world for a diagnose sis. big plus has been on this forever with watson expected to help doctors by accepting and digesting information. the marriage is not exciting not just because it is creating opportunities but it is extending lives. fast money begins right now. i will see you tomorrow on "closing bell". >> live from the nasdaq market site, this is "fast money". sell the news. apple's new iphones fail to excite the bulls. we are breaking down the trade. organic growth. the ceo of celestial joins us with his recipe for big profits. and emerging market boom. the data out of china is getting stronger by the day. why japan morgan says don't buy

the hype. >> i'm melissa lee. brian kelly, steve, anthony and guy. first let's get straight to our top story. speculating on this rally. should you be terned about what is actual ly. >> what's different today is the blue chips are not performing well. and that's walmart so you cannot have a sustainable move without the generals. >> take a look at some of the individual names leading the rally. all of double digits in threw months.

that could bring up caterpillar which has underperformed for the last 24 months. i understand what he is saying and you always have to have. >> what do you make of this move of the more speculative names? >> they are being driven by liquidity so i think the market is going a little faster than people expected because i don't think the fed is going to taper as quickly as people suggest. a 10 million dollar tape ser not much of a taper. i think that is what is affecting the markets right now. you look at the ma crow economic

environment. you don't see the growth there. that has got to be driving some people to be getting to the sidelines. >> just to touch on that, eem was unfairly sold off. i shouldn't say unfairly. it wasover sold. most recent highs i get we're looking back to may. but to touch on the other, people are looking for performance. 90% of all funds are probably trailing the index. so where are they going to get it from? not from disney or the generals. they will get it from wimpy stocks. >> ralph mentioned speculation. alpha could mean speculation, change for performance. >> it's a symbol of a topping process. i don't know if this is the absolute top but this is what you see when you see markets get disconnected. i would bring up big blue as

another one to put out there. we have talked a lot in the show. they talked about how ibm tends to lead the market i sold all of my equity exposure. >> you're in all cash? >> 100% cash. >> so putting the bear suit to the test? >> i wouldn't go that far. but i bought emerging markets. i bought european stocks. they have had a phenomenal run here. so why not take some off the table. >> they don't ring a bell at the top. what's the high? 1709? >> i think i have been skeptical for a while. at these levels now, this way

you take the profits. >> listen, i don't know if we're at the top or not. there is so much cash on the s&p 500 balance sheet look at the situation with coke. any time you see a company like that trade into a private company, a lot of people say that is the top it's hard to say that it's a top. but these external factors will likely drive the market higher whether you like it or not? >> merger activity, retail is investing. >> that's not to say that we won't have some corrections but i still think the trend line is up and this is very lax monetary

policy. >> let's get more on the dough. we should talk about today's shake up of the dow jones industrial average. so let's trade some of these names. >> i like this game. >> you do? these are all very small issues and very small impacts on the dough because they have very small prices. >> it's cool to be a dough stock. i'm not one. >> i'm not either. >> a couple things stick out to me. alcoa sort of looks interesting. the two i would like to trade here is hp from the short side. the move that we saw was a huge move from that low in november. we had a huge move higher. that move is over. all the potential good news is priced in. i think is a nak we can talk

about forever. >> the bottom line is not only do you have a new list to follow but the volatility of the index now goes down. >> in terms, that is interesting stuff. i think you probably take this outside. this is zero impact on the company. you look at something like a nik. it popped on nothing fundamental. i still think that retail is challenged. there are funded indexed to the dough. doesn't that provide the buyer? it has to hold on to those shares.

>> in terms of do i have an investment thesis around nik going into the dough? no. you shouldn't be doing anything on it. here are the two things. 6 i'm an old school person. so congratulations to these three companies. think of the history behind the dough. the risks there is what we would tall the sports illustrated effect. some kpla sency could set in culturally. management teams to keep people sharp. >> will goldman sachs earn an extra penny because they went on the douw? >> it's not that they would earn

an extra penny but now that they are in the dough, does that mean that the bloom is off the rose of their cycle? i that is getting the cover of sports illustrated before the season starts. >> let's get more on this blue ship shake up. and the editor of the newsletter. rich, great to have you with us. >> they are both going up pretty meaningfully. you could argue that the financial sector is going up more.

their share prices were too large and would ski the index. er the list narrows consider pli if you're not going to throw in an apple or a google. visa is one that i view as pretty logical. instd of the back of america safe play. nike is not too surprising. think about who is a successful consumer di cessionnary stock, nike is good.

>> they're really wrestling with what to do with apple and google. it's pretty glaring not to have apple and google. >> before we head to break, let's go to some of the afterhours movers. surging on news that will require customer care business for $505 million. retail restoration hardware dropping despite an earnings to the comp, coming in weaker than expected. net flix hitting new all time highs. all over this trade. find out how he is playing the next move. that is next.

