This is a trade war that seems stob a manufacturing trade war to what extent we get that tomorrow it should be noted that last months ism services was a very bullish number which had the markets reverse a twotai plunge like the one we had when people thought okay here we go but you had adp showing the labor market could be if you look at the threemonth average on jobs on adp down about 85,000 over the 12in month but not much changing. Karen you said last night you were getting worried youre more worried on a relative basis more worried today. A little more today but i see a lot for fear in the market right . Things are feeling a little panicky. Not superpanic but one of the things i watch closely is the vicks we had a big spike in the vix today. I think now is not the time to buy volatility i think this move too far too fast if anything if we have the story, the eu tariffs are that just came out, if thats sort of carb shall that with tesla numbers i guess well get to later if that starts the momentum down and there is a big down open i will sell protection into that i like to look to buy things when they start to trade in int jers im looking for some of those to add. Technically weak. Cut through the 50, cut through the 100 day. I said it the other night on the show i dont see us doing what we did last year. Its too easy. I dont think the worst is over. But i think youre okay to dip a little bit on the buy side you would buy this twoday dip. The other day i bought alta sold it so stock specific today, thought about buying roku was on the fence on that things that have been beaten up drastically that are due for a bounce i think youre okay with. Dan. I think about this time last year, the s p up almost 10 . Around 2950 no one thought we could go down 20 in a matter of months i dont think anything is too easy when we talk about selloffs in the market where the situation is rates are low and people think its the only place u. S. Equity is the only place to be relative to europe and agia i just dont like hearing this strayed stuff moving around. I dont like it floating weve been talking about trade as it relates to china and thats the most important. Thats the economy growing 6 plus when they when they slow it reverb rates all over the world. We know the data in germany is horrible thats practically are in recession thats the biggest economy there. When the trade war goes on multiple fronts, i say, you may get your headline you are waiting for in china wait a minute. Global pmis were negative they were the first ones that were negative. They were negative for over a year and now for the last two months youre seeing that turn. So it might be us chasing them down at this point i dont know. Well, i i agree with that so what thats terrible news isnt it, being the last man standing when we certainly from the resilience we have in the economy. Look, we talk about credit and people come on say if credit is okay. Youre not seeing credit hold up if you see the job market fall off. Because Consumer Credit will rickle through but also Corporate Credit side. We talked about the corporate Balance Sheets if you look at the highyield etf, its down 2 points the last couple days not great news if you look at the twodays moves in a number of sectors including banks, the banks in two days have taken out almost the entire rally of the Fourth Quarter zbreelds yields have gone down and yield curve steepened because the low end is more bearish. I think its interesting to think about 2016 a volatile year. Brexit caused volatility in june and july of 2016 then into our election i think what we are seeing just this week is we are seeing politics infusing themselves into our markets a little bit. And on the air today i heard is that leg down because bernie is in the hospital and warren might be the candidate this is stuff we will hear the next year or so and it may have impact. Or until eriarnings start. When there is a void of something fundamental, the markets trade off whatever you give them. Do we think earnings are decent the Third Quarter given what weve had so far, micron, carnival, fedex, color ox taking down guidance. Delta saying costs are high are. I dont know. I thought delta is a bit overdone but on a day like today doesnt matter things get overdone and the pendulum swings far. Im interested to see what the banks tell us, not so much what happened during this past quarter but what they are seeing not just for their own business which is really important obviously. But they have a great insight into what is happening in the u. S. Economy that will be really interesting. The autos kind of rolling over dont love that either but i do i totally agree with steve. We need thats the main thing to me. The main piece of data when i buy the stock is what are the fundamentals of the company . Not warren or who is ahead or but also look, we started off the show saying where are we is this the same way, time to by or sell . Last year we had everyone was raising rates or we were on a raise a higher rate path. Now everyone son pennsylvania lower rate path. Because things are really bad. Doesnt that matter . Here is the thing at a certain point it matters. It doesnt matter now. I dont like the technical setup. I think we have been weak around the 3,000 level when we broke down from there. My issue is that the fed does not have ammo to fight the next recession. Unless he use us the Balance Sheet. Once you use the Balance Sheet thats a whole another pandoras box. Were talking about technical and where we are in the market cycle. I also want to talk about positions which we talk about all the time i think its the most important thing. While we talked about Equity Investors could be considered underinvested in a dwchlt process you look at the data i get from brokers toemgts gross capital at Balance Sheet, the size of capital at work. How much exposure is in the market were in the 95th percent ill they may be more net neutral and maybe not net long in the