Amazon, intel and starbucks just three of the big names reporting in the last few moments and we have a full team covering all of that she is on deck to monitor the amazon call that starts in 30 minutes. Josh lipton in San Francisco listening to the intel call and suzanne lee back at headquaters on the starbucks call. Well check in with everyone at the hour well start with amazon. The last of the faang stocks to report earnings. Sinking after missing estimates by more than a buck. The stock is still up 36 this year so did amazon simply run too far too fast and do you buy the dip or is this the start of a bigger sell off . It would be disingenuous to say i saw this coming because i didnt across the board we were bullish on amazon and i remain so but the biggest story is not the epa miss, revenue beat, guidance for the next quarter, revenue is ahead of schedule. What disappointed me and disappointed the street though is operating margins came in about half of what the street is expecting. The story for the last couple of quarters has been margin improvement. This is clearly a couple of steps back that coupled with the fact that he had a big reversal on things that well talk about later now youre seth up for a google type situation where you see weakness in the name. They are an investment cycle. They spend money like drunken sailors. Sometimes the market says its okay sometimes the market says its not. Heres that situation right the stock ran about 10 or 12 in the last two weeks off of lows from earlier in the month so when you think about what is in the number here or whats in the stock as you have this, most people would be pretty happy with the fact that it was 11 of the total. Part of that was the fact that they missed their operating profit in that division by 85 million bucks which isnt a huge amount on a 1 billion number. 4. 1 billion in sales in that unit but what did we learn from microsoft last week . Theyre gaining some ground. So like this is going to be a more competitive thing aws grew 42 year over year. Was down sequentially and i was a significant deceleration and thats to be expected. They cut prices in may by 7 so we knew there was going to be margin pressure and if you look at aws, that to me has been the marginal difference where people have been able to say everyone know what is amazon is doing in retail and you can put evaluation on it somewhere in the cloud is where people have been giving them a pass so you talk about the cfos on the tape saying our video content will continue to increase sequentially. Ghoe theyre going to spend whatever they can to dominate this space. Prime to support prime and take it to this next level whether its 100 million or 200 million this company has to spend. Its on sale for 33 less than before. Do you buy it here no, the stock is up 40 year to date. To dans point it ran up along with Everything Else the 50 day moving average, 994 i dont think theres a rush in to buy this stock. They didnt want to turn them on right now its a cycle right now. All of these faangs ran up into the print facebook did. Alphabet did and alphabet sold off so was it netflix after the print it was up 10 so theres things you doubt and things you dont doubt amazon is in the doubting camp is it still bright ahead yes. Do you agree to wait . You have to digest a little bit. We had two massive announcements. 14 billion bid for a bricks and mortar super market. They did a deal with nike thats going to be a blockbuster thing. How many echo devices did they sell im not a bull on this story im a bull on the story but not a bull on the stock. Thats important to remember everything theyre doing on the strategic front is great for us as consumers they probably have 80 Million Consumers in the u. S. That are prime customers and sold more voice devices. Theyre going to put that in front of you before google does or am does. Do you feel like you missed amazon, its up 40 but its a 1 t 1,000 stock its 155 name thats the way you play this. What does that have to do with it . For me i can buy more and when its up 75 its a big difference versus up 39 . I love alibaba and if im looking for relative growth thats it. I dont think amazons issue is the dollar price in the stock. No, right now one is up 39 one is up 75 and if you think india is going to be a great story for amazon, china is the growth story for alibaba and amazon isnt going to have an easy time in china. The two things that dan is pointing out, hes not necessarily in love with the stock valuation. Think about what happened in transports and about what happened in retail we have a markets conversation coming up but dont think that a lot of great news, the transportation sector, ups and fed ex are sweating over amazon as being the next essentially predator we saw that Retail Stocks are up 7 off of the lows that were hit on prime day how much good news can you bake into one stock. From a valuation standpoint that you bring up, in our lifetimes, is amazon going to have a valuation that makes everyone comfortable probably not when is the valuation going to get to a point where everybody bias the stock and doesnt mention the valuation . Its going to be tough and relative value in the space theres other places to go but guy said this, it would be disingenuous to say we have been pushing back on amazon have to say, 300 ago i thought it was too expensive but a lot has happened in the Business Model and a lot has happened in the space. We know amazon is in the drivers seat. I just felt, i have been bullish but the only reason why i backed off lately is because i dont think he has a reason to turn on the spiggot right now. Its done the work for him right now, no reason to beat the drum again. He doesnt care either. Its up to wall street to get on his page hes not going to get on their page. Oh he cares when this stock doesnt perform and he thinks everyone is betting against it he does something to work on the earnings he pulls back on investing and investment cyclel and shows eps. As big a story as earnings, the trading activity during the intraday was as equally big a story, in my opinion