and the nasdaq falling. the ticks weighing down that intex. >> moody's changing the outlook to negative. could have an impact on what the euro does. thanks for watching the bell. >> "fast money" starts right now. >> a bad day in europe. >> carnage across europe. banks were hit hard as well. and the cause? rising yields particularly in spain and italy. >> made for a bad day here. >> a very tough day on wall street for the bulls. the realtime exchange. >> and for good reason. globalization has made us all the same. >> the company came out with their second quarter numbers. it was $1.32 a share and that was five cents below what the street had been expecting. >> as the bears may be shopping for more shorts, the team have

the trades to stop them in their tracks. fresh from the trading floor, this is fast money. >> live from the nasdaq market site in new york city's market square. you want to go straight to mary tompson. moody's revising lower their outlook for germany. mary? >> that's right. included in that the netherlands and luxembourg. and here is the reason why. moody's said the rising uncertainty about the outcome of the european debt crisis and increase in event risk led to an increased possibility that greece will lead the euro is one reason it is lowering its outlook for these countries. in addition, they think any kind of knock on effect of the weaker economies will result in the aaa rated sovereigns taking on a greater burden dealing with the

european debt crisis. that happening in the afterhours. there is a move in the euro and we will see how that impacts trading tomorrow. >> we will show you the picture of the s&p 500 futures slightly lower. the sell-off originated in europe. it might not be bad but it can't be good. >> i don't think it should be a great surprise. >> it doesn't order that well for tomorrow's session. maybe it does. when we're looking at the s&p, the financials let us out. i don't bow at the alter of j.p. morgan. the stock closed up 1.6%. a name we have been mentioning for a while now on what was a lousy take most of the day. look at what black stone did.

the stock closed up so j.p. morgan if you're looking for a trade with a good risk reward. as long as we can hold that 1344 level, maybe we make that push back up to 13.66. >> and it was not just j.p. morgan and morgan stanley. bank of america, caterpillar and eaton was strong pretty much for the entire session. >> what's going on right now is that earnings estimates have come down to a level. margins are down. margins are up. that's what fwot them to be. the same story i got them everywhere else. 65% of the companies have beat earnings but almost an equal number have missed on red news and ultimately productivity

gains go by the wayside. i'm remaining caution on the market. >> let's bring rebecca patterson in for more on the story. she is also a money in motion. does this change at all the outlook? >> the negative outlook for some of the poor european countries is really important. we see the flight to safety within europe with money going to countries like germany and the netherlands. if the market changes its few that the core countries are not the same safe havens they used to be, then the capital does not stay in europe. it leaves europe all together. that could push u.s. treasury yields and testify knitly could push the euro down further. this short selling ban on spanish and italian equities i also think is bad news for the

euro. if owe have those equities and you need to hedge that risk, this is going be one of the most liquid cheapest ways. >> will you be looking for in terms of capital coming out of europe? will you be looking at the funds to see if there is a change in investor sentiment? >> i think that will be a very important thing to watch. instead of seeing the flight to germany do we see movement out of germany? so i think that is going to be important. but also remember as europe is reminding us, this is a global market, global linking and we have a lot of july flash purchasing indexes out tomorrow including, i believe, china. so we want to get a new take on the global growth outlook. >> and in terms of germany, if

it does lose its aaa rating, does that impact the ability if it is a possibility at the end of the day to issue bonds? >> great question. i turned that question on its head a little bit. what i have noticed over this last very long and slow european crisis is that every time german yields rise out of fear, we have seen germany say maybe we can be a little more flexible on policy. maybe we can tweak things. germany may not be in love with bailing out countries like greece. this might be the wake-up call that gets german politicians on the same page to take more action to support europe. >> okay. and quickly, got to talk about the euro. what does this -- how does this impact your view of the euro? where do you see the downside? >> i have been a seller of euro

