Transcripts For CNBC Fast Money 20240714

Move higher, stocks surging with the dow gaining more than 250 points energy, consumer discretionary, industrials all leading the way, this as the yield on the 30year bond hit an alltime low so do you trust todays market rally . Guy adami . Hi, mel no, i definitely dont trust it but i will say this. As we get into the later part of this week, into a holiday weekend, theres an old saying steve knows this on the floor never short a dull market you could see the market flowing through over the next couple of days into early next week. I will say it again. I think it will culminate on the down side when the vix trades up to 30. With that said, there are Trading Opportunities here i will do a power pitch in back end of the show. I thought you were going to do it right now. That is going to speak to exactly that. Yes grasso theres another saying too, dont fight the fed. Never short a dull market, dont fight the fed. You have both coming up right now. Do they cancel each other out . No they might. Actually thats where i was going to go. Really . Oh. Because the fed right now, you dont know which way the fed is going to go so you dont know which way you are fighting so that to me is the caveat to whether the markets are safe to get back in or to stay in right now. But i am invested. I think th you were mentioning earlier on the call of financials, particularly regional banks, Retail Stocks, these are some of the most beaten down sectors of the market. Right so history doesnt rhyme if it repeats itself. I dont know why i said that. Well, because we have seen the moments throughout the last six to twelve months where financials underer formed transports which underperformed for 16 months. What didnt make sense about todays tape today was you had a flight to quality and bonds. We tested the lows in ten years we hit sunday night. We had the dollar rallying a bit. We had other dynamics that would be kind of riskoff trades and yet a huge move in small caps, a huge move in the xrt or the Retail Stocks and the transports i think we have oversold conditions here. I think the reality of, we are trading in a 100 s p range for the last month, thats it. With a fair amount of volatility and a whole lot of anxiety and a lot of people grinding and nashing their teeth and not much has happened i think todays breakout is nothing you say, plant a flag in the ground and say this was the moment, but i do think when you get oversold you get these bounces. You have a chart . I do. Which is a concern to you. What is your cliche i dont know if i have a cliche i have never understood it, but ill use it for this this chart was being passed around i think it has been passed around for a week or so but a trader sent it to me today it basically shows what people will call a megaphone top or broadening top, technical formation. Im not a echnician, not playing one on tv today. Too late. Oh, boy anyway, the point is what you get here is the broadening formations and you usually get five touches on the line what does it show us i found it interesting that it shows us we have effectively been trading in a very broad range with volatility expanding. To me that frightens me because when volatility expands, things break. I think this resolves to the down side. It certainly could go up to the upside we will have somebody talking about it in a minute or so, but to me it is just a picture that visually shows what we talk about every night. Is it the trade war . Is it the fed . Is it this, is it that you have this massive volatility, very difficult to trade and likely things break. Can we put the chart up again . In terms of touching the line, does it have to alternate between highs and lows yes. So theoretically after number five if we can get back up it would go down to number six, which would be the orange line no, five is it. Oh. Fives the number. That is it . Thats all it goes. It breaks after five . But it is a wide range, is that right so the way to interpret this, as im told, is it either breaks violently higher or violently lower. Interesting. My view is we break violently lower, but five is as many touches as you get with the old megaphone top. We used to always say theres no volatility left in the market now we have extreme versions of volatility yes, i think both will be right. I think you could break lower and you could break higher both will probably happen, just which happens first. It is probably higher in my opinion. You still have people reach for chemicals today. When was the last time they bought chemicals im long tsc, packaging. And that makes you feel good about breaking higher . Because they were so beaten up, people were trying to risk out and they were so worried about global growth, now theyre buying the things that they threw out, which makes me potentially set up for a higher market. That would be the glass is half full interpretation of the markets move today. I am always half full brought up on wall street, what can go wrong will go wrong another cliche yours, by the way, is history doesnt repeat itself but it often rides i dont have to be politically correct. It doesnt make sense anyway. Now youre mad. The mets had a tough night last night. Come on what were you saying i think the market over the next couple of days grinds slightly higher. People on the