5,000 jamie dimon may be changing his tune first, jpmorgan and citi reporting Solid Earnings but investors were pushing the sell button all day long, citi ending down 3. 5 . Given the quality of the earnings from citi and jpmorgan and the reaction we saw in their stocks, is earnings season going to shape up to be a sell the news event with stocks at record highs . Karen . I agree, both earnings were very impressive on a lot of fronts if you really wanted to you could find things to pick out, as, all right, maybe not the best the only thing wrong with those earnings is both stocks ran up 8 or so before earnings is this Market Pricing in too much you kind of need to be worried i have positions like an alphabet, like a facebook, that have come back a lot at new highs now. And so i gotta think that pretty good earnings are priced in, i gotta think about that how do we hedge against earnings, even if theyre good exactly, the earnings were good dominos pizza, the earnings were good, that stock also sold off. Its not just the financials here the financials were not just good, you would put them in the great category i look across the board at what jpmorgan and citi came out with, long growth. Yes, there were areas, but we knew the areas that were going to be slow because the bond market and low volatility. Thats why theyre revenue numbers were great, their earnings numbers were great. Solid numbers all the way. You said they were down almost all day. That wasnt 100 true. They were up like citi hit new highs, it hit 76 before this pullback it felt to me like people said, you know what, im going to take a deep breath and take some off the table. Thats what it felt like today, people taking a little bit of profits and saying im going to out for a little while that creates opportunity in tells me of citi, citi made a 52week high. All the metrics they talked about i thought were not great but very good, were splitting hairs here what concerned folks in citi, and maybe karen can push back on this, nonconforming loans are up to 2. 26 that means people not paying their loans back as quickly as a year ago when the number was 1. 85 . Thats a number that concerns people citi said book value, they being citi, book value in the stock market is effectively 79. I still think citi doesnt deserve to be at a discount to book i dont think it deserves to be where jpmorgan is. It deserves to be somewhere between the two, which puts you in the 85 or so dollar stock tangible book value is lower, though yes, it is. Both metrics are definitely lower than jpmorgan for sure you guys have been all over this trade citi group is trading 66 about six weeks ago, it traded 76 this morning the reversal makes sense when you consider a lot of potential uncertainty, as far as regulations, as far as tax thats going to be the thing that drives a lot of these bank stocks in the months to come one point, weve been talking about the rotation in the financial stocks over the last few months this has happened since a lot of the f. A. N. G. Stocks did top out in late july, early august, that sort of thing. If you see money start to come out of bank stocks, energy possibly also a bit in the last couple of months, now that facebook is back at its highs, google is at its highs, amazon, all three of those stocks topped out on their earnings. Lets see where that money comes back to. If those stocks can make new highs and drag the market up with it. Because listen, weve seen a lot of rotations, more cyclical names, industrials, that sort of stuff. To me, i think earnings season will probably be an opportunity to take a breather you asked that question out of the gate, what do you do in an environment where you think we can consolidate recent gains you can sell calls against stocks that you own, take in premium, that sort of thing, even in a lowball environment. You have to ask the question, yesterdays show, you werent here yesterday i missed a eed you, i thoughu you guys we started off with these all american stocks at record highs right now. So these stocks are record highs right now. Are these all candidates for a big pullback even if the earnings are good in this environment . Boeing, mcdonalds, caterpillar, walmart. Honeywell, im sure you mentioned that as well clearly they would based on what weve seen. If in fact the s p is on the verge of something, which maybe karen was alluding to. I think they are candidates. I will say this. People knock those stocks. All the stocks you mentioned, on valuation now for quite some time and thats been a fools errand, quite frankly. Are they candidates . Yes, theyve been candidates before and it hasnt panned out. Im not certain the s p is in for anything again, down 4 1 2, 5 handles, still within the whisper of an alltime high. The caution signs are not there quite yet. You know, and i think if youre looking for anywhere where weve seen more rotation towards, i would look to tech, i would look to the semis. We had a lot of paper today in applied materials, which plays right into the semi space. Intel has been very active micron had this huge runup even with the fact that micron floated up the huge secondary at 41, the stock is hanging in there. I mean, its staggering to me that its traded as well as it has. You get value, you get a great balance sheet, and youre getting growth thats a great combination one more thing, underlying this rally in the last couple of weeks, is a positive momentum on tax. That might be stalling, or worse than stalling, maybe heading the other way. That spooks me a little bit. I was more optimistic ten days ago than i am now. Will you take on some more protection in your portfolio yes it feels to me, the way youre talking, something has changed. Yes ive got to think, all right, how can i hedge, sell some calls, you can buy some puts or you can buy s p protection, which i think is cheap but you wouldnt sell your positions at this point, or trim the only one i did trim was gm ill get to gm a little bit later. Despite the selling in jpmorgan and citi