on any kind of rallies for what feels like an eternity now. so st euro while it has come down a lot is not cheap yet. i would not be surprised to see it fall further. the technical levels could stall a little bit. >> we appreciate your analysis. more "money in motion" every friday at 5:30 p.m. eastern time. what do you do here in tomorrow's session. >> you look at this news regarding moody's now. looking at moody's, they downgraded the u.s., didn't do too much to what we were doing. everybody knows what is going on in europe is negative. this could be a back door

positive for the overall markets. we do have to find the resolution here. i think you look at the price action back here in the u.s. we have talked about. i don't think this changes anything. we hope they find resolution here. u.s. focus. >> glass half full or glass half important? >> unless you're trading currencies, i wouldn't reaction one way or the other. i think what really, if your equity centric and investing in the market right now, keep an eye on apple tomorrow night. everyone is waiting to see if apple will have its break out now or will have to wait for the fall. i truly believe that tomorrow is not just hype.

it is an important conference call. >> there is no coincidence that apple brought with it, helping the nasdaq. >> no one should be shocked. you say to yourself what does this have to do with apple. there is nothing else happening. >> apple is interesting because we have seen expectations come down. down play expectations. iphone sales and ipad sales. this quarter is a squishy quarter. i am looking for an opportunity to get back into the stock. hopefully he gives it to me. i think it's important. but i think to me it's the macro that will override. >> and also what is interesting is this quarter, the earnings

estimates. they have a nine to $12. wider than the revenue estimates. some people will get it really wrong. >> if you have been betting long apple the last three or four years you have been right. apple comes out with new products with earnings. why try to bet on who will have the next ipad ipad killer. you have not seen one yet so maybe you won't. >> what are options traders guessing on apple in terms of its move? >> they expect a move of about 5.3% on a number. i think steve is right on the money. i think a bad number can be explained away by new iphone, new ipad. interesting thing. apple more or less was at the end of the day, implied

volatility was up over 8%. we had 1.4 calls and people were reaching to buy those calls or puts slightly bullish. but they are reaching because they are afraid of the number that they are going get. if it's really ugly, they will have the week to it is. just where he sees the s&p 500 headed by year's end is sure to surprise you. you want to stick around. later on it is the opening ceremonies of the fast money olympics. traders are making special picks in honor of the summer games. the trades will be revealed later on in the show. >> so fast. lots more coming up. [ female announcer ] want to spend less and retire with more?

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welcome back. we are live in new york's times square. we are checking on shares of texas instruments. revenues fell short. also a bit light here. they are saying that the global economy is causing customers to

be cautious. that is the guidance down about 1%. >> revenue? listen, the quarter was not atrocio atrocious. the markets have been cutting a lot of these tech companies a break. we will see if it does again with texas. it should be down more than it is. i don't think you should race out and buy it but it might be telling you something. >> a lot of people are really pulling in the reins as far as spending goes. if you get stablization? the markets, this is a company you can own. >> these companies are acting like the commodity companies that they are. they cut back on flash production.

the markets flooded with it. you can see the stocks move higher. >> keep in mind that it acquired national semi. there is big question as to whether or not it has too much capacity on its hands. >> right. i just think the story with semis is really a sector story right now. it's not a great time in the cycle. there are a handful that will really benefit. smart phone shipments will be crazy. emerging markets are trading up quicker. i think you want to merge up on those. a secondary name would be broadcomm, the only place where there is a growth story. anything to do with analog and pc stuff is not that it easterable. it's just that no one will really move the stocks much over

the short term. >> and other big movers. we are watching shares of devry go down? >> in terms of guidance, they are guided 43 to 46 cents a share compared to estimates of 78 cents. you have an issue with rising costs and low ehren rollments. just take a look at apollo management. that name also getting thumped by the tune of six and a third%. you would think it would be a strong -- >> thanks for that. >> i don't know why you would want oown any stocks for the

segment. >> they are just saddened with debt. regulatory exposure. i say stay away from completely. and on the short side, way too crowded. >> investors flocking to safe havens. could lower rates and the s&p driving force. beyond 1600 into the fourth quarter. barry, great to speak with you. >> glad to be here. >> 1600. that's quite a ramp from where we are now. what are the baseline scenarios that you must see in order for that to happen in terms of tax policy or fiscal earnings? >> it is sort of lonely at the top with a target like that. the financials are discounting deflationna deflationnary.

