We are just 43 days away from the most wonderful time of year. We found out today that the rally will continue into next year setting a year end target of 4300. The question tonight, is santa claus really coming to town or will the grinch steal christmas, guy . With you folks with kids in the room, i will give you a fut secon few seconds to have them lead. I am in the grinch box that was a great tune that bobby helms sang all of the great things, the market is still expensive. In terms of market cap gdp north of 175 which is by any metric the far end of the curve i dont see it getting there i have been wrong before and probably will began. But the vix cant correct all of the things going into january of next year. I am in the grinch camp but bore l Boris Karloff did a good job. Technology finished the day strong we saw a comeback of the trade that looked like it was unwinding. Yeah, may the winter war lock, the heat miser, snow miser, hear it, santa is coming. Its opposite day today relative to yesterday when everybody said it was going to be value over growth for the foreseeable we saw this back in may. Dont get too far away from the mega cap tech stocks as long as rates stay where they are and the fed remains accommodateive, and they have to, tech support as we sit right now this is a fantastic backdrop for equity. We will get some stimulus. It may not be what people want a lot of people on main street are still hurting, but equities will move higher what we have seen in the past few days is an extraordinary rise in rates without any action from the feds. So, dan, where do you stand . This may surprise some of our viewers, but i am in the grinch camp s p 500 is up 10. 5 already on the year not far from the all time highs. The nasdaq is oup more than 30 . We have to take stock of where we are markets dont like uncertainty they are acting mighty complacent at the moment when you consider the election was one of the big things and it was going to determine whether we have the higher taxes and stimulus and possibly a new fed chair. We have a president of the United States who has not conceded the election. By all accounts, things could get dicey. There is optimism about a vaccine and the timeline for it, but we dont know when it will be commercially available. I suspect it will be a while and dealing with this virus might be some of the worst of 2020 put that together and i dont see a great case for going out and buying the market until we get more clarity you may get that rally, but it may be closer to Christmas Karen i am going in the santa camp, a few reasons why. We got a glimpse of what the markets can do on monday with the pfizer move. I think we will see additional moves like that and the stocks rally again. We have seen that where the bellwether does well and the stocks rally and then it happens again on the same news. When i think about the risk, the fed i dont think is a risk. I dont think they are changing policy at all. I think about could we have some trade issues even if we do, they wont have the same bang to the buck to the down side because there is a perception that we will likely be dealing with a new administration that doesnt concern me either i think we will have more clarity on the election. To me the biggest risk will be if we see bad data, but i dont think that will happen so i am in the santa cap guy, how should we think about growth to value rotation, the tech to the rest of the market rotation we saw in the last couple of days and longer for that matter and whether or not we believe in a year end market rally do we need to have the bounceback in tech in order to believe that the markets overall will go higher since we had this conversation last night and i saw trb, the reformed broker spoke to us a few days ago on closing bell. We have had a lot of head fakes on return to growth from value what we saw last week was that same thing, a bit of a head fake in terms of the broader market, when you look at the s p 500, its too expensive here in my opinion. I try to be as optimistic as everyone, but i also try to look at the entire picture and there are head winds we are not pricing in if President Trump has in fact lost this election and watches the market rally on the back of that, i have got to believe that somebody that has prided himself on the market rally predicated on his administration alone, that has to cause consternation, but clearly to me the 23 vix is not pricing that in. Do you think it is not pricing in or we did and here we are now, tim i think you are referencing a 14. 5 pullback in the nasdaq we had in september, another 11 pullback we had into october so, you know, you could make an argument that we had that correction those were very violent moves and we have been making lower highs. I cant tell you that the world is a happy place, but i can tell that you we are basically in a place where we priced in manufacturing. Pmi services are still yet surprisingly to the upside still a long way to go on more progress as karen said, the headlines around vaccine are going to be good i dont think we are going to see a reverse course at least in the because i think we have given a bogey on stocks until 2022 i think the biggest part is some guidance into 2021 and we will have to wait until next earnings season good arguments. What do you say mr. Grinch, dan nathan what did tim say, we are going to throw out valuation until 2022 i am not mocking you, tim. Just saying thats the point the stock market in 2019, s p 500 went up 30 and no Earnings Growth in 2018 we are expected to be down maybe 20 year over year in 2020 and the market is up 10 take Goldman Sachs target for whatever it was for 2022, and we will have 25 growth going back