just to drill down here, amazon traded over 10 million shares today. Typically trades about 3 made an all time high today. Had a huge reversal on the back of your show that well talk about at noon. Youll have armchair technicians which i fancy myself to be talk about the potential for an island reversal and all kinds of things so steves level of 994 is not that far away quite frankly. Ill give you the whole couch. Think about facebook, they had great numbers. Maybe amazons numbers arent as good but yesterdays was going to give facebook the benefit of the doubt. For all things amazon, gene mon munster joins us as we wait for the talk there is the phone and gene. One metric that i dont remember you talking about was 27 . Thats up from 24 last quarter. So let me put this into perspective. A leader in market share ecommerce theyre accelerating their growth and theyre accelerating the pace of their market share this is a trifecta of a lot of good things happening. Its a concern that theyll continue to spend like drunken sailers. I think theyre sending like a company that wants to take over a lot of industries. There are three industries that amazon is going after that are secular growth ecommerce is 10 of the bottom line today cloud 15 of business is done in the cloud and if you think about video content, 10 of video spending is done online verses the air so this is not a valuation type of a company. Im very encouraged by these results. Going to be tuned into what theyre going to say obviously on the call but theres a lot to be positive here. Why is the stock down 34 now . Because operating guidance for the September Quarter was for loss of 350 million in operating income an the students at a positive 930 and thats fears of investors they had back in 2014 when they went into an investment cycle and the stock was down 25 in a year thats why the stock is down it had a run plus you start stoking the fierce and at the end of the day if theyre spending and the spending is resulting in a lot of positive things in the business. The risking know is that people will now start to rethink faang as a group as others look at the faangs as a group and the run they had why not do what traders have said and wait. If you think the space itself is going to have a little bit of a come down why not wait i think youre getting cute fluctuates in the market might cause that but goi back to the three areas theyre disrupting theyre disrupting that at an accelerating pace. I like to think about big changes that will come and amazon has three positions within that. You talked about whats going to happen in the Third Quarter explain to me if you can why were operating margins 1. 7 when the street is closer to 3 . Well spending result youed in hr unit growth. The exact details, theyll probably give to us on the call. Could be from lead generation and advertising prime, buying more content for prime its hard to see exactly what drove that but again gi go back to the ecommerce piece. Thats rock solid. Well below what microsofts business grew at but thats a quarter of the size. Well get more details on the call. Well see you back in a little bit grab the phone and well jump back to you as needed. Does he sway you im the least bullish on the stock for awhile but let me tell you one thing have not mentioned for 2017, the stock evaluation is a listen not to own it. You asked will it ever grow into that valuation and it may never it may be a very special stock for a long time. The most important point is that they are spending to grab units. Theyre trying to grab more mind share from their consumers and everything they can to do it and he also said that only 10 of total retail sales were online when you think about it these guys are grabbing half of 1 of every two of growth growing online we have a 5. 2 trillion in the u. S. This story has legs so youre going to look back and say were spending a lot in q2, 2017. That makes perfect sense to me in facebook, in google was so euphoric that you couldnt find anybody that wanted to sell him and thats one of the reasons why you see some some disectionf all of the stocks. If you saw that reversal on amazon and reversal on facebook if you look at a chart during the same period of time it was inverse relationship you need to see faang week lets see if it lasts longer than a day. Coming up, check out intel jum jumping after hours. The latest details next. Plus, there he is now, the man that moves markets. Moving himself. Hell be here to talk about his note that had all of wall street talking today just a moment. And twitter getting crushed today after the company one of the traders bought the stock this morning eyll tell you who it is and why thre banking on a turn around y playing air guitar. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. Even if its chasing squirrels, whats going on here . Um. Im babysitting. Thatll be 50 bucks. You said 30. Yeah, well it was 30 before my fees, like the pizzaordering fee and the dogsitting fee. And the rummage through your closet fee. Who is she, verizon . Are those my heels . Yeah yeah, were the same size. In shoes. With tmobile taxes and fees are already included, so you get four lines of unlimited for just 40 bucks each. The price we say is the price you pay. An outstanding quarter here with the Data Center Group up 9 to 4. 