The nasdaq pulling away from alltime highs, the apple one of the five big stocks posting a gain today but while big tech tumbled, the rest of the market was better. The s p 500 less than a percent away from a new alltime high and energy and industrials leading the way. So todays market action, is it a sign florithat the great rota is in place. Guy . It would appear that way. And happy monday and i took french in high school and this move was as we used to say [ speaking Foreign Language we get what youre saying. That is what i said at any rate, it is a pretty and kudos to tim and karen theyve been talking about the transportations for a while in terms of the stocks, look at the move in caterpillar today, a few weeks ago you played trade it or fade it with karen and boeing was 195 and she correctly said to fade it and we talk about how it would trade down to 160 or so and it overshot down at 154. But look at it today, approaching 180. So i think this is a healthy thing. I think those nasdaq names had a cooloff. And the fact that these industrials deep cyclicals and even the banchs amanks are star move, it is encouraging. And karen, you said that the risk to the market of finding a vaccine sooner and it is that risk that would actually make this rotation even stronger. Right well, weve seen this happen a couple of times and it is sort of false starts. But were starting to see data that, while it is not good, in terms of florida and texas and california, it is better so the rate of change is improving. So that is something i think the market wants to sort of grab on to that and then obviously the hope of a vaccine. And so i think this rotation, i mean, we saw the mother of all work from home stocks zoom which was down today so the names like asquare and the paypal and those names all week long with the big faangs or dans maga and the rotation which retail was really good and that is unusual banks werent as good as i had hoped. It is a nice bounce but they have so far to go as a catchup trade. I think there is more to go there. And guy touched on fedex and ups, i mean there was a big upgrade in fedex but that stock is up well over, well over 100 from the bottom which is kind of crazy so im long fedex but i think this move, the last two days which is about maybe almost 30 points, is probably a little bit over done and the airlines today up huge as well. That one, i wouldnt jump on that bandwagon im staying on fedex even though it is getting rich but im still afraid of the airlines whether you include the debt, the risk reward isnt compelling to me so i think i like the rotation but there is more to come. For fedex and ups there was news and tim youve been hot on the ups trade in terms of aggressive pricing because of the pandemic is causing everything to move think fedex and ups and theyre going to say, were going to charge holiday rates for this and that really adds to the fund ale ales i guess the question is to what point and at what point does this start getting expensive well, i think there is still plenty of room to run on shippers and you talk about the mix also that was more of a retail mix that people thought would be negative for ups and we saw that b to c mix is working in the favor where has this rotation been is it on again is this rotation has, to me, been pretty clear since mid may, and there have been some steps back along the way but it is largely two steps forward. And if you look at the industrials theyve outperformed the nasdaq during that point and when you look at spl of the numbers and fedex as karen pointed out, has outperformed 53 since the same period and if you look at the moves, having come with this think of the earnings that we had in the top of the food chain of the nasdaq two weeks ago and yet youre seeing this performance. If you look at the srt against the s p or the nasdaq and it is outperformed for a long time and retail was supposed to be dead so i dont think the rallies started overnight. And weve spent a lot of time talking about that bridge, that divide, that chasm between growth and value how excited do you get hard to get real excited except for the fact that the multiples should be getting pulled up by what is going on in the rest of the market, not pushed down. With pmi only bottomed in my view, i think you could stay here. Dan i mean the multiples have hold up. Were expecting considerable yearoveryear earning declines and next year will be up yearoveryear but still well below 2019 we dont get to s p peak earnings until 2022. So when you think back to 2019 where the s p 500 appreciated 30 , this year we have material earnings declines and you have a very expensive market on almost every metric you could think of. And when you think about the nasdaq, that he talk about how good the stocks were, theyve done a ton of heavy lifting. Apple is the one that is really curious to me here, the nasdaq 100 felt like it was going to get sloppy this morning but apple is levitating here at 450 people are excited about a four for one stock split. Is this like 1999, people, come on, seriously. I dont get it this stock is hovering just below 2 trillion in market cap, up almost a trillion dollars in market cap from the march lows and this is the thing that is keeping the nasdaq 100 together right now. And listen, the rotation that these guys are talking about, in retail, in industrials, in small caps, in bank stocks, even in energy, is nothing short of impressive with the s p 500 just below the alltime highs so you would like to see the action if you think the s p 500 is building for a breakout because it is not mega cap tech that breaks the s p 500 when you consider how they performed and the inability for the s p 500 to break out. So maybe the best thing for s p bulge right now is that you continue to see the rotation and you continue to see the market trading in a range and then when you get the news on the economy that is based on therapies or based on vaccines, that is when you have the s p 500 finally break out. At the same time, could you make the argument within this value rotation, karen, there are certain big cap tech stocks