense you're flipping through all of your credit cards right now. It's seeing which ones have the high rates.
- [35:56]
Julia Boorstin
No, I mean, I think it's a really good point.
- [35:58]
Tim Seymour
Right.
- [35:58]
Julia Boorstin
We know that we're over $1 trillion of credit card debt. These rates are being increased and none of it is really that important as long as everyone has a job. But the minute we have any kind of weakness in the employment market, all of this is going to start to look kind of wild.
- [36:13]
Tyler Matheson
Yeah. Julie. Thanks, Gabrielle. Thank you very much. Keep bringing the positive energy. Yeah, yeah, good stuff. All right, coming up, it may be a short week but it's still jam packed with earnings. That's next week. What options traders are watching as the market gears up for results. That's next. But first it's a charter palooza 1, 2, 3, 4 names that our traders eyes are firmly fixed on right after this. Welcome back to Fast Money. It is time for your chart of the week. And today we decided to ask each of the traders what chart caught their attention the most. Tim, you go first.
- [36:48]
Tim Seymour
Well, it's funny because we talked about a lot of different charts that caught my eye this week so much that it was kind of difficult and I stalled and I stalled until I finally came up with ibb. And IBB isn't a difficult one to come up with though for this week because when you think about where we've been in the pharma, in the vaccine space, but in the biotech space, the pressure from RFK Jr. On downward of what it means for these stocks, whether it actually is an existential threat or really, really just a whole lot of noise. So I think this sets up for an opportunity. And again I would look at an Amgen, I would look at a Gilead specifically especially when you look at Gilead's oncology business. This isn't just about the vaccine space and the things that are seemingly under some pressure here. It's an opportunity.
- [37:27]
Tyler Matheson
Quick reaction anyone? No, let's move on. Bono. And what did you pick?
- [37:31]
Julie Beal
Listen, we've talked about bond rate volatility, we've talked about year to date performance. I looked at high yield credit spreads and I'm really looking to make a bull case for the market going forward. You know, harken back to the days of Tina where we had no alternative but to put money to, you know, Louise. No, there is no alternative. We had no alternative but to put money into the equity market. And my argument here is that if credit spreads remain tight and continue to trend lower, yes, the risk free rate will offer you an alternative. But you'll likely see ebb and flows between risk off into Treasuries and then risk back on into equities, it'll take a widening of that credit spread before the higher levels of the cap stack Offer the risk reward that you'll need to see from that.
- [38:13]
Tyler Matheson
All right guy, you're next.
- [38:14]
Guy Adami
In early October, China put a basically threw the bazooka at their economy and their stock market. And Alibaba went from about 83 to 117Tim came on the show I think in the middle of that move when was trade 115 and said you got to sell some upside calls. David Tepper talked about buying everything not nailed down but that was short lived. But you know what, we've round trip the entire move. If you've been waiting, here's your opportunity. So the chart of the week for me is Alibaba on this pullback. We're right at a trend line. I think if you've been waiting to buy this stock, now's the time.
- [38:44]
Tyler Matheson
Tim, you're nodding.
- [38:45]
Tim Seymour
I think that's a great call. And you know guys, very kind here. I was selling upside calls probably in the 120s but I still own the position. So you know, on some level I've ridden back down the underlying. Even though I did take advant of the high volume they've got now probably 45% of that market cap in cash. I like baba.
- [39:01]
Tyler Matheson
Julie, your turn.
- [39:02]
Julia Boorstin
Yeah, I'm really interested in the move we saw in Celsius. You know, this is a company that has really strong distribution advantages in its relationship with Coke. It has 70% incremental shoppers that are in the energy drink category that weren't there before. They're called women. And I think what's been interesting is it's been clearly mismanaged up until this point. And what we're seeing is probably the potential for activist involvement. And so this week that's really rallied pretty dramatically from here.
- [39:31]
Tyler Matheson
Very interesting. I didn't, I didn't know. I looked at the ticker and I didn't know what it was. It's a drink.
- [39:36]
Guy Adami
You learn.
- [39:36]
Tyler Matheson
Come on, learn. Living, you learn. This is good stuff, right? Thoughts on fast money on Celsius? No, let's move on.
- [39:42]
Guy Adami
I'll give you some thoughts on Celsius. When I was a kid they tried to ram that down our throats. Remember that whole thing? No. Kilometers and meters.
- [39:49]
Tim Seymour
Yeah. You talk about the metrics.
- [39:51]
Guy Adami
Yeah. That whole metric systems. No, that was like a thing.
- [39:54]
Tim Seymour
I wasn't buying it, you know. Yeah, the imperial system, please. Actually that's not very.
- [39:58]
Guy Adami
You asked if I had thoughts. That's my thoughts.
- [40:00]
Tim Seymour
Okay.
- [40:00]
Tyler Matheson
All right. Coming up, we're going to zoom into another monster week of earnings. What options traders are betting on ahead of one of software stocks? Results. More fast money. Back in two minutes. Welcome back to Fast Money. A big slate of earnings out next week. There are just some of them. And options traders are betting one of these names is about to zoom higher on results. Mike co joins Us now with the action, I wonder what stock that could be, Mike?
- [40:29]
Tim Seymour
Oh boy.
- [40:30]
Julie Beal
Well, it would be Zoom. So on the heels of the big move that we saw today and ahead of those earnings, Zoom traded three times the average daily options volume today and calls outpace puts by about three to one.