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>> let's get on to sheila right now. >> i have two names for you to keep an eye on. first up is international paper. also announcing a $1.5 billion stock buy back. but a very different story for texas instruments. we are seeing that stock down in the aftermarket. the company did update its third quarter guidance today. they said that profits will now be between 51 and 55 cents a share and sales between 3.15 and 3.29 billion. analysts had the upper end of that sales forecast. >> thanks for that. brian kelly, a pretty decent move. we're talking about if you are

worried about this market. companies are buying back stock, paying out dividend. that also says they don't have any business to invest that in. you see that reflected in texas instruments. that is down because their actual top earnings are down. that's what gets me concerned about this market. cheap money ends. buy backs end and dividend end and then you have got a problem. >> let's get a trade update now. if you had been listening for all of these months you would have more than doubled your money in netflix. >> the short end indicates that there might be a short covering left in this name. i understand that is is a ways away from here but i also think this stock will trade up to 105, 110. >> technically the stock has done everything right. you can tell all the folks about what he said today. i understand valuation is stupid.

>> we will see if shorts lean out tomorrow. if they don't i think it's headed higher once again. >> since the first call netflix is up more than 240%. it appears that original context is working. striking the first cable deal to air netflix content. netflix is hitting yet another high. >> now you're at the frothy level. you have got analysts jumping on board. >> you had your hand up my back telling me what to say. now is the time. these are the same levels we saw in the middle of 2011.

>> if you had been in this, god bless you, take profits. five more points i will get fired on this thing. >> we are spending a tremendous amount of money on this new production. this could upset the earnings table. when the earnings table gets upset on a 125, 130 multiple stock, it's a very steep drop. >> all right. let's stick with technology. the u.s. apple event is not doing much to excite investors as people question whether the phones are cheap enough. great to have you with us once again. >> the privacy is simply not cheap enough if it is

unsubsidized in china. how much could that cost overseas and is apple pricing itself out to actually compete in the emerging markets? >> even if it is subsidized it is pricing itself out. every analyst expected including ourselves. this is a lot higher and frankly at $400 it was price t out in the market. >> let's be clear here. when you said that all of the analysts are expecting 300 to 400, that is the lowest unsubsidized price. >> correct. the whole sail unsubsidized price. we have heard from the chinese

government that they are not in favor of subsidies, but is there a work around way for apple to sell these phones to china as a cheaper rate. >> we think if you look at china, the companies subsidize iphones a lot. but they pay a lot. they double charge you interest rates are very high. it doesn't matter. now when you get a $200 phone. that's great. it has a much bigger content and library than i tunes in china. this is is a wrong price. beautiful phones but the wrong price. >> the price on the stock has really played out sell off that we have seen, i am wondering from your standpoint.

>> if you look at consensus numbers for next year they are expecting significant iphone and eps growth. i think the street has to come down to our numbers. so we're around 20% below the street. we think the street has the lower numbers now. >> peter, great to have you with us. >> thanks for having me. >> all right. what do we do here with apple? >> we have to be careful with that. the level of emotion that it brings out in people is startling to me. i think we did a nice job. it's a wonderful company. there is no reason that we have been talking about now for a couple of weeks.

there is still nothing. there is no waiting. sit a full growth. >> can i say something? >> quickly. >> you may. >> i think we are focusing today. the trade in will be valuable to apple. you keep everybody in their eco-system with this trade in. the cost of switching is prohibitive. >> it's still too expensive. you talk about guys that have so many choices. samsung has every phone for every person. >> isn't the issue where apple is going to find the next area of growth? or tapping into a new market. >> i think we have all talked about the problems on the innovation and public relations side.

there will be other things that apple is going to do. but that trade in program is going to be hugely valuable to apple. yes it's a little disappointing that the phones are too expensive in china. we all know that. and they will be buying more than expected of apple phones. >> we all know that the phones are too expensive so they are doing something. either they know that they can't make the margins or they have something else up their sleeve that they're going to find out perhaps tomorrow. maybe they are going to do a financing deal like they do in india. i wouldn't get too bearish on apple here. but i would wait until about 450, 460 to buy it. >> we got a pop here for potash. >> this whole story with the

russian and the cartel up in canada continues to get extremely interesting. you have to know about russian politics. >> this is a struggle. if you're willing to get in, not a bad level is around the $36 range. i would wait for more of a sell off. >> 2%. anthony? >> it's up a little bit on the goldman sack saks situation. great investment banking situation. >> got a drop here for green mountain. >> it has had a tremendous run. we like the stock. we had a street fight about this stock. i don't think you buy this one again. gmcr. >> thank you for that. pop here now for strolling in

style. it comes equipped with a super sized tires. it is 1,000 bucks. it is is a steal compared to the aston martin. >> smooth ride. smoott ride. >> unbelievably smooth. >> new teddy cam. >> still ahead, find out what morgan stanley has to say about the retail investor and later on, carl ichan cutting his gains in half.