that fall into this category. And ill throw it out there, dan mentioned apple but maybe the most recent Earnings Report tells you that perhaps apple needs to be rerated and right now is a value stock and falls into that category and so is seeing the benefits ever a rotation, even though it is lumped into the big cap tech monolith well, i guess relative to some of the other i mean, the pe relative to an amazon it is vastly similar but to me the cheapest one of all is facebook. An it is not just a relative cheap. It is cheap to the much broughter s p market so i think even for me right now i feel like the biggest threat to my facebook position is a rotation away from these kind of names. An that is okay. Ill wait. That business is so extraordinary, those numbers were so good, i think even apples numbers were really impressive as well but we struggle with the multiple it is a Hardware Company and what kind of multiple should have it versus the services company. I get that it is a blended one that is moving in the right direction. But it is still seems more expensive to me than facebook. But im long facebook, airplane, google, microsoft, all of them if there is a rotation out, that part of my portfolio is going to hurt. Our next guest is telling his clients to brace for a pullback. Lets bring in Julian Emanuel at btig great to you see what is going to trigger the correction in the nasdaq there are a number of things. First off, weve gotten a loto questions over the last week or two, is this a bubble, is this not a bubble what i would first say is valuation wise it is not a bubble and when you look at the nasdaq and look at faang in particular, what you see is the kind of Earnings Growth and momentum and Free Cash Flow that would lead you to indicate that it isnt a bubble but however, what youve got now is a record concentration in five names and if you look at today, the nasdaq five was really the nasdaq one. But 23 of the weight of the s p 500 index when momentum in those names has clearly slowed, we do think continued tension with china is the most likely catalyst for a pullback in those names. Julien, i know this is nasdaq specific, but in terms of the s p 500, you say it is not a bubble obviously everybody is entitled to their opinion but one thing i would point out in terms of market cap to gdp, youre talking about between 165 and 170 to gdp and the numerators continues to go higher and the denominator, which is gdp continues to go slower and how sustainable is that. That is the one thing Warren Buffett looked at as his indication of where the market is. There is no question that is a concern. And obviously when you think about the sort of the economic back drop, it makes it even more important that the reopening of the economy that were expecting in the fall and going into early next year, is a success. And clearly a lot of the stocks and particularly in recent days the value fames are starting to reflect the greater probability of that as a success i think that is still to be seen and i think obviously one of the issues surrounding all of these questions is where stimulus negotiations go. From our point of view, the belief that people had week ago, that you were going to get a package before the september jobs report, on the 4th of vept september of a trillion to a trillion and a half, we think the market Still Believes that and well just have to see but again, the threat to the economy, to the down side, certainly does stress that relationship hey, julien, it is tim. When we were younger men, yes, that is right, we both invested into the commodity and the resources space and emerging markets. If anything were starting to see some pronounced breaking out of some of those resource stocks with global Commodity Exposure and some is dollar bases and some is pmi and some is stimulus what do you do with this trade and i feel like weve seen this movie before and it is a pretty good movie. So, i think you hold on it for the longterm because ultimately a weaker dollar is part and parcel of a recovering Global Economy however, what i would say is that particularly as surrounds the stimulus negotiations, there is this sort of idea that politicians surprisingly dont want to spend infinitely and that is obviously a lot of the pushback of the last several days so from our point of view, when you look at record bearish positioning in the dollar, we think you get a rally and we dont think it is a coincidence that the dollar was stronger whether gold was choppy. But longterm you want to stay with that theme. Julie and, how much longer, it sounds like not much longer, but there is this notion there is no alternative and karen has mentioned this regarding her own portfolio. But if youre saying there is a pullback and youre recommending that people brace for this, were basically saying that the liquidity train of the fed cant keep this market going higher. Is that your belief . That is correct, melissa. Basically, if you think about what the fed has done, they have basically engineered liquidity, but to move from liquidity to sol solvency, that requires an economic rebound that is only showing tentative signs of occurring, that is the story for how the economy is hopefully going to unfold in the next year and that is what keeps stocks moving forward but the fed, the fed hasnt run out of bullets it is just the effectiveness of the bullets is likely diminishing while we wait for the economy to turn higher julien, great to speak with you. Thank you. Thank you. If you missed the march back toward alltime highs, fear not, the chart master is here with catchup trades. Carter braxton worth, what are you looking at. You bet i have three stocks. Here is the thing. Each is up 100 off the march low. That is double the s p so are they laggards or leaders . It all depends on what youre time frame is. Lets start with a few charts. The first is haines brand. Under wear and tshirt it is a long term established down trend and then again it was 7 at its low and almost 16 it is trouncing the s p. Of course it is laggard because if youre down 30 over a twoyear basis and the market is close to