4 billion. Strong demand from the cloud giants the service providers. Enterprise weaker down 11 reaffirmed that forecast he gave for the business unit. Chips for pc up better than expected he said intel keeps driving the evolution of the pc experience several months earlier than expected now going to be a leader in that 70 billion autonomous driving market intel sees competition out there but we are ready for it. Scott back to you. Thank you so stock, you know. I like it i like it, i like it this stock is down underperforming the most important piece of news that i got is that this is going to close early. The other piece of news is that the internet of things group was up 26 year over year. That was a 17 billion deal. They did two years ago we talked about it so these guys are not going to miss the next seeing seeingel cycle. I respect it. Trade is 12 times earnings what do you not like about it the presumption that these guys because they made a couple of acquisitions is going to make up for the past where they missed the boat. I like intel and im long the stock and i appreciate your approach which is i think theyll be in the places they need to be do you . I do. Do you . Ultimately you are giving them the benefit of the doubt in an area that they dont deserve it and data senter is the one exciting part of their growth model. Over 30 plus and theyll continue to grow that. Internet of things is a cool area but theyre not there so if you think about where the cutting edge chips and companies we talk about all the time on the show. Its the first inning of the game if youre a met fan you can argue the season is over i look at the valuation relative to where the stock has been. This say much more sensible longterm investment but a lot of faith being put in them being able to compete on the high level. 38 was the level back in the end of 2014 youre betting theres going to be Earnings Growth they havent seen over the last two years but until you start seeing measurable eps growth its dead in the water here at 36 thats the worst session in more than a year. Ups down 4 on its outlook fed ex as well southwest air lines down 15 off earnings united down 3. Whats going on . You havent seen a rosy picture out of these guys. How do you know i wasnt watching. Ill bet you whatever you have in your pocket you werent watching. I might have been hosting. The transports were in trouble he turned out to be white. Ill say this, now getting back to that 160 level we talked about for quite sometime thats your line in the sand in terms of the transports. Bottom line here is the airlines if you look at the valuations they reported two weeks ago. Theyre a much more disciplined play the transports do have trouble here youre buying airlines on weakness as i have. Still ahead, amazon sinking after hours. Were going to hear the latest about what they say the street is missing about the report. First in business worldwide. In the meantime heres what else is coming up on fast it looks like nothing can stop this market but a top strategist says theres one thing keeping him up at night. Hell be here to explain plus. Where did everybody go . Thats what twitter shareholders are wondering after a quarter with zero user growth but one trader says the stock is a reing scambuy despite the sell off. Much more fast money after the break. Where to get in. Where to get out. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Following the earnings report. We have full coverage of the stocks the Conference Call is about to get underway any minute. Susan lee back at hq listening in on starbucks well bring you the headlines. Better moving those stocks later on in the show but first we start with narcotics opening day at record highs before a big midday reversal lets get to bob for those details. Theres not a lot of interest in bidding up the market in these prices they can cascade into larger drops. It always starts with the lee leaders. This time it moved into faang stocks like apple and then bio tech names like celgene for example. Then secondary leadership like materials that could have done well this month. Moving on is the relative strength index it charged the momentum of an index or stock for a short period of time thats a scale of 1 to 100 so a reading above 70 is considered overbought and oversold. At the open the nasdaq composite. I have never seen this reading in 20 years on a major index 99. 3 out of 100. Im not sure if thats a historic high but a reading of 99. 3 is absurdly overbought. And in the past they usually turn back. Im not trying to turn anybody into a Technical Analyst im well aware a t lot of our viewers have the looking at Technical Analysis but the markets have gone nowhere but straight up for nearly three weeks and in this Case Technical talk is a very useful way to illustrate you. Well a man that moves markets strikes again as some investors say his note is partly what spooked investors. Jp morgans global head of quantitative strategies. Joins us now good to see you again. He comments on that about the time the note comes out as well. Questioning the same thing whether people are too complacent or volatility is too low and its going to end badly as a result. We should note today around 12 30 and basically it will most likely put in lows now this morning we think it poses a risk to markets and why the risk is there, because theres a number of strategies and determine how much it is and therapy. But they have a lot of things in common which is basically that they rely on their ability to sell the market and cut the loss on time. That order becomes bigger. Its the biggest loss. And also the strike gets closer and closer to markets. And fundamentals are healthy when you look at earnings season right now we forecast 132 dollars. Thats up from last year and we have to say basically that global is better and 4 only last month so thats a boost to earnings and theres finally this promise of potential tax reform so one side fundamentals are healthy. And i talked about volatility. Why volatility is risky and why its at a turning point right now. The second one is Central Banks and Central Banks basically theres a Balance Sheet and size of the Balance Sheet which is right now at a record level and its about to get smaller. I want to go into this issue of volatility or lack there of and i want you to listen to what robert told us at noon today volatility was pretty low. Its surprising to many people what triggered that crash and its nothing the crash kind of triggered itself. To be clear hes not saying that were on the precipice of another 29 style crash but his point doesnt sound all that far away from the types of things that youre worried about. Its basically the same point. I mentioned a number of these strategies that have this, i call it 1987 type feature. Volatility gets low and they all get levered and something triggers it and volatility starts going