weekend will feel good about themselves, thinking they they figured out what the inverted yield curve moving, and then things will get interesting. I think october will be a historic month for a number of asset classes, specifically the one that bk knows the most about. Everybody made a point thats been emphatic about the conditions here. I would argue that we havent seen anything yet in terms of volatility, even though i think people felt we had a big and i think we traded in a very tight range here despite the divergence of outcomes we could have here. So i hate to do this, but it is a very quiet week. It could explain some of the subdued. We also get violent moves in these types of weeks i think you have a major expectation of rebalance out of bonds into equities at the end of the month. Or it could have happened already. It may have been the bid to the market today. Right. You got the sense, and, therefore, oversold stuff would be a rotation in for relative value players. But as we have echoed and unfortunately had to address almost nightly on the show, theres nothing about the trade war that has changed hong kong is still a tinderbox you have a dynamic with the fed thats still unproven. 50 may be more in the lexicon of where the market is right now except for the fact im listening to a fed which doesnt really sound like to a man they want to go 50. If anything, i still think that thats the most important dynamic for the market. Youre the only one on this desk that thinks the market could break higher what would you buy here in this environment . I would buy the things that have not worked, because today if if todays an indication where you should be going, it is energy and chemicals, the things that havent worked. We know if theres brighter headlines on the trade front, all of those large cap tech names, all of the Semi Conductor space, everything that is, quote, unquote, trade related, will rip higher. But the best bang for your buck are the things that have not performed that start to perform now. All right well, the countdown is officially on apparently tony dwyer says the clock is now ticking. Look at that clock ticking on a recession, and the market peaked 24 months, zero days it is about 19 months of t the. Thats how we calculate. Tony says the market will rally 15 until the recession kicks in he is at the plasma to chart it. Tony. Thanks, mel wall street is filled with strategists that tell you something, it comes on and when it gets there they change. I wont be that guy. I dont think it is different at this time. You will notice the grade, shaded areas are recession what happens every single time prior to a recession, sure enough, you get a yield curve inversion of the 210 this one was a 39 rally prior to recession this one led to this one is 34 rally before the recession and the peak of the market this was 39 , and this was 29 so i think were going to go actually a lot more than 15 i think we will do 15 in the next year, but it actually takes about two years. If you look at the last three cycles, the average gain has been 34 the median gain has been 34 over 22 months how do you know then when is it time . Like these numbers are great who cares about a median how do you know it is time to get really defensive it is time to get defensive when Corporate Credit starts to act poorly what you will see here is prior to the recession you had a bottom in the moodys bwa. This is the lowest level of Investment Grade bonds this is the average yield of the lowest level of Investment Grade bonds. It made a low two years before you went into a recession. We just made a record low. It was a record low. It was the only second time in the history of the moodys bwa since 1962 that it dropped to minus 15 thats not signaling money is shutting down. Money shutting down is what causes a recession lastly, the fed, stunningly, the fed has yet to get really ahead of the market. How do you know when it is ahead of the market . I believe they will, which is one of the reasons i still think the market is going to go up how do you know theyre not ahead of the market . Because this is the current lower bond of the fed funds rate and these are the two and tenyear note yields i dont need to be a master economist, because im not, to know that the fed is behind the market when you are 50 basis points below the fed funds. I think tony comes over what do you think . Yeah. You never ask. Now you ask. Im joking. Come on. We will bring a chair. She does what she wants to. Right. Thank you. Which is what she should do, by the way hi, tony. I brought paperwork. Wow, very prepared. I like the smile. I got to read you something, mel. Youre going to love it. I dont even get i thought you did your little thing at the plasma. Im waiting. Okay. Here is my question. If people believe theres a rule of thumb that you have a certain amount of time after this, you know, indicator flashes a recession signal, doesnt that time the more people know about this lag time, doesnt that time period get compressed . So it is a great question i went back and i read my prior notes because i want to make sure that im not full of it either in all of those prior notes, every time reading your notes, by the way, doesnt make you less full of it. It may be more. Definitely more full of it. But the reason that i did that is to make sure that it isnt different this time, that i was saying the same thing back in the last cycle what creates that lead time is the tenyear note yield dropped so much. We have gone from 3. 