to 2018 levels i will give you a trade here look at apple, probably one of the most constructive charts in the market, made the high of 138 on september 2, made a series of high or lows over the last month and a half in that nasdaq selloff period. You want to get a santa rally, this is where you do it much this thing looks like its poised to break out and the other two phones breaking out friday lets go to mandy xu. Great to have you with us. Great to be on the show we have been tracking the vix closely and it is 23 could you put the market moves into the context of what we have seen in volatility and what this tells you about the markets going to year end . Sure. I heard you guys talk at length about the potential santa rally. The point i would make is with the market being up is not enough for Institutional Investors. What matters is the sector leadership of that rally over the past week we had a strong stock Market Reaction to both the election and vaccine, but investor performance has been mixed equity hedge funds and managers had one of the best days on record with a vaccine driven record, they had one of their best days on record. It comes down to growth versus value and how people are positioned going into year end i would say going into last week, most Institutional Investors were overweight, the growth sectors in particular growth and health care those were the biggest beneficiaries of the election result people were well positioned for last weeks rally but were not well positioned for this weeks rally which was led by the beaten down value sectors. That means most Institutional Investors are not only overweight, but many of them are over what will lead us on the way growth or value . Thats the key question and will determine a lot of perform aps numbers for equity funds mandy, thanks for being here, tim mentioned that valuations will probably not matter until the middle part of 2022. If thats the case and the fed has our backs, is it just full speed ahead and any fundamental work you would like to do gets pushed aside i think fed is not enough i think at this current time you need good vaccine news one of the things we are recommending is i think if a vaccine comes out this week is a big deal and going to year end will be a catalyst time in terms of further vaccine news. So we have recurrent data from kaiser where we are expecting more data out of pfizer and moderna. News that cannot only drive the market higher but sustained value. We are setting daily records in terms of covid cases the pandemic is racing out of control much no signs of support. What we have been recommending clients do is dont rotate out of your tech or Growth Holdings yet but find some hedges in the boat endown value sectors. This is looking particularly attractive right now because volatility levels have covered so much. Vix has gone from a high of 40 preelection to now 23, so that makes outright option buying much cheaper now if i overlay some piece of the tail hedges on top of the Core Holdings in apple, amazon, thats the setup you want to have going into the end or potential catalyst that could drive a value rotation its tim. You say institutions say the feds are not enough. What do you need from the back row or sector wise what do you want to lead us right now . What you want to see is progress in terms of fiscal stimulus that will be huge. In the past week we have seen certain headlines from Mitch Mcconnell saying they are working on it and there is progressbut they have been saying that for months i would like to see more positive vaccine data from the other vaccinemakers, astrazeneca and moderna. Only then can your life return to normal. With just the pfizer data we are still looking at the second half of next year for people to get vaccinated what will happen in the meantime we still need full support those are the two things i am watching for not to say the fed is not important, but they will be the backstop, there to provide liquidity. Nothing has changed on that front. What needs to change is more on the fiscal front mandy, you gave a lot of caveats to market performance. Would you fall more into the santa camp or grinch camp . I fall more into stay long with growth and tech sector camp until we get more positive news. I think the market will go higher to year end mostly because of tech, but we need to see more positive data before we can see a sustained value rotation mandy is a terrific guest but doesnt play the game. I respect that the key point she is making is a lot of the trades can be made because volatility is so low, an opportunity to use that in your favor. Right at least she would you rather her sell right she would be banned. I am always long and i will look to put on protection so that allows me to be primarily long if we get good news on the vaccine, then the rotation will happen, the nasdaq will fall those stocks weigh more heavily on the s p the monolith may go down, but the market is more broad than those tech names they could go up i am still firmly santa. Coming up, the ceo stock sale that got all of our traders talking. But first, alibaba, erthe could be big dangers for the chinese tech sector. Welcome back to fast money. Alibaba topped 47. 