group, our next guest is here we want to buy this dip in these bank stocks. Ill give you two reasons why. Number one, rates. Particularly the twoyear yield. Things were very sensitive to what the short end is doing. I brought along one chart here we overlaid the bank etf with the u. S. Twoyear. This is basically the same chart over the last 18 months. Twoyear yields hit new highs today. Thats a nineyear high. We think ultimately thats good for bank stocks, you buy this pullback secondly, when we look at momentum, last week you had about 80 of the bank sector make a 20day high historically when we get a surge in new highs, thats consistent with forward returns over the next three, six, 12 months again, two yields up, momentum under the surface, we think you buy this dip ill give you two stocks here. The first of which, jpmorgan, remember, jpmorgan was a 50 stock 18 months ago. It was 96 this morning we think theres short term risk here to 93 but ultimately higher, 110, 113 is our target. And then lastly, lets go to a regional this is fitb, doubled over the last 18 months sideways modifist of the year, starting to break 27, 28 use any weakness here to your favor. Theres 34 analysts that covered this stock theres only three bisuys on it. Im not the keeper of the leaderboard, guys. Does chris come over hes in the mt. Rushmore. Mt. Rushmore gets him a seat at the desk. Thank you, arielle, for bringing the chair in whos up there on rushmore, all those guys chris merrone, rich ross the list is long its a big edifice. Citi was the best performing bank stock in 2017 what did you think of the damage done today its a sell the news type of event. Its october 15th, its hard to fight this the next eight to 12 weeks. Remember, when tenyear yields where at 201 a month ago, citi group never went down. This stock has been defying the message of the market all year thats a positive. Ultimately the pullback in citi, jpmorgan, bank of america, use it to your advantage chris, ill play devils advocate sure. Dont we like that game on this show . Pete said earlier, citi made it for 52week, 76 and change, closed on the lows, traded i think north of 40 million shares typically trades 14 million shares you have an outside reversal date, perhaps. Does that give you any concern if the space was more crowded, i would typically say yes. I have a hard time saying banks are overwhelmingly overowned here banks have fewer buys than retail, fewer buys than energy that doesnt make a lot of sense to us. The sell side is ultimately on the wrong side of this and you would want to use days like today to get ahead of that i like that you use the twoyear as the underlying comparison versus the tenyear spread which a lot of people use as a proxy i like that you picked that. But why did you pick that . We talking f. A. N. G. Stocks with our clients the sense or anxiety that we hear is how can you own these things in an environment where the curve is flattening . Actually, its not so much the shape of the curve its how the curve is doing what its doing and the curve is flattening right now because the short end is going higher. Twoyear yield is going higher thats far more important for bank stocks, the same setup what we saw from 1994 to 98. You have to go back 20 years to find a multiyear period where these things worked. Dont let a bad day or a bad week or a bad month change the call use it to your advantage im still thinking about the first comment you made, we dont want to fight that in the next few weeks. What is that based on, season seasonality, it doesnt matter what the stock market has done prior . I would think in the last quarter of the year, people have made their year and they dont want to risk, given some of the potential land mines out there believe it or not, the stronger the yea historically, the stronger these eight weeks or if anything, the market has gotten broader homebuilders who havent been with us for five years, theyre with us. Semis continue to grind higher its hard for me to say this market has narrowed so dramatically all right chris, thank you thank you chris merrone coming up, one of our traders is bargain hunting well give you the name. General motors hitting a roadblock after shutting down one of its plants in detroit it could be good news for another auto stock and media mayhem on the street fears of cord cutting and a nasty dispute between viacom and charter sending shock waves through the space. What it could mean for the future of tv honking beeping were on to you, diabetes. Times up, insufficient prenatal care. And administrative paperwork, your days of drowning people are numbered. Same goes for you, budget overruns. And rising costs, wipe that smile off your face. Were coming for you too. At optum, were partnering across the Health System to tackle its biggest challenges. At optum, were partnering across the Health System when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise welcome back to fast money. A market flash on Spark Therapeutics meg terrell is in the newsroom with more. Sounds a decisive vote reporter pretty decisive, 160 in favor of this experimental therapy from Spark Therapeutics, the stock had already run up quite a bit, it was expected to be a positive panel. A sparks drug treats a rare inherited form of blindness. There were a lot of patient testimonies here in front of the fda today, talking about how much this therapy has changed their life in terms of bringing back their sight it doesnt make their sight perfect but it is widely expected to get approved by the fda. That decision is expected by january. The next question will be the price, millenniuel, people are g as high as 1 million. It is a rare disease 1 million for a course of treatment but it will cure the blindness. Reporter it will cure it significantly and its expected it would only have to be one time thank you, medical terrell. Wow wow thats a question for an ethics class, doesnt sound like a product you would actually choose this gets to a whole other question, when we talk about