75 to the 1 hadnt 4 level thats extraordinarily stimulating because bank lending has not shut down, so theres money moving around and it got cheaper and you are still at full employment. So you have money that kind of surges into the market because the drop in the tenyear and then it kind of shuts down, and the time it takes to put that money to work is what causes that lead time but you get this kind of bump in the economy. So you are like, maybe it is different this time but it is not different this time. In the past times, im curious also, where does that tenyear yield typically drop from and does that make a difference because some could argue that a drop and we have been subtwo for a long time. Thats right. Even though we were more than three november of last year. We have been subtwo for so long that people could say that there was money being borrowed at the very low levels anyway, so every incremental drop in the tenyear doesnt lead to incremental borrowing on the part of corporations, which wont lead to incremental spending later on. It does at the household level, there is no question. Karen has brought this up a lot the last couple of times ive been on. No question industrial spending and corporate spending has come down because of the trade war. Thats not debatable household spending, however, is more sensitive to the drop in rates of theres an idea in the marketplace that the lower risk premium and the global overseas negative yields has created this artificial suppression in the long end, which means that this may not be a good recession indicator. What i brought to read is a quote, if you dont mind, mel. Does she have a choice in. Listen to this for a second. Apparently not. Theres been a good bit of evidence that the decline in the premium and perhaps a great deal of savings chasing a limited number of Investment Opportunities around the world have led to a somewhat permanent flattening or even inversion of the yield curve, and that pattern does not necessarily predict a slowing in the economy or a recession ben bernanke, february 2007. So that quote is saying the global low global Interest Rates is creating demand for the u. S. Product thats artificially suppressing the long end of the curve. We have done this before. It didnt go very well though. It didnt go well it was a much different cycle, but it didnt go well, as you know. Yeah. Im curious, tony if were bgoing to get the rip higher, steve grasso said they were buying chemicals. Is that the place to be . In the earlier segment you were talking about bonds coming down inflation breaks even up to today. I think it was this morning when it became a pervasive story on the street that bill dudley came out with his oped on bloomberg that suggested you dont want to have policy that allows for President Trump to win a second term now, nobody on the set or anywhere knows my political bias thats not my job. But you have a vicechairman of the former vicechairman of the Federal Reserve openly stating that the risk to the market or the risk to the economy is President Trump and you dont want to pursue this policy because it might help him. That right there gave the fed the flexibility to become aggressively accommodative as i have been suggesting lately. Why . Because right now they have to prove theyre not kowtowing to President Trump. Now they have to prove on that oped, they have to prove theyre not biassed against President Trump. They have to prove their independence so you remove both tail risks. What can they follow their own inflation breakeven, which has fiveyear forward inflation at 1. 5 . They want 2 if you dont do anything, how are you going to get 2 if it is at 1. 5 . Thats what i think is going to kickstart this rally that goes towards the peak but a lot of people on the show you know, i have been a perm au bul perma bull i have been bullish for ten years. I said the conversion changes the tone im watching the credit indicators to make sure it is not going side ways. Thanks, tony. The guy is good isnt he good . I was nervous he had another piece of paper hanging on him too. Theres a couple of issues with that the problem is during the other recessions the fed had about five or six Percentage Points to bail the economy out so they dont have that. Im worry about if the market is pricing in something cataclysmic after all of that happens, and you also want to hunt yield. So stick with whats been performing as well so utilities cant ha have a fu leg higher in the economy. I think the fed can cut rates from here to eternity. They will not get the inflation they desire and they think they can somehow manufacture it i think history has proven they can do anything but. Tim, quick . Utilities are up 32 from the beginning of the trade war you tell me what is going to reverse that trend im not sure. Coming up, fox and williamssonoma on the move after hours. We will give you the highlights from the quarters. First, facebooks 2020 vision. The social media giant seeing major money moves ahead of next years election. We will break down who is driving the big spend. Much more fast money right after this along the byway much more much more than