S p 500 ended in the red check out these moves from citi, bank of america, wells fargo and jpmorgan all in the green. Few days ago rates were plunging birds and cats were living together now look have the banks turned a big corner i dont know about dogs and cats living together if you had to be a cat or a dog i think of myself as a dog. Its not a good question to answer on tv lets go to the markets i think what happened everything got ahead of itself. You go back to tuesday i think before memorial day we power pitched southeast banks. Citi, you know what boring market, slow week, into a holiday, market will rally tl tee gott ahead of itself. When citi discount at that discount tangible book its been a buy. Thats whats happening. I dont think again the landscape has gotten better for the markets. The trading landscape in the short term has does citi have more room yeah well undershot to 61. The head wind that they face still exist today. There are some rays of sunshine based on what the ceo said today they expect growth in the back half of the year. Other parts of the business that can offset some of the losses or softness so the rate sensitive businesses so can you sort of extrapolate that maybe thing arent as bad as people thought i think that what the prices they were trading at before two days ago really reflected a lot of bad things. So i dont think more than a lot of them. Extra. Too much penalties there when you think where science at the bank was trading well under ten times earnings. Jpmorgan, ten times earnings, 3. 5 yield bank of america one ten times earnings thats a lot of bad news priced in their Business Models arent all interest income. Theres other income there as well so i think the markets are saying oh, the whole book of big money centered banks is a giant two year ten year spread im not selling them here. I think they are still attractive ill answer the question. We had one come from a market position ill talk to you context of the overall market you could make a comparison to the First Quarter 2016 when we were worried about Global Growth once we got the sense recession was off the table, banks are going to have a historic run citibank is up 13 in 18 days. If you look at the xlf its kept pace with the s p. The most important thing that happened today, and i hate hyperbole, this is oneof the most extraordinary trading days of the year that no one is talking about. S p was flat banks at 3 . Xrt up 3. 5 . This is a major structural dance. Has nothing to do with banks. Its a behavioral thing. You look at s p 100, the more beaten down you were the better you led. Simon property things like heinz which is down 80 . Ge its not a bank story. But they matter the most simply dead cat bounces and dead cats do bounce but do they come to life . No they are still dead it was more about deflation isnt as bad as you thought. I believe theres some structural stuff thats left over from the crisis deflation as exemplified through bond yields, gold going through the roof the things that rallied today are if affiliationary base these are retails that wont exist at some point. Its, again, it wasnt specific to banks the fact that it was, ge, tells you it was just an unwinding moment theres two sides here on this side of the desk. Extraordinary trading day or just dead cats bouncing . Extraordinary trading day in terms of move in yields. Everything was extraordinary in the context of what weve seen i tend to it should come as no surprise, i tend to agree with carter. These are bounces within the framework of things that have been too oversold. You mentioned Simon Properties look where it bottomed out in april of 2018. Look where it recently bottomed out. You can understand the bounce. Slumber Jay H Schlumberger han essentially dead bears could say it should have been up 25 handles on a day like today. The other flip side is growth at any price which had been where everybody wanted to go no matter terrible look at names like crowd strike or zoom, just absolutely getting annihilated today. Just a giant rotation. Everything that didnt work now is piled into that everything that did work time to bail does that continue i cant be in a crowdstrikers. Too expensive. They were too expensive two days ago. Too expensive for me when momentum goes out those kind of names have more down side its not terribly surprising crowd strike and company and their ilk are going down on a day like today or not rallying as much. Whats been interesting is google, amazon, anything thats been defensive, relative momentum but they tend to be low momentum stocks in difficult times in the market are underperforming. So carter is right to talk about schlumberger when i look at transports that are very Real Companies not going out of business, i dont think they are dead cat bounces. Im not saying the world got better in two days its always about positioning. Always about where the market momentum is. We have an ecb meeting come up in two days. We know that the machines momentum is on both sides. You have momentum down and momentum up. When it flips its you get these levers going on both sides. But it doesnt usually last that long at what point do you think would take a lot of time. And a lot more of this kind of thing because we saw others bouncing i agree i dont think you can say suddenly its all good for all these things that have underperform for a long time for the last three weeks we saw the David Axelrod outperform the s p. This isnt a one day phenomenon. Today was a bit of an exclamation point. Greet to sat to see you agai. Is it the banks or these sectors that were dead cats bouncing i dont know if i would go as far as the dead cat. What i mean by that its very enticing when you look at the move at the banks and put it in the overall context. Rates bottomed a weekago and moved higher citi surprise index bounceed into positive territory a week ago. Value ingeneral has moved up theres an inclination, this is the move in the