Run. First, we start off with the brick and slaughter that went down today sinking more than 2 and amazon launches its prime wardrobe program. Nordstr nordstrom, j. C. Penny, chico getting slammed. Could this be the final nail in the coffin for traditional retail. For a lot of them, absolutely we give dan nathan a lot of crude, but you got to give him credit op this one he said the etf, worst chart hes ever seen ch he was right good for dan is it the nail in the coffin for a lot of these folk, yes weve been cyst enter on that. What ive been wrong on has been target i thought they held a huge level. The same low we made in 2014 and it looked like they were in terms of the stock, turning the corner a bit obviously, this thus came out u and its all bets are off. But where would i go i still think target is is interesting. But i think you got to buy it now to break it above 55 some is is just a mechanical reaction to last fridays news a Analyst Community weighing in. You had a bunch of downgrades. Is it the final nail not sure, but these are folks that have fundamental and secular issues fundamental side is were still way too oversupplied probably five times as much Square Footage per capita in the u. S. Than you have in japan an europe and that tells you something a at a time when you have deflation nair head winters in the form of food prices, the costs coming out of china and other parts of the world we havent talked about what exactly it is, but theer etically, you order a bunch of stuff, they give you a discount on the stuff you keep. Theyve got this camera you can sort of try on clothe, but could this hasten the decline in retail weve already seen . Sure, its a prime world, but when you look at the xrt and chart it against amazon, core related. When yoi loyou look at a name lk best buy, we threw it out years ago. The its up 20 . So when you start going fishing, sometimes, its in the most unlikely spots j. C. Penny negative story sears. Horrific, but its been going out of be business for years got one foot in the grave. Im j. C. Penny i know what my risk is id probably take a flir out on macys getting time for a lot of these names. I think when you look at some of these names, you have to see who really is amazon proof at this point this time thats really what this comes down to. Most of these names when you look at the dprxrt, most are go to be affected by whats going on with amazon and how unbelievable they run. Big box name, a different story. Everybody bs been all over this costco story this is going to hurt them i disagree have i bought costco yet in because i think theres enough pleasure. Youre still long the expreerns that draws people into the store. I think partenkirchen of it the other part, the private label. Going out on saturday why is that . They offer gasoline at a cheaper price. Thats one more excuse and then people go into the store the membership idea is well. Its a different client for the most part. And both buy iing and thats why it seems like some of these big box types, the home depots of the world have more. You can both buy on amazon prime. You can, but do you want to yeah. So i dont have to slep it around inside a cart in a warehouse. Its a very different thing thats where you get inpyspired i have say to myself, stay focused. Only game in here for duct tape. Lets be clear. What are you doing with duct tape can i Say Something else, too, about the xrt you look at this on a relative value perspective. From the lows of 2009 to the s p, the xrt outperformed the s p by 142 to the peek aak my point is that there was a lopg period where retail really yut performed this market. They had an enormous run and youre probably going to see shom shakeout here and an overreaction to the downside is there a retailer, apparel and soft goods that you think is unamazonable not certain or less likely. Ive never shopped that before but you know, chess king is out of business. Two for taylor. When i can see. What i was going to say is im with these guys on the costco front you think 90 retention rate for memberships. They can raise prices. They raise prices on pete tomorrow, hes still going to costco and the vertical integration side of it they own the poultry and beef. When you look at the Owner Operator side, they have everything sort of in this vertical that makes them competitive to the amazons of the world. If there is such a thing as being come pet ty. Zwl then maybe it makes sense that amazon is going to have its own generic brands this is why the package food guys are selling off the whole part of this story is theyre going to be able to understand in better o or real time what te stores can stock their shelves with in terms of whole foods and amazon, im catching up a little bit because i was away for a kouchl days. We could probably do this one every day and still havedevelop. You look at whole foods, you dont know where this story is going to play out. You dont know what theyre going to use those 440 some odd stores to really penetrate with Distribution Centers or not. But i think walmart is the best to compete against that. News alert on whirlpool and ceo. Dom . The ceo is stepping down at whirlpool. This is again jeff fetic, whos been the ceo since 2004. Is stepping down from his role he will remain chairman of the board, but relen quish the daytoday management duties to mark bitzer, the current president and coo of the company. Over the skeep of thing, its up about 7 year to date, 9 over the past 12 months closely tied to the housing economy, one weve seen do well in terms of share price companies, but still, a big proxy. This case here, a long time ceo, long time operator of the company, a career man, has been there since 81. Will remain chairman mark bitzer will resume the ceo role thank you in the news room with the news on whirlpool you like the homebuilders, the home space i do like the home space and when you look at whirlpool, its flirting with those all time highs back to 2015, so its around 217 or 220 still long palty kb homes, still long on that up in the high 30 p percents as we