ways they have been in the past but they have a bigger Balance Sheet which is dangerous at times of higher risk which whatever you want to say about where we are, we have so many more factors out there that could be things to be worried about. And the fact the Hedge Fund Community is near what would be seen extreme levels in terms of overall Balance Sheet. I dont like that in the Fourth Quarter. In other words be, if there is a sell sayings situation head or the exits then we see all that money coming out. I see we guys as things change into year end and some guys might not make it into year end you were seeing the weak he were hands and stock to catch a bit on short covering. But youre supposed to simplify during a difficult period, not get more complicated i think there are guys becoming more complicated yeah, again, i dont think it helps market participantsthat the president , you knowious just yelling at everybody all day on our Network Every network i think back to 0u9 2009 when we were in the throes of the worst sell off we had in a long long time and we had a president who was calm, just said that sort of thing. Those are the sorts of things that will be helpful Going Forward. I think this is something that you guys better get used to because this is going to happen here on out. On a daily basis as we get into the end of this year and dsh zbloosh but with when had a president yelling at everyone and market went to alltime highs the market hasnt done anything in 18 months. It went to all time highs under every other president. I dont think thats the litmus test. You dig in once earnings. Hold on. Sno but the point is but yelling at the fed and trying to kind of get them to do something that may not be particularly natural. You said you better be aware of something wave been wore of this weve had a president. Youve been complaining about the president last four years went to alltime highs thats the point thats not the litmus test he may preside over one of the worst selloffs we have seen in decade too because the policy haves catching up to him thats a really important point. Last word last word were moving on. Back to what youre both talking about is where politics inject and where they havent mattered think about what were actually starting to contemplate if you get any change from this Administration None of it is good onof it is good for the market is what im saying in terms of what you have in terms of legislation taxation hasnt. Hasnt been good for 18 months and not good for the economy. Im not making the call on that what im saying from here on out if you change the prokt of the status quo, the market is not liking it. Okay. One of wall streets biggest bulls believes the market is overreacting to recession fierce chris harvey head much Wells Fargo Securities you say that on a day like today might be time to put money to work on the pullback. What we are looking for we saw the ism manufacturing. Well get servicing tomorrow for in line i expect the equity market to start to sell off a bit more we get pennsylvania 1, 2 sell off then its interesting. 28. 57, 28, 25. Then the risk reward changes we like stocks when theyre lower not higher furthermore, the sfup into tariff or trade negotiation is pennsylvania lot more productive we think something nonnegative is coming out of that. And you can see a bounce so were looking for that negative news to come out. Were looking for that washout to occur if it is we look to take advantage. Does your view on the trade negotiations coming up later this month and almost a week from now, change at all given what has gone on with the president . And again, were trying not to be a political show. But this obviously impacts how the president goes into the negotiations right, so we have always said that trade negotiations is a second half type of thing. And so as we get closer to the election you need more and more certainty. The one thing we keep hearing is there is so much uncertainty we dont know Going Forward you need more certainty. I think the president is very could go nizant of the fact. He he is also could go nizant is the economy is a difficult spot and you could put your sfres and push it over they need more progress if you look at it he has impeachment to deal with the economy slowing down he has more stress with overseas issues he needs a win in the shortterm whafrpg he needs so momentum going into 2020. And that kind of forces him to get a deal on the table. Furthermore with, if you think about this, if he doesnt get a deal on the table, the economy slows down somebody elses name goes upon a trade resolution and i think that would be infuturing to him because he has done heavy lifting to get the deal on the table. You base country turned bullish a little bit earlier this year was it april or so april or so, thats right. And so since sthen is part of that bullishness predicated on this notion of a stock market present . Because it seems like everybody frg you talked about just now when it comes to a trade deal has to do with trump wanting to be the one to claim yit, trump not wanting the kplee to slow down further, not wanting the stock market going down more. The commentary before the political, tim, i agree with you. Politics are now starting to come into play we havent provides to do np i dont think were ready to price it in. I dont think warren or bidden are enough of a threat but Going Forward, the per slepgs start to wax and wane opinion and were seeing that if we get a change in leadership and trade negotiations dont go as planned, ism service is worse then rethink things with but all the bond proxies moved all the low vol moved. This is not Fourth Quarter of 18 hitting underperform this is different. People moved into a cash is king good mental healthty the train pain trade is for the reinflation trade to occur. Even with that said with the waxing and waning and political pressures you stand by financials which upgraded in september. Upgraded in september what we wanted to do when rates are low a lot of pain in there, bad news, valuation is attractive the underlying fd are okay we had a conference numbers came down a little bit. And we think overall the fundamentals are in decent shape, not fantastic but decent and for the valuation we think its a pretty good risk we reward. Chris, great to see you chris harvey of wells fargo. You like what chris had to say. I like the financials im long this has been a terrible week the last two days, i guess but i think that what has started as the rotation out of growth at any price toward value continues. And this is an area of i think very good value. Yeah, 4. 