- [40:42]
Guy Adami
Now.
- [40:42]
Julie Beal
Right now the options market's implying a move of about eight and a half percent. That's significantly larger than the eight quarter average. But maybe not surprising given the big pop the stock saw the last time they reported. And one of the contracts that was seeing the most opening activity were the November 29th weekly 90 strike calls. We saw over 3500 of those trade for a little over $2.30 a contract. Buyers of those calls are obviously betting that the stock can exceed that $90 strike price by the end of next week.
- [41:09]
Guy Adami
That would represent a move of at.
- [41:11]
Julie Beal
Least 8% or so to the upside.
- [41:13]
Tyler Matheson
All right, Mike, thank you very much. Let's trade that one and any of the other earnings that are coming out next week.
- [41:18]
Guy Adami
I think Mike's onto something in Zoom. I'll tell you if Carter would say this is a bearish to bullish reversal, it's been going on over the last four years or so. They're really kicking Microsoft Teams in the rear end and operating margins are on the rise. So I think Zoom can surprise some people to the upside here for sure.
- [41:34]
Tyler Matheson
Zoom is very easy to use compared with some of the others. To me, I like it.
- [41:38]
Tim Seymour
I like the call.
- [41:39]
Bonowyn Eisen
I do.
- [41:39]
Tim Seymour
Like I said, I like the fact that this company actually makes money. They, they, their numbers don't compare to where they were in the peak of COVID They're finding other ways to monetize. It's not expensive and therefore any good news on growth I think will move the stock.
- [41:53]
Tyler Matheson
Julie, any other names that you're watching for next week?
- [41:57]
Julia Boorstin
I think next week's going to be kind of interesting. On the retail side, I'm really, really curious about more understanding of where we are with the consumer. I think Nordstrom always gives a good flavor of the upper end consumer. And then you contrast that with Macy's, you get a good sense of how we're looking coming into Holiday.
- [42:12]
Tyler Matheson
Yeah, look at all those retailers coming out. Best Buy, Nordstrom, Dix, Kohl's as well as well. Bath and Body. No Bed. Bath and Body Works is Bath and Body Goes. Thoughts?
- [42:23]
Tim Seymour
Why wouldn't I?
- [42:24]
Julie Beal
Yeah, I tend to agree. I mean the retail earnings are super important, particularly with Target still looming large in the back of my head. Particularly so are we going to see this divergence of higher end or lower, higher earning, lower earning income consumer, or is that just a warning shot? The proverbial canary in the coal mine in terms of trouble that we might see, particularly talking about the interest rate and savings rate conversation that we just had. Last segment.
- [42:48]
Tyler Matheson
Any thoughts on CrowdStrike, gentlemen?
- [42:50]
Guy Adami
I think I like crowd, but I like Palo Alto more. If you want to get into it. I mean they just got a downgrade. I think the stock was on a base, basically lower left, upper right. I think a pullback in Palo Alto is the one you want to be buying here.
- [43:02]
Tyler Matheson
Thoughts?
- [43:03]
Tim Seymour
Look, if you were brave enough to step in, if you had the temerity to go in and step in and buy CrowdStrike after a fiasco, you know, on steroids. The bottom line here is this is a company that was expensive going into that. There was a reason that people were concerned about the fallout from these large enterprise customers, notably Delta Airlines, the public, you know, battle royale. But, but ultimately it gets back to the growth that they have here. And relative to some of the peers, CrowdStrike, especially the area that they're in, in cyber, I think it goes higher. A lot of people need these, need these guys and you can see it in the growth in the, in the top line.
- [43:37]
Tyler Matheson
Julie, any thought here on CrowdStrike Palo Alto, the security stocks?
- [43:40]
Julia Boorstin
Yeah, I mean the thing I love about security is that no one rips out existing security systems. They just layer more and more of them on top of each other. You really have to have a lot of technical expertise though if you're going to be a long term investor in these stocks because their level of differentiation is highly, highly technical. But I think CrowdStrike right here looks quite well positioned.
- [43:59]
Tyler Matheson
All right, let's take a quick break and come back with your final trades. Time for our final trade. Let's go around the horn. Julie, you get to go first tonight.
- [44:08]
Julia Boorstin
Thank you. I saw Azenta at a conference up to date. It's been a real train wreck, but I think the new management team has the right idea.
- [44:15]
Tyler Matheson
All right, Tim, next.
- [44:16]
Tim Seymour
Tyler, you the man. Always great having you here.
- [44:18]
Tyler Matheson
Great to be here.
- [44:20]
Tim Seymour
I think every time you're here, I probably tell you I'm bullish. Gold and GDX on that sell off has already picked up some ground off of the election and it's going higher.
- [44:27]
Tyler Matheson
All righty. Bonowyn, to use a word of one.
- [44:30]
Julie Beal
Of my colleagues, if you have the temerity, the stomachy of the Google lawsuit, I think you might regret not starting to average into a court position.
- [44:38]
Tyler Matheson
Interesting.
- [44:39]
Guy Adami
Anybody from the University of Virginia is watching Tyler be in the hall of Fame. Get him in there.
- [44:43]
Tim Seymour
Yeah, and you know he's not.
- [44:45]
Tyler Matheson
They're playing St. John's tonight. They probably lose. Alibaba, your last goal, Alibaba. There you go. Thank you everybody for watching Fast Money.
- [44:52]
Gabby Ralph Rouge
All 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 in other media. 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. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more@capella.edu.