mentioned before, while amazon has crushed most of the retailers out there, shares of home dee toe just set all time highs, so it safe from amazons wrath . Who better to ask dhan the ceo wow, you guys, i wanted to jump in here early on. You should have when you were talking about nails in the coffin, im thinking as long as you get them at home depot. Also buy the wood there, too. Absolutely. Bob, in terms of our thinking that home depot or investors thinking generally that home depot is unamazonable, is that too simplistic i dont think you ever want to take a position youre unamazonable, if thats the right term i think complacency is the worst thing that happens today, certainly in retail. I think home depot has, craig is is doing a fabulous job there. They have like 2,000 plus stores so, they dont really need a warehouse. I mean, theyre using the clicks and the bricks and the clicks together you could order your mulch on wednesday. Go pick it up on saturday. And now, youre not wasting time getting distracted in the alisl and youre doing your honey do list on saturday theyve increased their online availability their selection. If you like three that are in the store, you can get 25 varieties of colors of fit and finish online, so theyre doing a great job and they make the stores, their Capital Allocation has been great theyre able to redeploy that and keep it fresh, aspirational, great point of sale, plan of gramming, et cetera. If if theyve got a great digital strategy, which theyre executing on, why cant amazon do the same thing with all the stuff that home depot is selling. Because part of it is when you go into the store, you do like you know, you do like the experience, right . You like the experience, the pros one of the things we did when we were there is create a whole line for the pro contractor, which you know, allowed us to when they were doing one home, three home, they were leaving us to we created home depot supply to extend our business we believed in enhancing the core, extending the business and the core so i dont think you should be comfort bable, but thats a great team doing a great job one of the arguments weve made, i think all of us have said home depot does well when the Housing Market is strong, also when it slows down. Are we accurate and if so, can you speak to that . Weve seen home depot go through a variety of psychs and the mentality, theres an investment mentality, that when housing prices go up, people invest to do a bathroom, a kitchen. They flip it and quite honestly, they were making more money flipping than they were in the market at that time, so thats an investment mentality, then a maintenance mental think, where in the trough, if it doesnt broken, dont fix it, but were still going to get good customer traffic. Our philosophy was if we could increase one buck a cart, right, one buck a cart, so wed say, buck, buck, but, kind of thing, it would be 1. 8 billion we train the associates to sell the project. If youre coming in for a gallon of paint do you have the brushes . You dont want to make two trips. Dont want them to go to the local convenient, those other stores i dont want to mention, so you sell the project and when you do that, your sales per basket per square foot went up with that in mind, is home depot more profitable than ever its quite expensive relative to its history. I think its prominent. One of the thipgs we didnt talk about is we were able to disintermediate a number of suppliers. So glacier bay rinld ridge, all are house brands, owned by home depot, so we were able to get a margin pop by taking control of those things we took 50 of the market share away from hunter fans when we introduced hampton bay thats how we were able to get margin, customer satisfaction. Much more aspiration al the Shopping Experience was much more aspirational and again, i think more suited to the men, pro men here like this that changed when they came into a home depot did you ever think youd see craftsman sold at a local Hardware Store at a discount ill mention i couldnt believe i saw it at ace hardware used to be you know, one of the most prestigious coveted brands around were having a spirited discussion about costco. A lot of bulls here on the desk. What do you think of costco and do you think that has a mote enough to fend off amazon . What you didnt mention when talking about costco is box. Boxed. I was over in one of their warehouses in new jersey a couple of weeks ago. They are the online dedicated competitor to costco all they ship bulk no membership fee, no shipping charge when we were at home depot, we analyzed costco. Almost their total profit bability, this may be dated, was off of membership. Thats where they made most of their money. If you do the analysis, it may have changed, but thats what we saw. Costco was always the Treasure Hunt we learned a lot from costco because if you didnt go in, you knew you might miss something because they brought stuff in and out, so stack it high and watch it fly kind of mentality theb they had the fence line, which was seasonal and then, great deals, great bargains, afford bable price, good quality and they got to make sure what got them here, youn, may not get them there, but they cant lose that heritage. They cant let the traditional if they dont pull customers in, theyre going to miss out on that elegant watch or something they just brought in got to make sure theyre bringing in prugt Consumers Want s. Good to see you thanks for coming back. First time. Not just me all of us have been. You look at their last quarter in middle of may, this is what i look at. Inventories were up 3 year over year sales growth was up almost 5 . So their inventory, keeping them low, margins continue to improve. Every quarter, they beat on comps. 19. 5 times forward earnings, yeah, you can make an argument its expensive i got to say this. During his tenure, they hired 35,000 u. S. Veterans to work at home depot, which i have to bring up because i think remarkable i think if you like the housing trade, you started the segment off, if you like the housing trade, it would be disingenuous to say sell home depot. P if you think the housing recovery has further lebts to go, its going to trade right with it. If you chart both of them, theyre lock step in unison. Yeah, i think its a little expensive. 