this i did it my way announcer verizon is americas most awarded network and the only one with the galaxy note10 5g. Right now, when you buy one, you get a galaxy note10 free. Thats verizon. Thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. Welcome back to fast money facebook back in the political spotlight once again ad spending among democratic president ial hopefuls skyrocketing our own Julia Boorstin in los angeles with the spending spree. Hi, melissa despite the manipulation on facebook around the last president ial election, the fact that the platform is offers such a great opportunity to narrowly target voters is once again making it a destination this time for democratic hopefuls the wall street journal reporting that a Political Action committee focused on turning out Asian American voters saw the cost of generating one email address for its supporter or donor list skyrocket to 279 from 9 or less now, it does make sense that the price hikes would be happening now. The deadline to qualify for the next debate is at midnight, and democratic president ial hopefuls have been spending big to reach the donor and polling threshold necessary to be included now, it is not that facebook is trying to take advantage of a surge of interest. Prices are set rather by demand in facebooks auction advertising system facebook did not weigh in on the reported increase in those ad prices, but it did say, quote, our ad auction is designed to promote a diversity of advertisers, not just those that bid more it takes into consideration whether the ad will be interesting and relevant for the person seeing it all of this comes as facebook ramps up its requirements for political advertisers. Now political advertisers have to go beyond just verifying their identity and location. Now they have to provide information about their organization and who is funding their ads, including either their tax id number, a government website domain, or federal Election Commission number now, all of this is just facebooks latest move to protect the 2020 election from any manipulation and also to ramp up transparency about who is on the platform and what theyre doing and what theyre spending money on. Back over to you, melissa. Julia, thank you. Julia boorstin how many candidates on the democratic side . 20 but whittling down. Still counting. So thats a huge and a mayor. A lot of spenting. And it worked in the last election everybody is saying if you do the digital ad spending, it works. I think facebook gets a tail wind from it the name in the social that i like that looks like it wants to break out is the twitter machine, twtr. Thats the one you buy on a breakout. I think facebook is just their core business is working so, i mean, you are seeing ecommerce. You are seeing actually leading commercial usage, instagram finally starting to pay dividends. I think if you are going to make the election kind of tail wind argument for facebook, you have to make it for Twitter Twitter will be the greatest beneficiary starting to see growth that is more interesting. If it is a tail wind for these guys, is it a tail wind for traditional media . It has to be. They say it is a boon for traditional media. The problem is that media is caught up in the bullseye of cord cutting and do they have a streaming product so it gets muddy. Facebook is one of the best out of the fang names. I would stay there. It is, but it also had pretty big moves along the way. In december this was 125 stock, and we talked about this thing i get a lot wrong. One of the things we got right was the fact that end of this quarter, facebook would retest that alltime high we saw in july it is exactly what happened. You have pretty much a huge double top now around 211. The point is this. I think it trades down to 165, thereabouts, which is sort of the 50 correction of the entire move we have seen this year. I agree with tim and bk i think twitter is your bet. For more on the big money social spend ahead of the election, head over to our website, cnbc. Com. Here is what else is coming up on the show. Im melissa lee. Call it a royal rally. The king dollar just got a big boost from the queen well explain. And later, guy is stepping up to the plate to pitch his next big idea. Why he thinks one big bank could be a home run investment all of that is on deck wn asmoyetnshe welcome back to fast money we have an earnings whip on some after hours movers williamssonoma and box, both on the move after reporting we have full Team Coverage Contessa Brewer standing by we start off with josh lipton in San Francisco. Josh. Reporter so, i talked to analysts that cover box and one point of concern that they have is the companys growth rate today they say 130 and now roughly half that. I asked them about the needs and he said to grow faster theyre advancing product portfolios, trying to deliver more solutions for customers, pointed out their simplifying their gotomarket strategy. I wanted to get his take on the state and health of i. T. Spending here more broadly aaron saying the i. T. Market remains fairly stable, though trade disputes and tariffs dont make for a stable macro environment. On the call he is hammering home on the same themes listen, we are involving the product, introducing new products, were working hard, he said, to improve gotomarket efforts. Noted they