1 billion over the event. Look what happened to alibaba on the hong kong. They fell after a chinese crackdown on the government. Debo it has been all about those huge numbers that show the reach of internet giants but this time it may be more of a riskier flex beijing put the countrys tech times on notice issuing rules aimed at ruling out monopoly practices. They went down between 7 to 10 in just one session. Alibaba has been unpressure. The tech giant also faces a different landscape. And it could be a new era for chinese tech, not unlike what we are seeing for our own American Tech Companies the president of alibaba told me earlier today that transparency will be key. We need transparency so the investors, regulators, everyone else can see the rules by which the game will be played. Thats where we are headed over the last decade or more, the giants have been seen as national champions, evidence of chinas tech prowess and perhaps passing their american counterparts but now it is suggested that beijing things they are too big and wants to rein them in perhaps giving a new crop of companies a chance one thought that as national champions, firms like alibaba, were backed by a Chinese Government and now violators could be forced to die vest of intellectual property. Debo brought up a good point. This is a doj equivalent the guys investing in merging markets and seen governments dismantle companies that got too big, whether Oil Companies in russia or Power Companies in brazil i think the regulator has to evolve on the fly. I dont think they will be tearing these companies apart. I think this is an opportunity china wants these companies to be global and dominant and want them to work with the next wave of chinese Tech Companies coming yes, there will be competitive influences but the context is that these regulations came it changed the rules where it may not be as valuable as it once was. I think thats true ant, the best outcome is there are no new regulations but you have to think how far the stock has fallen them being national champions, this is a spanking for jack ma, and i think ultimately, i dont know how much of a difference it will make in how powerful they are. When i look at how much the stock has come down. If i owned none, i would buy a fair amount. I own quite a lot. My next action would be to add i dont know how long it will take to solve this, but in my experience panicking on news like this isnt the right thing to do. Maybe this time it is the right thing. But look at the antitrust with google, stock traded up. Facebook, stock traded up. I am not going to trade out of it if i owned none, i would buy it here a luckily timed stock sale netting pfizer ceo big gains but should it also raise eyebrows and later, the new Concept Store from chipotle that has shares soaring going to tell you about exciting plans available to anyone with medicare. Many plans provide broad coverage and still may save you money on monthly premiums and Prescription Drugs. With original medicare youre covered for hospital stays and Doctor Office visits, but you have to meet a deductible for each and then, youre still responsible for 20 percent of the cost. Next, lets look at a Medicare Supplement plan. As you can see they cover the same things as original medicare, and they also cover your medicare deductibles and coinsurance, but they often have higher monthly premiums and no Prescription Drug coverage. Now, lets take a look a humanas Medicare Advantage plans. 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There is no obligation, so call the number on your screen right now to see if your doctor is in our network, to find out if you can save on your prescriptions, and to get our free decision guide. Humana a more human way to healthcare. Welcome back to fast money. We are following a developing story on pfizer. The company ceo unloading a large chunk of stock on the same day they announced a breakthrough on a vaccine. It is showed that he sold about 5. 6 million in stock their stock jumped closing the day up about 8 . The details are that he sold 132,508 shares undat approximately. 41. 94. It is pointed out he still owns 15 million in pfizer shares they say this there is a debate whether these things are appropriate they are legal under these plans, not based on Insider Information happening with data, but you are starting to see a debate over these things because you see it with other companies. This was tweeted out today of course, we have been having this debate since the pandemic began corporate hygiene. Ser chairman says this the debate continues thank you, meg. Karen, when i first saw the story i texted su. What is your take away on this i have such goodwill towards the guy. I think the 10b5 the stock was trading at 20. Not like it went up to 100 he is a great trader buy the pandemic and sell the great day for humanity good for him i am not so troubled by it maybe it would have been better one day later. Tim, you are a bit skeptical. Into one of those analysts comments was like he has done so much for mankind, who cares. I have no particular insight into whether this was manipulated or not you can have a 10b5 in place and can manipulate when you release information. We will find out let others do their job. He was particularly laudatory and almost hyperbolic i thought when talking about this. It is massive. Is it the most important medical achievement in the last 100 years . Some people could say that, but he was vocal about the importance of the moment at a time he was incented to do so. Lets bring in lisa. It seems like every companys defense i dont want to say defense because that implies guilt. But their response was there is a 10abob5 plan in place. What questions might the sec ask . The sec it lock at thok at t and say thats good evidence that the plan was in place and the officer didnt trade on inside information he had that day. But that doesnt tell you anything about whether 1 the plan was based on inside information. We have to go back to august 19 when this plan was put in place. So the sec staff could easily look at whether that plan was established based on information that dr. Bourla had at that time he would also dont know based on the informati