22 times, what a Great Company like steve said, the correlation closer to 60 . These gois, thats a volatile number, but its going hire. A dollar in home depot or dollar in costco not just because of that. The same thing as costco with vertical integration, but theyre more innovative than people think, so theres a lot of Different Things theyre doing right and speeding up the check out. As a guy whos there all the time, the check out is important. See thanks, bob i gave him the dollar coming up, crude plunging today, officially entering a bear market. But is there a bottom, the year to explain plus, fedex earnings after the bell and the ceo just said Something Interesting about amazon well bring you the details and david faber will join us after sitting down with alibaba. Much more fast money still ahead. David faber sitting down with jack ma moments ago in an exclusive interview. As executive chairman of alba bah, he tends to think of things in the future. Not focused on quarter to quarter. Hes focused on 025, even ten to 20 years from now. So our conversation turned to the idea of jobs hes saying theyre going create a lot of jobs here in the United States something he promised donald trump when the two met this year by enabling Small Businesses to sell to their rising middle class of over 300 Million People in china our conversation turned to jobs overall and perhaps what would be the replacement of those jobs through machine learning, robotics and ai. One thing he had to say about ai, it wont replace in his opinion, human intelligence. Its about wisdom and experience i dont think the Artificial Intelligence is going to replace the wisdom i just continue to wonder what that world will look over the next 30 years. Its going to be painful because the knowledge is not enough the wisdom is is not enough, so the new way of coming, the jobs taking our way some people who catch up the way will be b rich will be more successful. Some people will be more painful. The government, you know, the world is going to be dateded the people will know have nor data than the bosses data will be the thing that runs machines. Really, data is going to be everything and alibaba certainly picking up a lot of it now, but guys, hes talking b about a word we hear it so often as we talk about the future of the internet of things and all these devices providing so much data, that will be used by Artificial Intelligence to power even more data drif p software and Cloud Services in that. Alibaba has been investing heavily in the use of ai when it comes to health care to expand their cloud offerings in china as well as in europe how big of a driver does he think that is going to be in the Cloud Business of course expanding it, not making a lot of money in it, but he thinks its going to be exe treemly important. As he does all Financial Services we talked so often with mr. Ma about alibaba, but we fail td to talk to him, at least i was able to talk to him about anthem, one of the Largest Companies in china not yet going public he thinks it will with become larger in many ways than alibaba clirnt currently is, but wouldnt say when that ipo will actually hit the mark fr in the event there david is to get Small Businesses, to be on the platform to sell their pru products to china. Any thoughts on what the tax policy could mean for Small Businesses and their ability to be on that platform and sell more yeah, theyre here evan jellizing for globalism, which is interesting because we have an administration that certainly people would not think of in that light, and yet their meeting in which he promised a million jobs over time from alibabas presence here in the United States, he believes will be something that benefits both here and of course the Chinese Consumer no real discussion of tax, but he did say you know, his meeting with trump, he felt was a very good one as we all know. When you promise a million jobs, the president is going to listen closely. Theyre now starting to put that plan melissa in place. This is the first big event theyre trying to do of selling a lot of stuff to a rising chinese mild class thank you so much david faber from detroit and you can catch the exclusive interview with jack ma tomorrow at 9 00 a. M. Eastern time here on cnbc. We have coined in instead of fang, stab b the a being alibaba. Whats your pick i said it before, stab. I think theres more outside pick one of the four. Of the stabs. Of the stabs. I thought we were picking one of the other. I think theres plenty upside there. China tech has done better than u. S. Tech an look at alibaba and the problem is the corps get tough. Theyre aggressively trying to take market share. Cloud is going to go from 200 growth, but they have so many levers to pull, including financial and uku digital media. Up 57 year to date im long, so i have to pick that one. I think youre seeing what happened to amazon ive been in and out since the 190 price tag. I think youre seeing a redo ofry stab or fang. Fang because dont do it just because because you know you want to go with stab. I dont know with s is. Kidding. Its a joke. You look at me with that face. I just said it also tim and steve have been on alibaba for some time. If you believe their fiscal 2018 guidance, then the stock hit 128 tlrs 138 is ridiculously cheap. I dont know if i believe it just say federal government you do, then the stock is dheep. Speaking of chinese stocks, the fourth time was the charm for the chinese mainland stock market, finally getting adding to a key index well tell you what it could mean to china in particular. Youre watching fast money on cnbc in the meantime, heres what else is coming up on fast. Crude just entered a bear market so, why is ubs saying to buy Energy Shares . Yep, you heard us right and the man behind the call will be here to explain what has him bu