drug pricing in general. What is that worth, what is that incremental quality of life worth in dollar amounts . Especially to the insurers and the sample side of, has this been something that anybody would ever look into from an acquisitions standpoint . Its a small market cap company. Is this drug begin enough for somebody to actually want to look at spark and say, we need to followed them in with the therapeutic side of our business right its an interesting thought this is certainly an absolutely unbelievable thing for those suffering from it. But if its a small sample set, how big is this actually valued at our move of the day, retail etf xrt is on track for its worst week since january big losers here, rite aid, jp penny, all getting crushed today. Will it get worse before it gets better, karen . I was trying to figure out what exactly happened today. Im not quite sure there was jjill, thats a tiny company. Amazon traded okay, walmart traded okay. I dont know if there was a nike flash sale, people were concerned about that im not sure what it was we talked at the top of the show about some sectors having too much priced in already this certainly isnt one of them, i think. I mean, who knows . But if i had to pick something, you know, target actually looks interesting to me. Foot locker is so cheap but ive been burned, i cant pull the trigger there, but god, is it cheap, i must not be alone, people say i cant own a lot of retail right now walmart still managed to trade higher again despite the carnage in the retail space. Talk about stocks setting up with a huge run. Their earnings calendar is a little bit shifted so its later in the season. But are you concerned . Goldman sachs actually pulled off conviction buy on walmart today. Who can blame Goldman Sachs . This run has been absolutely spectacular. The buybacks was a huge number as well. Are they competing my answer would be yes, i think theyre doing a great job. The debt acquisition was one piece. Theyve been competing online and got more aggressive and efficient. Target is on their way to doing the same thing best buy is doing the same thing. Home depot is doing a great job as well. Home depot, their online sales were up 23 last quarter those that are competing and winning online are beating amazon at their own game theres not very many on that list we had a whole conversation whats today, thursday, right . Tuesday, we talked about, we said when is the west dbest day plant a tree is 20 years ago, the second best day is today what do you want to do with walmart, let it play dead . At the end of the day we said, target, if you like walmart at current valuations, all of a sudden, magically, now they have some relationship with the google, who is now called alphabet, that stock closed above 60 for the first time in quite some time. If you like walmart at their valuation, in my opinion you have to like target as their discounted valuation pete and i did the same thing at the same time. Still ahead, General Motors and tesla both dealing with some car trouble today. Morgan stanleys adam jonas says dont pump the brakes just yet im melissa lee, youre watching fast money on cnbc, first in money worldwide. Meantime heres what else is coming up on fast. Media stocks are getting crushed again, a top analyst says the pain is just starting for one giant in particular. Hell be here to explain bitcoin is going bonkers, hitting a new record high today. And it may have just gotten a lte y wt rsement. Wel llouhathats about when fast money returns. Gm will temporarily close a factory in detroit lets get to phil lebeau, hi, phil reporter melissa, weve talked for some time about car sales, not Overall Vehicle sales but car sales and how theyve slowed down dramatically this year General Motors has made its decision, its hamtrannic plant plant will be having permanent layoffs of 200 or fewer workers as they bring down production rates at that plant, at the same time theyll be idling the plant for the final five weeks of the year this is a plant that makes cars, the impala, the volt, the ct6 car sales are down how far are they down . This year General Motors car sales down 19 the industry overall is down 11 . Bottom line is this. Very few people are buying these. Theyre moving into crossovers, suvs, pickup trucks. Right now for General Motors, cars alone make up 24. 7 of its total sales. We should also note that as you take a look at shares of General Motors, this is a stock that has moved up dramatically. I know youll be talking to adam jonas shortly about what it might do with electric vehicles and autonomous drive vehicles. Melissa, i want to quickly transition into tesla, there was some news late in the day about tesla, announced the recall of 11,000 model x suvs. This is to repair a cable that is broken in the rear seat there have been no injuries associated with this its a very small recall relative to other release we see in this industry but again, 11,000 of these model x suvs have been recalled worldwide. Tesla believes that they can repair most of these vehicles with a mobile unit actually going out and working on these rear seats melissa . Thats a vast percentage of the model xs produced tesla delivered 8,000 something . Reporter i think so, youre correct about that in terms of its overall production of model x, that is not a huge percentage of it. Okay. Reporter its worth noting but again, the one thing we always keep in mind, melissa, when we report on releascalls, y recall gets a lot of attention when it comes to tesla in comparison to other recalls, this is not a huge deal. Phil, thank you adam jonas covers Morgan Stanley. Lets kick it off with the tesla recall, where phil left off. The number itself is very small. In the context of a company that is trying to dramatically ramp up production, the ability to have Quality Control and maintain Quality Control, does this flag some concerns for you . It would flag it if they had a problem that didnt recall it. This is a Customer Service opportunity, Good Companies