were making progress in his words on training, for example 36 growth is 100,000 deals. Note the large install base of customers, strong product roadmap, making the case he Sees Opportunities ahead but you see the stock down right now heading into in it was already down nearly 50 over the last 12 months back to you. Thank you, josh josh lipton in San Francisco we heard similar sentiments from different businesses, sort of the same kind of tech sector, same tariff trade headlines. The quarter in and of itself, it wasnt a horrible quarter the full year guidance wasnt horrible either. It comes down to valuation and still close to 70 times forward earnings is too expensive in this environment where people are looking for growth it has been cut in half over the last year. July of last year it was 27, 13 now. I dont think you buy it yet i think you have to wait for the flush. We havent seen it. I agree with that eps, box has beaten eps 100 of the time and on revenues 75 of the time the ceo nailed it. They have to grow quicker. If theyre still losing money, you have to get a much larger growth rate to be buyer of the stock. I just think it is such a commodity space to be 16 . I dont see it for a company at this multiple in this environment. I dont wait for a flush lets move to five below, pbh, williamssonoma, all moving after hours. Contessa brewer is on all of those stories. Hi there, contessa. Reporter yes, back to cool for five below delivered Third Quarter guidance that wasnt so sweet the ceo Joel Anderson said it reflects the current tariff situation and the timing of efforts to mitigate the impact the Company Stands out for its willingness to tackle the impact of tariffs and expects they will increase as scheduled throughout the fall stock in extended trading, we did see it dip somewhat right after they reported. Now you can see, fancy clothes, delivering matching top and bottom line beats but week guidance for the Third Quarter the ceo said north american and china had week traffic trends including the impact of the protests in hong kong, so the company had to dress up promotions to lure in the customers. The shares after hours just off slightly williamssonoma really cooking when it comes to Home Furnishing comp sales up 6. 5 where analysts were expecting 3. 3 the real spice in the numbers . West elm, which the ceo calls the biggest Growth Opportunity comp revenue up more than 17 . While the Company Raised fullyear guidance, the implied outlook for the second half is lukewarm i had at least three puns from you are they really puns or Just Creative writing you can call it whatever you want. We love puns. Contessa brewer. So, again, the impact of china tariffs. The impact of tariffs, particularly pbh theyre not necessarily as high end at Louis Vuitton those are the ones that were really hurt during the china tariffs but, again, i think the story of retail. A mixed bag here and there williamssonoma, not a lot of people buying pots, but i guess c con tessi contessa went out on a limb with the west elm. Her creative writing was much better than brians. I will say i like williamssonoma here it is a company that traded with the new gried answer and raised guidance at 14. 5 times 2019. This is part of the housing trade, part of the home depot trade. When you go to home depot you are probably stopping at williamssonoma i dont know, you are probably not buying pots and pans, but a toaster. An apron, new mitts. I somewhere some nice cups i got at williamssonoma. You are running into massive resistance 2008, september 2018, 72 was your resistance. Right now it is around 70 looking at the chart, i would trade at 67. 30ish wait until it blows through the 70 mark before you dabble in that name. Used to have a beautiful pashmina you used to wear on the desk, remember from the ceo of five below. Not you, melissa. It had little pineapples on it. It was fantastic, really nice. Guy, do you have pashminas of course i do. What do you feed them anyway. Margins were better the guidance wasnt terrible at 32 times, given the ps growth rate and the 20 Sales Growth Rate in the last quarter, i think the stock off from the alltime highs is worth the buy right here coming up, the greenback rallying on big brexit drama across the pond. We will break down one way to play the dollars dominance. First, guy is making his fast pitch comeback with one stock he says will knock it out of the park find out what the name is when we come right back more fast money right after this in the human brain, billions of neurons play in harmony. For people with parkinsons, some neurons change their tune, causing uncontrollable tremors. Now, abbott technology can target those exact neurons. Restoring control and harmony, once thought to belost forever. The most personal technology is technology with the power to change your life. I think the market is now behind google. I think google is ahead of the market i think google will sort of hang around here as the market goes down thats when you want to buy alphabet that was guys pitch in may for google since that call alphabet is up nearly 2 , but it is a big boost off the recent Earnings Report what do you do now, guy . The timing was pretty lousy because if you look it cratered in june. So the timing was bad. I think you stay with it, although i do think the market is vulnerable here