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>> morgan stanley sitting down with mary tompson for an excluzive interview. you had interesting comments. >> he said ceos are ready for action. but he did say the ceos that have a strategic plan are likely to execute it sooner rather than later. as you mentioned it's a different story for the retail investor who is served by morgan stanley's brokerage arm. >> the retail activity is still

pretty muted. there is not a lot of secondary trading. >> they got burnt and they got confused. >> the sad thing is when it's starteding to turn is when the retailers are looking to get back in. >> the brokerage business gives morgan stanley a huge deposit

base that it will use to increase lending to those clients. he says some regulations have been good, some bad but all in all the banking system is much stronger. all in all he says that makes it less likely. back to you melissa. >> thank you very much mary. brian kelly, why is it that we are hearing from some of the online trading firms that things are actually better? and trading is up versus a year ago? >> and etrade had a monster today. >> you mean in stocks like. >> people tend to trade those stocks as opposed to in their

morgan stanley i do think that morgan stanley has one of the best platforms out there. >> they will be all right. >> the other thing is the smith barney acquisition act that was completed last year. this has been a brilliant strategic management team. i suspect they will see a turn around in retail way bigger than i expect right now. as it relates to long term prospects, i think of all of the bracket banks, they are the number one. >> let's get to lululemon. it's time for a street fight. lulu reporting second quarter results before the break.

to downward facing shares offering buying opportunity. the bear has 90 seconds total to make the case. >> i'm sure you find it interesting that i'm the bull in lulu. the quality issues that you just discussed, they have passed that. that is gone. you got past the christine day resignation as well. they are past that. last quarter you saw a tremendous inventory. like 34% inventory build year-over-year which led to a tremendous drop in gross margins. i think that is behinld them as well. i think they put that in the rear view mirror. i think all the bad news i wouldn't be surprised to see it on this sucker. >> despite guy's warrior 2

position, i completely disagree with him and i take one of his points. look at what is happening in this space. lulu had a monopoly on yoga pants. in a period when they so you have a situation here where a company needs a rudder and they are rudderless in this environment. and look at the price action today. just awful price action today. we had a stock market up over 1% and lulu lemon up almost 2%. sell this one. >> right to the buzzer. >> very professional. >> that's a pro job. he makes great points. always does. always does. >> but you made better points? >> september 12 they report. we will find out. >> we can find out right now. weigh in. >> it's too hit or miss when you

look at the technicals. they had a sell off. i'm going to go a different way. i would rather be a buyer of nike. >> so you're a bear. >> i would rather be a buyer of nike. >> we have earnings coming up. in the back of every trader's mind is 17% down so i don't know if that happens. we saw one trader sell 500 puts.

that is pretty cheap. they are basically saying lulu is not going back doub those levels. it is overdone. the latest yoga line is selling off the store. they are gone for them and they are doing the right things to go forward here. basically a way to say it will be higher afterwards. >> you may have noticed a headline at the bomb tom of the screen. that headline acrypted to dow jones that a shareholder wants to sell 30 million shares in general motors. the stock is done just a touch. don't know yet.

not necessarily a good sign? any stance all along is it is the best way to be. >> all right. coming up next, yet another dose of solid data. so why is it said don't buy the hype? plus the organic food boom, we will take you right to the source where the president and ceo of hans celestial. that's next. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪

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expected data out of china. but should you buy into this china hype? let's bring in adrienne, chief asian and emerging market. adrienne, great to have you with us. great to see you state side.

>> why not believe this story? >> melissa, i think you can buy in as long as you are willing to be reasonably nimble. we would see the china dates remaining okay up until around november. it's mptd to understand who has been driving this. they were very quick in telling people whatnot to spend money on they haven't been controlling property prices like they were under the previous administration. we think the china data will be good through november. buy if you want to be quick but

understand it's a trade rather than a structural story. >> brazil is now up about 24%. is that a place to go? that has been a beneficiary. one month high in the back of the data. is that a place to go off of a better china story? >> i think if you're looking at the resources named, yet. the story still looks very challenged. interest rates are going higher. we're in the middle of a poor credit cycle for the consumer. remember with the iron our story, the ore price has picked up quite a bit already. india needs to earn foreign

exchange to reduce the current account deficit and we do think the indians will start supplying iron ore into other markets. the trade has been short covering with a little bit of leverage off of the china story. >> let's say i want to short the hype. do i short india? >> no. they have done the right thing. the currency is weaker. we estimate it is probably a run rate of around 2 billion a month. that is is a substantial improvement. i think indian banks, energy, and material stocks are very strong buys here and we are beginning to see a reasonable recovery. >> we're going to leave it there. thanks for joining us.