value, cyclic alls weve been waiting for. You need confirmation on that. You need to wait and see what the fed does in a week the ecb similarly has to provide some delivery. This meeting is not as important as the one that comes in november when Christine Lagarde takes over you need the data to come in strongly if were talking about the global inflation trade, thats incredible bullish so, im enticed by it but not willing to jump all in on it just yet how are you positioned in the markets right now. Sound like you want to see how the data plays out the fed will cut 25, deliver on something. So thats sort of in the expected realm, the data is a little bit of a question mark at this point the thing about the market we have a path between the p and the e. The pe should be higher. We took the discount rate for stocks and cut it in half. The only reason the market isnt higher is because the market is concerned about the recession. What it comes down to is how will earnings come through thats why trade matters, hong kong matters earnings will be okay. They will be flat to slightly up youll get a revaluation higher because of those lower yields and thats where you play for the next six to 12 months. In the course of the next six months i want to see how the ecb goes, earning season we were 8 over equities we brought that down to 3 in the mayjune period an cone tent to stay in that period and see how the next month or so breaks. Expecting to move higher in your experience do you find that these value names they bottom when they get to a price thats cheep enough where people say everything bad is priced in. Ill wait it out cant be that much down side left thats what makes today so tempting they do tend to discount this. They may be discounting the fed next week and delivering not just the cut that everyone expects but what wren dollarsment of further cuts to come so thats why i want to see that come through because if they spoi disappoint then that could get snuffed out. It is a central bank story. Are we not making enough about whats going on in hong kong are we not take attention . When we came up here all bulled up in january we did so because we didnt see a recession coming we still dont see a recession in the next 12 months. We think that the central point. The market is concerned about one. Insofar as the fed eases that reduces those concerns as trade the tensions ease that reduces those concerns third quarter, if those estimates for 2020 are okay it will further ease concerns if you see a recession in the next 12 months you better be bearish. If you dont i think theres opportunity to upside particularly yields have fallen so much and discount rate for equities is halved the carnage were seeing in these tech names down 15 , and others, if that starts to go over to visa, mast card, microsoft a little bit it did today can the market endure that thats the Market Structure question the u. S. Is more tech heavy than other indices. You can see the overall market move higher. You may see a bit more international performance, more small caps do better in that environment. But weve seen periods over the course of the last several year, value sicyclicals do fine. Thank you so the central bank conversation had to come in to that still the number one dynamic when you talk about the pe ratios with lower rate that should have higher pes things that rallied today that largely when we talk about banks and lets talk about transports and lets talk about some of the other cyclicals. Those are not demanding valuations starbucks and food stocks and restaurants and health care relative to itself are so when you look at where the market can go even with recession if version is off the table this rotation makes a lot of sense and doesnt have to have some kind of earnings generated dynamic behind it. It just has people to get back expectation. Coming up at t rallying with one big activist investor buying the stock. Apple set to unveil a new phone. Were live from times square in new york city. Much more fast money after this it was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Is a because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Welcome back to fast hope. Shares of at t getting a boost today after activist eli most management revealed more than 3 million stake in the telecom giant. Elliott raising concerns around at ts current leadership and recent m and a including the acquisition of time warner says it should reach 60 a share by 2021. The stock was up by more than 6 im wondering if he was caught up in that revariesal by the end of the day up a pretty modest amount i think that, you know, if youre a company, the activist you never want to hear calling your number is elliott right . But what at t has is they are enormous 3. 5 million is a really big stake but its not enough to force them to do anything. In terms of like how aggressive theyve been in their prior things when they came out with ebay with a Smaller Company the company caved immediately. Is that different story. At the end they said we would like to meet with you. I dont know if they tried to meet with them before. I dont know if they ratcheted up the pressure a tiny bit at t should meet with them they are a large holder. They are smart people. Clearly have done a lot of work. Any organization has big as at t who has done a number of acquisitions that they have must have some things that are inefficient, must have things in there. They should meet with them to talk about this is a 2021 they could get to significantly higher numbers, thats in the future but a lot of room whats not obvious is what the elliott strategy would be. They are critical of a conglomerate approach. But they havent necessarily said we want these assets sold off and we want this to be a Media Company and this a Telecommunications Company whats interesting for company, im long on at t, it is the sum of the parts story when you the tart to hear theres a massive discount to the sum of