8 down in two days in banks someone was right a couple days ago and doesnt owe the doesnt feel so right now. I dont know the right trade on banks. But i tend to agree on the Balance Sheets and the shall swral rotation we saw which should include banks some late cycle cyclety. I think thats a fair trade. But across some of the other sectors its clear the defensive sectors have been not yesterdays trade theyve been the last nine months trade pan therefore i do think the market is populationed defensively. What do you think happens if you think about this turning lower like we did in 2018 and the q 47 when koermgss went to one. Almost every risk asset went down you have xlu and staples two of the best performing sectors in the s p 500 trying trading at alltime highs outperforming the broad market what do you think they do . If you leave expensive growth right now, what are you doing with expensive no Growth Stocks like to me i actually i heard all day long tony divider on last night talk bag how different it is. It doesnt really matter if the stock market goes down and snowballs these may lead the way and the other things come coming out theyre not going back right away. I dont think it makes sense to be complacent 5 from the alltime highs what has me worried if we dont get a deal some type of deal in the next week and earnings are flat and start to really see the fundamentals shrinking there, i dont like the way the technical setup has been extremely negative and the fed does not have enough to fight off recession this time around so well know in the next couple of woks where the market is going. Thats the weakness im worried about. All right coming up tesla shares under pressure. The Company Announcing new delivery numbers well bring you the latest later, more on the big selloff and what means for the feds next move. Live from new york citys times square much more fast money after this 300 miles an hour, thats where i feel normal. Having an annuity tells me my retirement is protected. Learn more at retire your risk dot org. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. High protein. Low sugar. Tastes great high protein. Low sugar. So good high protein. Low sugar. Mmmm, birthday cake pure protein. Find our coupons in sundays paper. Well wak to fast money we have a news alert on tesla the tok down almost 4 in the after hours session. Lets get to phil lebeau with the details on the delivery numbers. Phil. Melissa, the numbers fall short of what wall street expected totals deliveries 97,000 vehicles, 7960 oh the model three. The remainder a little oef 17,000 the model s and x if you take that 97,000 by the way, the estimate on the street was for 99,000 deliveries but if you take that 97,000 add it with first half deliveries, year to date this they have delivered just over 255,000 vehicles, which means they need to deliver about 105,000 vehicles in order to hit guidance that has been delivered and they stuck with all year of full year deliveries of between 360 and 400,000 vehicles again, tesla falling short of wahl estimates for q 3 tlaefrs the estimate was for 99,000 deliveries they came in at 97,000 melissa, back to you. All right, phil thaengs phil joining with us the the latest on teslas delivery numbers after close of Third Quarter. 105,000 remaining. To get the bottom end of a raenl. Right. That they announced. I will still short the name its interesting how we choose to focus on deliveries and other times we dont care. The fact that elon musk said in february he annualized at 500,000 before getting kicked off twitter. Tells you the numbers are all over the place and they are not making the numbers thats not why i would be short the company. Id be short because they cant make a profitable car. They are not profitable. I want to see the off billion sheet liabilities and see how long they can operate and if Capital Markets go bad that would abbig problem for the company. The move in the stock is really not huge. Not trying to polls for tesla. No its not. Yesterday finished higher today outperforming relative to the down day in the markets. Down 4 in the context of things is like flat. Right thats flat for tesla. I think that actually given how out of favor money losing businesses are right now. Right. Theyre growing and sexy and whatever and have a charismatic leader it trades well. But we were talking. Nhtsa asked for information regarding the summon feature because there are the virals videos over twitter about people using the summon feature calling a parked car to come to you. And there were near accidents, all sorts of things that tesla im sure didnt want to happen. I think its a testament. Tim said before a lot of the underprormd performers performed lately people reaching for beta tesla has a 27 Short Interest down 28 this is fitting the bill for people betting against it for a long time. The tax credit thats rolling off for good come january 1st. Whatever they did in tlaefrs i think a lot of that, healthiy poerpgs was pulled forward i won be of an ver there it has a world of competition but also has a Short Interest that any hint or any sniff of positive news, the stock can rally. Yeah, i think tim hit the nail on the head this is a company if this is one of the worst situations from the Balance Sheet standpoint and also the product that they sell if we went into rece