>> so morgan stanley just lowered their s&p 500 eps forecast to 99 bucks. >> when you have a low inflation environment and you don't have deflation and you don't have inflation, you have a sweet spot in between. clearly the equity less drag from government and other factors and you would have to see a rerating. the financials would have to be rerated upwards. and some of the commodity plays as well. and on the growth stocks it would be v to be a rerating for growth as it exists. >> barry, it's mike. i'm with you as far as the up side in the back half of the

year. how important is housing to your thesis? home builders whether new, existing, just housing in general, how important do you need housing to participate to get to 1600? >> you do, but you have had five quarters of housing to participate. if you look at existing home inventories, they are very low. if you look at the transaction volumes they should pick up now that we have more foreclosure rules in existence. pricing would suffer but people are focused on the unit volumes. housing should start to contribute more towards the latter part of the year and inventory would have to contribute as well. >> if we want to participate and we agree with your thesis, what would be the sector or two? health care has obviously been a large leader and anything defensive is starting to be the popular trade? how would we switch gears and make the most of a move up? >> a lot of health care is defensive. when you have declining consumer

sentiment you will have higher health care stocks. it clearly has to be led by the financials at the top. and the worst performing would have to be the utilities and telecommunications. so this can't occur without a cloe sure at both ends. higher pes and higher treasury yields and the only way you get there is to avoid the deflationnary outcome. the real risk in this market is in europe. i just got back from 23 of the last 30 days in europe all over western europe. i can tell you they are like deer in headlights. not knowing which way to go. so policy is still very important to this market. >> all right. got to leave it there. thanks for your time. fascinating call. 16500 on the s&p 500 by second half of the year. in order for that to happen, it sounds like the premium that investors are paying must go away. >> i tell you one thing, been in the business for over two decades. any time anybody has come out

and set multiple expansion story, buy it? i have shorted it and made money more often. >> all of the marketing material, every summer your e-mail inbox is filled with second half recovery. >> that is the question. what are you going to earn and what is the multiple. >> let's check with the monitor on the trades. >> a lot of viewers tweeting about the challenges facing mcdonald's. you have the stronger dollar, slower growth overseas. >> short to 86. this thing hit a record high and has not seen that.

>> quincoincidence or not, i do believe in coincidence. you are looking for an opportunity. understanding that the chart might be broken but i would rather look for mcdonalds in the low 80s than try to short it. >> it reminds me a little bit of nike a name that we are long. i think you can actually look at mcdonald's here. >> 3% yield. coming up next we are continuing to bring you all the options. stay tuned to get the trades. plus a down day in the street today. the commodities king is still

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this is big news. >> largest cloud play out there.

eps revenues coming in line for the second quarter. the company also announcing a new purchase for a little more than a billion dollars now. >> we're long emc and we maintain that is the right way to buy vmwear. i think the thing is they are so dominant in their space that it's really a bet on virtualization and cloud. if you believe that space will continue to grow, you can pick up vmware if you want to be in that space. >> they issued preliminary results. do you think the company should have been more forthright? >> what changed in six days.

>> that always puzzles me. >> this is clearly one of the best names in the space. i don't think this post market performance is changing my view one way or the other. >> brian is watching shares. about 7% high sner. >> the interesting conversation is they closed the day still down 8% year to date so they are making almost all of that back. a classic beat and raise. they raised their revenue guidance. you're going look at this as a proxy for china. the markets opening up to bidu are going to grow no matter what

happens on the macro picture. investors like it considering what they have done to it so far this year. >> and bidu being the google of china, not a panda. >> you said fwoogle is the bidu. >> many active customers, almost a 10 fers increase from the first quarter. that's a good thing. traffic acquisition costs are up. that's a bit of a red flag. with all that said, the stock traded down to 104 a while back. and it's basically traded down to 104 recently.