how do we trade this here? one of adrienne's streets is mexico. >> with the mexican index it is highly levelled. floating exchange rate. look at mexico. >> let's switch gears here in case you missed some of today's top moments. here is a rapid fire recount of tonight's executive edge. >> if the way that regulations come down do not allow entrepreneurship and do not allow people in the financial industry making mistakes, then i think and because of risking taxpayer money, i think that will make our financials be completely ineffective. >> the economy evolves.

there is no question about it. that is why we are looking at some stocks now which are established. one of the two leaders in international payment technology. >> the president had so much ground that it makes me worried as an american that we have lost our leadership to sigs in the world. >> this is our most forward thinking phone yet. the iphone 5s in silver, gold, and space gray. >> here are the three headlines that you need to know so far. we have the iphone 5c, 99 and $199 subsidized and the new iphone 5s as it is known. and we finally have a date for the new ios. >> there was zero chance of seeing a financial crisis like

the one we just had. >> 0% chance of price crisis. >> i think he is right. the leverage ratios is down. our financial crisis in 2008 has been well fought by policymakers. >> coming up next, after a 45% run, is it time to take profits in hanes celestial? vo: two years of grad school.

20 years with the company. thousands of presentations. and one hard earned partnership. it took a lot of work to get this far. so now i'm supposed to take a back seat when it comes to my investments? there's zero chance of that happening. avo: when you work with a schwab financial consultant, you'll get the guidance you need with the control you want. talk to us today.

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including over 70 in our innovative coca-cola free-style dispensers. working with our beverage industry and restaurant partners, we're helping provide choices that make sense for everyone. because when people come together, good things happen. >> record sales last quarter and a new place with the fastest growing companies list hanes celestials may seem like a good investment but after billionaire investor carl icahn dropped his investment, people are wondering. >> when you hear about a salvy investor selling half of his stake, surely he is still the largest shareholder on paper, people automatically say maybe he is ringing the top of the stock. maybe the easy money is done and

the gains are going to be hard to come by at this point? >> i have to agree with you. carl has been in the stock for three years. he got in the stock and i was on your show after that and i was asked are you concerned with carl icahn being a shareholder? and listen, carl made four times his money and he got in at a time when the stock was way undervalued. there was carl, you know, buying hanes stock. there is nothing wrong with ringing a cash register. we are positioned better today than when carl bought the stock three years ago. you know, when carl came into the stock, we earned 80 cents a share. we earned $2.53 a share today. our consumption up 11.4% which means all of the categories over

than whole foods. so eating healthy and i have said it on the show, not a trend, not a fad. it's going to become a bigger and bigger part of our lives. what's one of the number one products of fashion week? whole foods opening up a thousand stores. one of my biggest customers is walmart. the consumer is not going to whole foods just to buy healthy foods. and here in new york city, fair way. trader joes opening up more and more stores. sprouts, more and more stores. it is a good time for eating healthy products. >> a lot are flagging the fact that input costs are going to rise. those prices are going up. margins might be a little bit of a pitch? >> a couple of things. because of the size on global, we are able to source around the world. hopefully we can keep prices

down. healthier foods are going to be 10 to 15% should be the premium on conventional foods. we were talking about genetically modified free ingredients. we have a baby food business. glass jars were the big product -- are the big container that you sold product. so packaging will change tremendously. ingredients. we are dealing with an educated consumer. on my last conference call i announced that childhood obesity is down for the first time which shows that schools, moms, dads, are getting behind healthy eating. >> we are out of time. we are literally out of time.

last question literally 20 seconds on the clock. looking for more acquisitions at this point? you have very ambitious growth targets. >> we did over 400 million dollars of great acquisitions last year. >> are you shopping for more? >> we're always looking for acquisitions but we got the juice to grow currently and don't need to do acquisitions. with that, it's the consumer that wants our product. >> good to see you. thanks for coming by. let's trade it here. >> he sounds like he is building a bigger base and to me that sounds like it overcomes margins getting squeezed. higher lows, higher highs. i would be a buyer. >> we will be right back. [ female announcer ] it's time for the annual shareholders meeting. ♪

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>> who was selling gm? canada selling 30 million shares. you see the impact. all right. bk won on lulu lemon. guy takes home nothing. so around the horn we go. >> s&p puts. they are cheap here. >> cree seems to have bottomed. and i changed my lights over to

led. >> great momentum. >> taking home a bunch of the juice. >> you stole it. hello. >> guy is going to be regular tomorrow morning. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. just trying to make you a little money. my job is not just to entertain you but to educate you so call me at 1800-743-cnbc. drastic changes to the 30 stocks in the index. three changes that tell a huge