i think valuation suggests, last quarter suggests google has figured it out so i would stay with alphabet. You got another fast pitch for us oh, im going to head on over to the smart board right now i love the power pitch, maybe more than anybody in the history of fast money. You are going to be shock at what im about to pitch you. We sort of teased it at the top of the show. Hold your hate, twitter folks. Here it goes i am going to power pitch, citi. You will be like, wait a second, you have been negative on banks, especially citi, european exposure, what are you talking about . You are right on all of those levels but sometimes you have to make a trading call. In the short term i think you can see a rally. Trading at a discount. What does it mean . Citi reported that the tangible book was roughly 68 they yesterday traded below 62. When it typically gets to that kind of discount it has been a buying opportunity number two, i think the bond market is overextended i think rates continue to go lower, but in the short term you might have seen a top in the tlt, maybe rates tick higher that should be positive for banks as well. Third, it did, it held critical support. We will pull up a chart and show you. Dan nathan mentioned this the other night, but the 60 level in citi has been decent report bless you over there on the side 60 held a couple of times. Although i dont like the banks long term and i think citi has tremendous issues, i think for a trade citi sets up really well for the next week, week and a half. Hi, guy appreciate your sensitivity to the guy coughing off stage i am very concerned about their net interest margins and thats something from money center bank, and if you looked at last quarters numbers which were fine, is an area of concern. For all of the banks, and citi as well, the numbers have been really poor again, i think european exposure is one of the reasons the stock has traded so poorly i dont think the banks are fixed at all, and i think the points you bring up for the long term suggest banks go lower. In the short term though, and we have seen it before, i think you can see it 12 to 14 bounce in a name, in a market that goes side ways to slightly higher, in a segment still probably going lower longer term. Hey, guy. It is bk longtime listener, firsttime caller. Hey, brian. A power pitch im curious. We have a fed meeting coming up in september, potentially maybe trying to resteepen the yield curve. Is that the catalyst for the trade . Maybe you talked about the operation twist. A lot of hockey fans remember tony twist i totally digress. You might want to look it up yes, that absolutely could be a catalyst again, this is a trade this is more trade than investment. I think this is short term when i say short term, over the next couple of weeks again, you have seen stocks like citi rally 8 , 10 , 12 in two weeks time, and to your point maybe that twist, that operation twist if the fed talks about it will be the catalyst to get this trade done. No more questions time to vote are you buying guys pitch on citi grasso im buying it for the same reason, on a technical basis if you look at the 60 level it has held and be great support back to january of this year. But i guess guy would probably i would estimate guy would agree with me on this. If it breaks below 60, thats the way to exit or puke the trade. Bk . You know what i came into this thinking i was not going to say buy you probably cant read this im going to say buy guy convinced me, completely changed my made for trade. Tim and a triple. Wow ultimately, banks did very well in the last quarter i love the fact that the capital ratios are going down. Why . Because theyre paying out more. Banks are becoming properly places. Three buys on the desk. You know what it means, guy . It means im going to lose. Tony braxton tonight. You guys at home can vote on guys pitch on citi. Our twitter poll is up at cnbc fast money coming up next, king dollar got a boost from the queen fast money is back after this. We think you would really shine in the aflac program. Aflac coach saban we have Health Insurance. Did Health Insurance pay for everything . No, we still have bills. Aflac gives you money directly to help with those. Aflac and your deductibles, knee brace, whatever you choose. Aflac sounds like a winner. Umhum. Umhum. We try. Get help with expenses Health Insurance doesnt cover. Get to know us at. Duck aflac dot com welcome back to fast money the pound getting pounded today, falling as much as 1 against the dollar this as uk Prime Minister Boris Johnson doubled down on Brexit Johnson moving to temporarily shut down parliament, preventing lawmakers from passing new bills that would stop the uk from crashing out of the eu basically he asked the queen if he could suspend parliament and she said yes. Right, so this obviously is a political packet frankly it stunned me. It stunned me that the market didnt react more to this. But the netanyanet of this is t you are starting to see, it is one more shot in the currency war. As the pound goes down, people go into the swiss frank. The Swiss National bank said it is too strong, they will intervene and it creates more chaos. We talked about the volatility that is coming from the currency market so, you know, if were looking into the fall and what we can what can break, currency markets