>> let's move on talk about corn hitting about 2%. should you still be buying grains to buck the bad tape? we will break down the best commodity trade. dennis? >> good to be spoken to. in terms of corn, a little bit of relief that we saw. is that enough to actually help the crops? >> not really. you need more rain. the crop conditions report came out after the close. it was not as bad as people had thought. it was not as bad as the bulls had hoped. we're likely to trade a little bit lower. we need to take the grain market down a little bit lower. the soybean crop is in good condition. the corn crop is in devastating condition. take beans down maybe a dollar. take corn down another 25 to 30

cents and you will have me very interested again. the corn crop has been decimated and likely rain is not going to do a great deal of support. >> if the government comes out and revisits the ethynol requirements as they have done in the past, what would that do to corn prices in your estimations? >> it would be bearish for corn. they need to do that. there is no reason to put what meager amounts of corn we will get into gas tanks. it's a difficult thing to do in the midst of an election. you don't want to come out and change the mandate right now. my bet is they will do it the day after the election when all that political concern is over. >> you hear so much about the crop being a bad crop, a dead crop. all the rain in the world is not going to save this crop.

at what point does the market accept it as a bad crop and move on which i think would bring the price down a little bit? >> it will be a long time in the coming of that. something close to 12.2. at that point i don't care what you do. you're in trouble and it will be difficult for food prices and very, very difficult for meat producers for cattle and hog producers. we are a long way from putting next year's crop into the ground. and the real problem comes next year. what is the propensity of a farmer to be afwress nif planting next year? will he will able to get fertilizer? will he be able to get lending by the banks who are going to be hurt badly by this drought? will they be standing up and saying okay we will go ahead and lend as aggressively as we have in the past.

>> that's not going happen. >> all right. always good to speak with you. a pleasure. all right. so tennis had mentioned farmers being droughted out. that's a key question when it comes to equipment. that's one of the names that we saw a huge turn around. >> i don't like the way it is setting up in the chart the ticker is lmn. they sell irrigation equipment. if you think the farmers that, by the way, they planted a record crop. you better believe that orders

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>> welcome back to fast money. let's check in with cnbc. we're watching some big moves. >> a call option in the pfizer story and they viewed expectations as very low. their current model carries a 25% model of profitability.

>> i am not in there. lily is one that i would look at. i think that, you know, you can't extrapolate from one trug failing to others. they are composed timpbtly. >> pfizer was just basically a lottery ticket. >> i am a buyer on any weakness on one particular drug. >> this is one of two late stage studies. you could get approval. >> let's go back. >> talks of a spanish bailout.

>> larry, great to see you again. >> great to be here. >> does this change? does a moody's outlook change your view at all or is it a so what at this point? >> i think the real systemic approach is issues are coming out of spain. you have so much off balance sheet debt that is really -- markets are finding truth. the truth is bleeding out slowly. there is too much debt. >> will the bond market continue to trust german boones with moody's threatening a downgrade? >> the flight to quality is so powerful. that is not going to stop. the two-year bond is up. so the curb in spain is becoming

inverted. that's a massive risk indicator. >> in terms of let's say the reports are right. there are six regions in spain. how much money is that in your view? >> well. >> how big could the bail-out be. the regions need about 50. >> 50? >> on top of the 100. >> and that we didn't know about. and then, if you look at the banks themselves, the government told us the spanish bank bailout was 50 billion. now they are saying it's 100 and analysts on the street saying it could be 1200. >> larry, sell u.s. equities on rallies? >> as long as yields are above

70. i think you look at 1380. >> i have heard 6% is that going apply for spain? >> the interesting thing, if you look at the last six months. so, 6%, 7% is more deadly now. >> is that going to have a fall out ip pact in terms of seeking other methods? other countries and bank stocks and so on. >> if you look back, short selling bands are typically a sign that we're getting close to a political solution.

right? i don't think we make it that far. i think the bond market forces the politicians to really come together and fix this real problem with the spanish bonds. in the short term the ecb. >> we have tools that are in the works. we need a bridge to get there. >> larry, good to see you. >> after the short band was active u.s. banks, .