alltime highs, youre lagging. So this is the kind of thing that were looking for something that is behaved aggressively but most importantly broken above the down trend line in effect for the past two to three years. Look at the next one, dupont, it is the exact same circumstance and the kakt same move off the low. It was 28 and here at 58 100 move, twice the performance of the s p, is it a leader well it is for the bounce. But it is a laggard if youre still down 30 , 40 over a two or threeyear period this is what a catchup trade could look like. And final one, look at stld. A steel stock. It is the exact same circumstance again and there are many like this the key is that theyre laggards because theyre down still 30 and 40 plus from the highs of two or three years ago but the daytoday and since the march low performance is aggressive an even juan was very big today relative to the market and the fourth chart, a comparative chart, take a look at all three, they look like railroad tracks. I didnt overlay it or manipulate it, it is what it is. And they have nothing to do with each other it is not about that i could throw a certain tech names in here as well. And then the final chart, it is the same comparative chart of these three stocks, but shows, of course, the s p 500 so here on a twoyear basis these are tremendous laggards that are killing the markets since the march low and are killing the market today more to come to the upside for each of these and there are others carter, thank you, as always. Guy adami, which of these three do you like . You know, i mean because youre in my head. Hanes brands. Of course and why of course. Because it is of course because that is why. Because youre a Steel Dynamics guy and karen can whack up dupont. You got me. The operating margins came in at 17. 4 i mention that because the street was looking at operating margins of about 3. 5 . They crushed it which means theyll have to raise the price targets and bank of america recent upgraded it and i think to carters point despite that it is has moved significantly, there is more room to the upside. Coming up, a ride share ruling what has lyft and uber on the move and kodak plunging as a massive government loan is put on pause. We have the full details when fast money returns 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. Puts its customers a wiin charge . Rier well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Welcome back to fast money. We have a market flash on bed, bath beyond. Falling more than 3. 5 after they will resume the plans to reduce the debt. The company had suspended the Debt Reduction plans because of the pandemic and now will buy up to 300 million of certain outstanding senior notes the tender offers have been put in place and they will expire on september 4th. Again bed, bath and beyond will reduce debt starting today and has planned to buy up to 300,000 of senior notes shares falling 3. 5 after hours. Karen, what do you make of this news . That sounds like sort of a good thing to me i dont know if there was something more to it that they feel like theyre in a Capital Position to buy back debt which must be expensive in that the yield is high, and they feel like they could do it, i think that sounds like a positive. Well keep watching and mean wlooiwhile, uber at on the move following a California Court ruling. Diedra has the latest. Reporter so the courts ruling is stayed for ten days to allow uber and lyft to appeal but it would force them to immediately reclassify drivers as employees in california in a statement, uber said, quote, when over 3 million californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression lyft, for its part, said, quote, drivers do not want to be employees, full stop well immediately appeal this ruling and continue to fight for their independence now if the appeal is not granted and there is no further stay, there is a chance that uber and lyft could shut down the apps entirely in california uber, keep many mind, has over 100,000 drivers and bringing them on as employees im told is nearly impossible. Now the other option is they continue to operate and risk more legal liability as you were saying, shares of uber and lyft are down 1. 5 and 2. 5 respectively in after hours. Regulatory pressures had been building but this is a key battle in one of the most important markets as other states from new york to illinois to massachusetts are looking at similar legislation. And to be cheer, this doesnt just affect ride sharing, theyre pivoting toward food delivery and the classification of those drivers are in the air too. I would think that the stocks would be down even more if this is seen as a true threat to the business particularly for uber. Yeah, i think they said it, the expectation was the outdock, we know that dara, the ceo was penning an oped, making a lot of the points that diedra just mentioned. There isnt a heck of the evidence that they want to be full Time Employees. They like driving for lyft and uber and caviar here and it is interesting to see what happens. Ill mention with lyft, theyre going to report in a couple of days after the close after we saw ubers 75 yearoveryear decline in ride bookings, this is important for lyft theyre only north american ride share. That is why this issue in california is probably more significant to them. But ill just mention this at 7. 5 billion enterprise value, lyft is way too cheap of an asset even with all of the losses they have right now ride sharing, whether these gig economy workers are employees or not, is here to stay and if google wants fitbit tor 2 billion for their data, somebody certainly wants lyft. I would think that the drivers and during a time of pandemic want a job. Whether it be classified as a contractor or full Time Employee im sure theyre not that picky at this point, tim. I think there is a lot of folks that enjoy being an independent contractor and giving them flexibility of how they live their days and deal with their families and what they could do but from a tax perspective. So i agree with what dan is saying and there is a lot of guys that work