the parts i do like it i think there was just a challenge to Randall Stevenson staying within house and staying within a boys network egot to make hires to run these new companies. Hey did you interview anybody from the outside did you push for the best ceo. Thats fantastic that alone should be enough to drive some value the stock has been bottoming for a while. His action is bullish. When you close on the low it will fill the gap. After april tell the second most Profitable Company is at t its still here and here to stay made a lot of investments concern for a long time their Balance Sheet didnt look particularly good. A lot of people he had conversations about the potential for a dividend cut i think to a certain extent maybe those fears have been sort of assuaged for a day or so and the way the market moved today indicates that it backed up today on what was four or five times normal volume but to carters point this is constructive i dont know if it gets to 60. Tim was banking the drum at 29 to 30 maybe the investment at t made four years ago are starting to pay dividends for them now i think thats the bet is it worth a look at this point in your view probably. I think that, you know, they do talk about some of the things. They just want them to actually just focus more. Focus more on the ones that matter instead of going through the missteps they didnt say anything about trying to put people on the board. It is worth a look for more head on over to cnbc. Com im melissa lee. Youre watching fast money on cnbc heres what else is coming up. Reporter jpmorgans attempt to tract the impact of President Trumps tweets boeing shuts down the testing of the 777 due to an unexpected event. Phil lebeau explains stick around fast money is back right after this. T 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. Stand up if you are first stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Welcome back to fast money the countdown is on apple gearing up for its key annual event taking place tomorrow. Josh lipton is in palo alto laying out what to expect. Reporter the star of the show tomorrow will be the iphone and were look for three new iphone models. Some updates could include faster processor, an improved camera system. Thats often an important reason people do upgrade. Maybe some stronger waterproofing and shatter resistance big question is the price. What is tim cook charging you for these new models one is expecting apple holds these price constant no real change from the current lineup were looking for wearable, a new watch. Air pods the fact if you combine wearables and services, according to apple youre approaching the size of a fortune 50 company speaking of services do we get any more insight its been about six months since apple unveiled those Service Investors want to know when it comes to apple tv plus, that streaming service whats the price. Apple was considering 10 bucks a month. And apple arcade that is a big potential opportunity. 1. 5 billion people do play cell phone games and the way that apple sort of is badging these pay download games is unique well be looking for all that tomorrow back to you. Josh lipton in palo alto, california why do we care so much if we do care about they products since the big upgrade is next year because refresh and upgrades even the software, gives the company an opportunity to flex its wear josh talked about the pricing. I think it would be interesting because if you look at the cut in memory prices and different components they get more profitable they had a lot of leverage they can pull especially in a trade war backdrop it comes down to service it comes down to the blended multiple of the company which i think at 17 times, 11 with iphones and 25 at services, you have a 250 stock i watched the programming during the day on cnbc clearly on the Halftime Report from san francisco, he said tim cook should step down or should be fired. One of those two things because apple no longer innovates. I dont think thats true but i think to tims point the strength has been there the fact they are now utilizes install base and become a more service company. You have to admit over the last couple of weeks apple has traded remarkably well when some of the rest of that group in the fang group has not. Maybe all time high in 2018 which was 227 or thereabouts i dont know how High Expectations are for this meeting. Other ones have not been that much higher. I think it fits a few thing. One if they want to downplay themselves as a hardware company, iphone is the centerpiece of that, to have that be a little bit of a less prominence because everyone is why i do buy one now wait for 5g next year. Expectations are low thats good going in im long i think the thing that makes me most nervous is more extraneous trade war, tariff its not the big show tomorrow apples big day is tomorrow well take a closer look at some stocks because southeast stocks in the apple universe are nearing some key resistant apple as well, guy touched on it. Daytoday action compared to other mega cap, super cap piers is impressive. Lets start with the semis its a leading indicator in many ways a risk on trade. What we know is that the Semiconductor Index ill zoom in a bit made a slight new high and then as we approached that level but whats not happened is relative performance of the s p was never able to confirm that so critical here is do we or dont we break out and youre going to obviously make a bet or not. A lot will say it will be a triple top and some will call for a breakup. The tell is something is not quite as good as it appears. I would draw it this way ultimately semis dont make the new high and they fail so lets talk about apple. Apple on the other hand daytoday performance is relatively good. The set up is as follows youre into this very tight and we pushed above this and back to where we did get above it. We did get above it. Heres the zoom. You can see were just starting to break above w