can break. Obviously they go into the dollar too, the u. S. Dollar. Right just to remind you, if you are looking for the weighting of the dollar index, here they are. It is about 58 euro, almost closer to 60 now 12 , pound 14 , japanese yen and a sprinkling of other european currencies historically, to me the pound rising against the dollar has been a very good sign for risk assets and reflation trades along with the fiveyear part of the curve. Without getting too deep into the global macro, seeing the pound fall is nothing positive for me as an asset allocating. And the impact on u. S. Companies . Well, maybe not as significant as the whole yuan situation we have seen in terms of the currency, we are talking about a currency war, bk would agree with this, at a certain point it becomes a currency pricis. In a war you can control things, in a crisis you cant. I think were on the verge of that, which is why gold still works around why bks bitcoin will work as well. I always say the opposite, by the way. In a war, you cant control a war because a war, you know, and a crisis is something that is measured. Sorry. So the currency crisis comes when you run out of reserves and you cant do anything. Thats the crisis part of it theres a couple of countries looking at that right now, turkey, south africa, those are the two. It all stems from a strong dollar which hurts u. S. Multinational. Some might make the argument we will lose the war if we choose to go into a war because we dont have the reserves to prop up the u. S. Dollar. We dont have the fire power on our own to unilaterally prop up the u. S. Dollar. We dont want a strong dollar though. Excuse me, to intervene. Sure, you could print 100. You could just print more dollars. Increase supply, the dollar will go straight down by the way, as a bitcoin holder, please do. Knock yourself out. Thats the other alternative. They could use the Balance Sheet again. So they stopped the kwoquantitae tightening if they went back to easing it could do it. The strong dollar could mean more good news for the u. S. Consumer mike khouw is in San Francisco with more on a bullish bet in the Options Market what are you seeing . You know, it is interesting because, of course, in the second half of august we havent seen that much options activity. Pete was alluding to this yesterday, below average in most cases. Xrt traded well over ten times the average daily call volume today, and on a low volume for the Options Marketit is a particular standout. Where we saw the activity was the september 6th weekly 40strike calls. Somebody paid about a quarter for 20,000 of those. Thats making a bullish bet that xrt could rise above the 40 strike price by at least a quarter that they paid thats going to be a week from this coming friday it is a shortterm bullish bet, trying to take advantage of the fact options look fairly priced here, a bullish bet for a sector that has not performed well this year. This is what we were talking about, do you trust the balance in some of the sectors and we named retail specifically. Grasso wouldnt you think that the worst is over for a lot of the retail names, or the fact that theyve priced in a heck of a lot to the down side i dont know if you can i always use this argument it is not priced in until it is priced in, but i would think that theres a heck of a lot of headwinds that have already been established, already been assumed in the retail space. But stick with the winners stick with the raw stars stick with the t. J. Maxx egs, the walmarts, the costcos. Dont go into the deep end of the pool on names that have not performed well. Mike, this is a shortterm trade, granted, but what is your feeling on what theyve priced in maybe what the Retail Stocks have not priced this is an increase in the new tariffs that they could face, particularly after december 15th. Yes, well, i mean, of course we were just talking about currencies some of the currency issues have been a little bit of an offset for the tariffs, havent they . Thats one thing we could certainly take a look at we have also seen some standouts. Target obviously performed very well depot performed very well. Costco is a retail, upside surprise earlier this week, nept of that store opening in china not all of the news is bad necessarily. Of course, the other issue is where are you going to put your money. I think that might be one of the reasons people are doing this. On top of all of that with the volatility were seeing, an option prices not being up as much as we might otherwise think they should be, thats probably why were seeing them use that to make the shortterm bullish bets there. Thanks for that mike khouw in San Francisco. For more options action tune into the full show this friday at 5 30 p. M. Coming up, the 30year yield sinking to the lowest level on record up next, the best place to stash veur cash. Li in times square, much more fast money still ahead options action is spongesored by thinkorswim by Td Ameritrade igh school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at Td Ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom mad skills. Education to take your trading to the next level. Only with Td Ameritrade. We believe in education built for all people. , [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Welcome back to fast money a rate wreck on wall street with the yield on the 30year bond tumbling below 2 to the lowest level on record. The long bond is now officially yielding less than the s p 500 dividend yield for the first time in a decade meantime, treasury secretary Steven Mnuchen out in the past hour or so saying a 50 or 100year bond, an ultra long bond, is under serious consideration. This he told bloomberg. Yes, which i mean makes sense financially, right why wouldnt you borrow money at effectively no cost to you i think that certainly makes sense in terms of looking at it financially. In terms of how much debt we have, thats a whole different story. But when you look at kind of the 30year bond at 1. 