>> scott? >> that's right. we saw a big buyer of puts. specifically we saw somebody buy 38,000 of the september $30 puts. they paid about 26 cents for these. >> the corner again. eps, big eps beat revenues.

again disappointing guidance. the stock performance was something worth watching. the upside on two times normal volume. you want to be in and pay decent dividendful everything is in the context. you saw a relief rally. a stock that was probably overdone to the downside. i think the risk reward sets up interestingly. >> more options action every friday at 5:00. coming up, fast money trades of olympic proportions. all this week traders are giving you their top trades ahead of the summer games. stay tuned to get their gold medal picks after this. [ male announcer ] trading's like a high-speed train. and you don't want to miss it with thinkorswim by td ameritrade. you get knock-your-socks-off tools, simple one-click orders, real-time paper trading to hone your skills, plus anytime you need it support.

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that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase if our two-year rate goes up. if your bank makes you miss out, you need an ally. ally bank. no nonsense. just people sense. >> definitely not a call that.

>> since that recommendation, what to you do with this trade. >> it's back traded over 31 today. i would stay long until we get there. >> the market used prices for equipment -- used equipment, i should say.

>> we want to go to john who has been monitoring the texas instruments call. >> texas instruments saying we have less demanding scheduled for the quarter. unsure of exactly why that is. is it because customers just don't think that they are going get any kind of spike in orders or because customers are confident if they do get a spike, they don't have that much going on so they will be able to satisfy any spike in demand. they are not sure what the market is going to hold. they are hoping to have a better sense by the mid quarter update. >> i'm curious if they are being specific at all in terms of what sector they are seeing that weakened demand from or is it across the board? >> pretty much across the board. they are seeing a little bit more strength in communication. they pointed out autos as being

particularly weak. >> let's talk about the stocks being talked about the most and how you can use that to your trading advantage. >> take a look at the stock. get an idea of what's trending at this hour. remember the bigger the box the bigger the chatter. testing the 200 day moving average for the first time this year. al says the coffee market is hitting a top. starbucks does remain a favorite among long term investors but what's the short. >> in terms of earnings coming up what are you hoping for. >> i think the earnings call

will be okay. i hope the guidance. >> look at the initiatives. they have plans. entrance into asia, etc. if you like starbucks you might be getting a gift on friday after the call on thursday night. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com.

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>> next hour on "mad money," is it time to order some apples or is it too hot to handle? plus the ceo of regional bank first arrived coming up at the top of the hour on mad money. we, of course, are just a few days away from the opening ceremonies. and we here at fast money are holding our own version of the greatest tradition in sports. every day this week we are bringing you the best investments in four categories related to the summer games.

every day we will reveal the gold medal winners. kicking off today, metals. get it? olympic medals and metals. >> i will kick it off with a short ak steel. they report tomorrow. recipe for disaster. >> i know you want that gold medal. >> what's your pick. >> the stock's performance has been abysmal in this stock. i think it might be holding the 29 level. i think on valuation it's cheap. tck is my view. >> josh brown. >> i'm going with worthington steel. i have got to tell you it was not easy finding any metal stock at all. that lined up fundamentally and tactically. this one is interesting.

levered to housing, which is a good thing. they are paying a two and a half% dividend. >> btu. coal name. they are going be announcing earnings tomorrow morning. neighbor have a tradeable rally here. last week they announced a distribution arrangement. i think maybe we could end this contest quickly and get a nice snap back. >> i may have to disqualify you for that. >> the ultra short gold etf. this is a bearish play. it's hurt by a rising dollar. >> we will be right back.

>> time for the final trade scott? >> long j.p. morgan. >> wiess? >> my apple tree. >> i feel like the price action in eten. >> pfizer. i think you can buy it on any weakness. >> josh. >> worthington. >> see you tomorrow