93, you have to say to yourself, in 30 years is it going sometime in the next 30 years are rates going to be higher or lower than this i think it is a pretty safe bet to say theyre going to be higher at some point. What would it do to the yield curve . Theoretically if an ultra long bond is yielding basis points above the longest bond, does it steepen the curve . Makes the curve longer. You will have a pivot in the curve in the long end. We have seen it in corporate issues, in some of the Biggest Companies in the world that have been able to do it it shifts some of your liability and Duration Risk and it is smart thing to do. It is something the European Union i think should be doing. With the 30year bond yielding less than the s p 500 we decided to play a game of would you rather yield hunting sometime four stocks in the s p yielding more than the long bond. We kick things off with nordstrom yielding more than 5 compared to 1. 9 on the 30 year. Tim, which would you rather . To me the 30year bond, no question i would rather own. I would rather the 30year bond. Over nordstrom . 5 of nordstrom is 20 minutes of trading on a bad day. It is not the reason you go out and buy the stock. It is a company that right now is down 38 in a year when, in fact, we have answered no questions about the company. The only bid to the stock comes when you talk about a takeout and im not sure what price that would be so 30year bond. Next up, wells fargo, yielding just over 4 . Would you rather, wells farg fargo on the 30year bond . This comes down to a time frame. If i look at why is the 30year bond down, we think why is it going lower, which is not good for wells fargo in the relatively short term. The only person with a 30year time frame is warren buffett. Lets say it is a oneyear time frame. Then i want to buy 30year bonds all day long and twice on sunday. Wow. Wow. Johnson johnson yielding around 3 right now. Steve, would you rather . Would i rather . I would say Johnson Johnson, lets get it out right now, it is around 3 not that much of a difference. I think the market is going higher so i think equities are going higher i think Johnson Johnson had a bump of people caught off sides. I think theyre reestablishing long positions Johnson Johnson. This one is an interesting one. Apache, yielding 4. 5 right now. 30year bond or apache, guys when does a duck come out of this is would you rather. Did you read the graphic but were not yield hunting. Yield edition. Not yield hunting, guy. Can we not confuse these things apache was a 50 stock in october. It is a 21 stock now. So it wipes out the dividend very quickly it has bounced over the last year, year and a half, but the bounces have been short lived. To answer your question, i think im in the bk tim camp. Wow. Yeah, wow 30year bond jwow, www. With an extra w. Final trade innovate. Rom using feedo to introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. The moment youve been waiting for. It is time to reveal if you at home are buying guys pitch on citi group sorry, guy. Oh, no. They said no, they are not buying your picks on citi. I think it was forecast because we had three buys on the desk. Yes. You know who is voting for this and not voting for this tony braxton she wants to hear the song every night. I know. Thats true. Why do you take such glee when i get eviscerated in these games . I dont, i dont. I take glee when everybody gets eviscerated. Equal ee visceration tim, final trade williams and sonoma part of the housing trade that i think could have Sharon Williams in there but the bottom line is 15 times they upped guidance, 17. 5 comp. Like it. Bk. We talked about lower rates, currency wars, potential recession. You know what does well in all of those gold steve. Chemical space, tse is the ticker thats how it comes out. It has gotten beat up in stock price. I think it is going to recover. A shout out to the Great High School Football Players of georgia. They played over the weekend and they all watch fast money. I know you find it hard to believe. Citi bank for all of you who voted more. Dont go anywhere mad money with jim cramer starts right now my mission is simple, to make you money im here to level the Playing Field for all investors. There is always a bull market somewhere and i promise to help you find it. Mad money starts now hey, im cramer. Welcome to mad money. Welcome to cramer. Other people want to make friends, im trying to make you money. My job is to train, educate and teach you. Call me or tweet me jimcramer there is a gaping hole in the American Education system, even though calling it is system seems overly generous. When you go to high school, they teach yo